Philip McDermott: Provincial growth is Auckland's loss

Auckland's prosperity is critical to New Zealand's prosperity, if only because it houses 33 per cent of the nation's residents and 30 per cent of employees. But, past performance does not mean that Auckland will automatically dominate New Zealand's growth rates in the future.

This may fly in the face of Statistics New Zealand projections discussed in the Herald earlier this month. But a few facts and figures raise interesting questions about the shape and significance of Auckland's future growth.

It is time, in fact, to rethink some of the assumptions about where and how people want to live in New Zealand. It is only because assumptions based on past behaviour are built into pop-ulation projections that they suggest Auckland will maintain an overwhelming attraction to the population.

Even in 2001 there were signs of change, though. According to census figures, Auckland grew by around 90,200 people between 1996 and 2001. Yet, many more than that, 131,000, said they had lived overseas five years earlier. Auckland's growth apparently depended on international migration. Without it, the region would have declined.

This immigration-based growth obscured some interesting undercurrents. The 2001 Census recorded 68,000 people moved out of Auckland to other places in New Zealand between 1996 and 2001. This was more than the 65,600 who moved in, resulting in a loss to the region of 2400 people.

This loss to the rest of New Zealand was a significant turn-around. According to a report from Professor Ian Pool of Waikato University Population Studies Centre, domestic migration added 5160 people to Auckland's population between 1986 and 1991, and 5010 between 1991 and 1996.

This reversal is even more telling when compared with what happened elsewhere between 1996 and 2001. For example, the Bay of Plenty gained 8700 residents from other parts of New Zealand. Tasman, in the north of the South Island, gained 2600, Wellington 2200, Waikato 1500, and Otago 1100. Most interesting for exponents of the northern-drift theory, Canterbury gained 8700 people from the rest of New Zealand.

Turning to the bigger picture, Auckland's natural growth (births less deaths) was 61,000 between 1996 and 2001. If we add international migration to natural growth and deduct the loss to other parts of the country, we end up with possible growth of 190,000. Yet, this is almost 100,000 more than the 90,200 gain Auckland recorded.

This means as many as 100,000 people who lived in Auckland in 1996 had moved overseas by 2001. In short, Auckland's growth now depends on a surplus of international migration arrivals over departures.

There are no guarantees that international migration figures will flow in Auckland's direction in the future. If sustained, the downturn evident since 2003 could lead to a population decline by the end of the decade.

On the internal migration front, Auckland can expect further net losses. Why?

First, Auckland is not immune to the international sea change driving mature families and empty nesters to sunbelt and lifestyle areas. This adds to an established retirement drift to places like Northland, the Bay of Plenty, Taupo, and Tasman.

Second, lower purchasing and living costs support such choices. People can cash up and out of metropolitan areas and buy into a less-pressured lifestyle. Doing this may convert some of their housing assets into cash or other forms of investment.

Even younger households may put lifestyles ahead of job locations when choosing where to live. This becomes more practical as technology supports more flexible business practices.

Third, employment is decentralising as firms move from costly, congested city sites to the metropolitan edge or beyond, to secondary cities and small towns. Growing tourism activity is also supporting provincial labour markets.

Internationally, the dispersal of employees by large organisations is now being touted as a means of risk reduction in the face of terrorism and pandemic jitters. Under these circumstances, New Zealand may even become a favoured destination for investment, although Auckland is unlikely to be top of the list for companies escaping the uncertainties of large cities.

The prospect of these shifts in employment is a revival of much of provincial and small-town New Zealand.

Business demographics statistics collected by Statistics New Zealand indicate that already Auckland's employment growth rate is well below other parts of the country.

New Zealand's employees grew by 16 per cent between 2000 and 2004, Auckland's slightly less at 15 per cent. By contrast, Northland gained 23 per cent, Bay of Plenty 21 per cent and Waikato 19 per cent.

In absolute terms, Auckland led the way. However, with 30 per cent of national employment in 2000, Auckland recorded only 15 per cent of new jobs created between 2000 and 2004 (73,000 in total).

Compare this with the rest of the northern North Island. Northland, Waikato and Bay of Plenty accounted for 14 per cent of national employment in 2000, but gained 21 per cent of the country's new jobs (46,000).

The economic revival outside Auckland means small cities and towns can again offer work and career prospects for people entering the workforce.

They offer a more affordable environment for young households. And, as satellite tertiary education institutions are established in smaller centres, migration to the big city is no longer the only option for people pursuing qualifications.

The movement of younger people to Auckland will slow down or reverse under these circumstances. The big lights will continue to hold an attraction, but will no longer be the only option.

By 2001 the tidal drift of people and jobs to Auckland had slackened. The notion that the region will grow at past rates at the expense of other parts of New Zealand must be revisited.

There is plenty to suggest that the flow is gathering pace in the other direction.

This raises some interesting questions for those agencies that see our planning problems as simply being how to cope with growth in Auckland and boost "the regions" elsewhere.

* Philip McDermott of CityScope Consultants is Adjunct Professor of Urban and Regional Development, Auckland University of Technology.