Once-thriving communities in New Zealand's heartland face a vicious circle of depopulation and economic hardship, as soaring rates and insufficient services force more people to cities in search of opportunity.

Every hour, at least seven cars pass by Ame Khan's shop front window or, occasionally, someone comes in to order his specialty, "the Bro Burger".

This is Benneydale, a once-thriving community 35km southeast of Te Kuiti, where you can buy a house for less than $50,000 - but no one seems to be lining up to get them.

It's hard to believe but Mr Khan says things were quieter when he moved from Auckland to the town seven years ago to run the Benneydale Foodmarket.

"You used to wait an hour and you'd be lucky to see one car or truck drive past," he said. "Nowadays we get about seven or eight."


But figures from Statistics New Zealand show things are likely to get even quieter in Benneydale, part of the Waitomo District which, like 14 other territorial authorities, is likely to see a big decline in population over the next 20 years.

The drop in population at Waitomo, like its neighbours Ruapehu, Otorohanga and South Waikato has already started and by 2031 up to 23 per cent of the region's residents could have left for good.

Benneydale once had a butchery, a bakery and even a picture theatre but all are now empty shells.

There were jobs in the town's coal mine until the early 90s and earlier at nearby Pureora in forestry, when native timber was milled in the area.

But apart from the local meat works, a transport company and a smattering of farms there's not much going on - and even fewer people around.

Stephen Dunster, who moved from Taumarunui five months ago to work on a local dairy farm, summed up how he feels about his new home.

"It's dead as."

"If you're not into rugby, getting on the piss at the pub or hunting there's pretty much bugger all you can do here."

Waitomo Mayor Brian Hanna did not dispute the Statistics figures, saying the urban shift was part of a worldwide trend that councils like his were battling.

He said the district was likely to see a "grey tsunami" over the next 20 years and the local labour market would be affected by the loss of young people seeking opportunities in the cities.

Waitomo has been hit hard by agricultural advances since the 1990s which resulted in less labour-intensive farms and workers from outside of the district who travelled to meat works and lime mining industries in the region.

This has led to a shortage of ratepayers to pay the costs of maintaining local infrastructure, something he thinks the Government can help out with.

"You have a massive city like Auckland dominating New Zealand and yet the rural powerhouse needs help in funding and you have to keep lifting rates, which makes things worse."

Brian Isaac, who owns Benneydale's petrol station where a sign says "no credit on fuel, don't ask" and a litre of 91 goes for $2.32, says it's still a good place to live.

He said the population was once around 2000 but figures it's around 500 these days.

Mr Isaac said tourism could inject life back into the town, with the new Te Ara cycle track at nearby Pureora likely to bring in a lot of visitors.

Jacki Clark, principal at the Benneydale Area School, which has 14 students - all catered for in one classroom - also loves the small community, which has a rugby team and a fire service. But she doubts there will be any growth to keep them there in the coming years.

"Unless there are farm jobs for these kids, most are going to leave because there really is nothing here."

Jillian Harding has run Benneydale's pub for more than a decade and a number of years after her father took a car for a test drive from Te Kuiti, had a beer at the pub and decided to buy it.

She said houses in the area were cheap; $50,000 could probably get you a decent place with a section but rates were exorbitant, with many locals paying more than $3000.

The pub, which advertises Rheineck for sale on its neon-lit sign, is on the market. Ms Harding said towns like Benneydale were often forgotten.

"Those two streetlights, a rubbish bin outside the hall and the public toilets is about all we have got from the council in the last couple of years," she said.

Waikato University professor of population economics Jacques Poot said a market-driven user-pays system could lead to further rural decline because of economies of scale in the provision of many rural services were higher in isolated areas.

"This encourages net outward migration if the rural residents are expected to fully cover the cost of provision of services themselves," he said.

Professor Poot said people would be reluctant to move to remote rural locations unless the infrastructure was good and health and education services were accessible.

"Even older people will eventually leave rural areas if they can't access adequate health services there or find that there is not enough to do in retirement," he said.

Residents doubtful of exodus even as mill declares job cuts

If the statisticians are right, Kawerau could lose more than 40 per cent of its population over the next 20 years.

The town's population peaked at about 8900 in the early 1980s, less than 30 years after it sprung up in paddocks around the Tasman Pulp and Paper mill.

In prosperous times many enjoyed healthy pay packets, sports clubs and a variety of different cultures thanks mainly to migrants from Europe, Australia and the United States who came to build and run the mill in the 1950s.

But a number of lay-offs over the years has seen the once 2000-plus strong labour force at the mill dwindle to a few hundred employees.

Norske Skog recently told dozens more that their jobs were being made redundant because of a decline in demand for newsprint.

Kawerau, which has been in the headlines for its disproportionate numbers of beneficiaries, youth suicides and school closures, now has a population of about 6700.

But Statistics New Zealand predicts that by 2031, just 3800 people could live there, making the town among the nation's biggest losers of people.

The decline could see up to 43 per cent of Kawerau's population leave by 2031 - or an annual loss of about 2 per cent over the next 20 years.

The town centre was once bustling with a number of shops selling a range of goods from clothing to CDs.

"Nowadays you'll have more luck buying a beer here than a pair of socks," says Ana, 37, a mother of three.

"We used to have things like car yards, the pubs were always full and people were spending money ... it was certainly different but to say the town will lose nearly half of its population is a load of crap.

"There are opportunities here and we do get a bit sick and tired of media coming here to beat up on our town."

Helen Tuhoro, principal at Tarawera High School, which opens in February, said the new school had attracted 33 new staff and of those, 20 were from outside Kawerau.

She was doubtful about an exodus: "In the immediate future I certainly don't see that happening because the numbers are here in the town."

Mrs Tuhoro said there were also high numbers of children on waiting lists for local Kohanga Reo and preschools.

"Assuming those children and their families don't leave town then there is certainly another generation coming through."

Kawerau Mayor Malcolm Campbell said the predictions were damaging and believed it was too difficult to gauge future populations with any certainty, particularly after the last census was canned because of the Christchurch earthquake.

Mr Campbell was more concerned about the effect of PSA on the kiwifruit industry and issues surrounding the Tarawera River.

"I've got a son in Onehunga who's trying to find a million bucks to buy a house in," said Mr Campbell.

"For a quarter of that I could get an enormous home in Kawerau with a big section and the best drinking water in the country. It's a bloody good place to live."

He said Kawerau had established infrastructure and a direct rail link to Tauranga that made it attractive to industry. The town also had major opportunities in geothermal power and clean carbon technology that could see more jobs created, he said.

Loss of rail service, freezing works, takes its toll on Taumarunui

Graham Looby remembers when Taumarunui locals' pockets were fat with pay cheques and it was hard to walk anywhere because the pavements were crowded with people wanting to spend their cash.

He sells items such as old golf clubs and toasted sandwich makers from his secondhand shop that in its heyday had a weekly turnover of more than $14,000 - but that was in the early 1990s.

These days, he would be lucky to clear the same amount in six months.

"The last couple of years it's been bloody tough and the last 12 months it's been worse than tough - it's been losing money," said Mr Looby, who pays monthly rent of $1000.

Taumarunui, population about 4700 is the biggest town in the Ruapehu region but Statistics New Zealand projections show that by 2031 more than a third of its residents will have packed their bags and moved out - something which didn't surprise Mr Looby.

"We lost our freezing works and they downsized our hospital so it's just a joke. There's something like 9.3 beds there."

"I feel they all want us to be in Auckland or Wellington but the small, rural towns are still the lifeblood of New Zealand."

Raewyn West, who owns TM Peters Menswear, said the loss of the Overlander rail service had also been a kick in the teeth.

Taumarunui was among 12 stops culled by KiwiRail earlier this year because of a lack of patronage.

"There are so many businesses that won't see any more business because of that - all to save a few minutes of travel," said Mrs West.

She said it was hard to attract skilled staff to Taumarunui mainly because there were few jobs but said investment in a primary industry, possibly possum fur manufacture could be a way forward.

Taumarunui once had a nurses home which provided training for nurses and a hip specialist that did operations for the Waikato District Health Board - but both are gone.

"What we had used to work well - now we pay $120 an hour for someone from Auckland to come here for two or three days," she said.

A local real estate agent, who asked not to be named, says a quarter-acre section with a three-bedroom home in Taumarunui costs about $150,000. The town is equi-distant to Auckland and Wellington and is an easy drive of about 40 minutes to skifields at Mt Ruapehu.

He said the town had become a "servicing town for farms", many of which had amalgamated into massive operations and employed fewer people. "You really do wonder what some of those bloody politicians think of us in small places, you wonder if they even care about us," he said.

About 30km north of Taumarunui is the tiny township of Ongarue where Peggy Carmichael, the sole-charge teacher at Ongarue School, has a roll of 18 children.

Ongarue once had shops, a railway station and a school roll of more than 100. It also boasted one of the largest native timber sawmills in the country.

These days pine plantations are scattered across lands that used to be dairy farms.

"For every pine plantation there was a farm supporting a couple of families but they're all gone," said Ms Carmichael.

She said locals tried to shop at Taumarunui to support businesses but found they can no longer get everything they need.

Her guess is the population will continue to fall but she remains hopeful a soon-to-be-completed cycleway could bring visitors to the area.

Ruapehu District Council mayor Sue Morris said Statistics New Zealand estimates only took into account the usual resident population for the district which only counts those people who claim Ruapehu as their usual place of residence.

"In Ruapehu's case, around 45 per cent of all properties (and growing) are owned by people who live outside Ruapehu. Ruapehu's wider population who own property here and visit frequently is much higher."