Month: January 2016

Still a country New Zealanders leave

Michael Reddell New Zealand economic performance

In one of his weekly columns over the holiday period the Herald’s John Roughan, a touch sentimental perhaps that his grandchildren were just returning home again to Singapore, made the case that the post 1984 economic reforms have made New Zealand “a place worth returning to”,  “a place that can hold its own in the world”, and so on.

It is a nice story.  It is certainly one that I hoped would come true.  It is just a shame that the facts don’t really support it.

What have New Zealanders been doing?  Well, the last time there was any sort of sustained net inflow of New Zealand citizens to New Zealand was when Sir Robert Muldoon governed:  seven consecutive months in 1983.  It probably wasn’t greatly to Muldoon’s credit, since by mid 1983 Australia’s unemployment rate had risen sharply to just over 10 per cent.    There were also two months in early 1991 when there was an inflow of 90 people:  and again Australia’s unemployment rate was rising rapidly.    Even in the last 12 months a net 4800 New Zealand citizens have left.  Sure, plenty of individuals leave and come back, but in net terms the data tell us the flow is outwards.  It is a volatile series, and the outflow at present is less than it has often been, but we’ll need several years more data before there would be any reason to think the pattern of net outflows –  in place since the mid 70s – is ending.  There has been a net outflow of New Zealand citizens of 680000 since the reforms began.

net plt flow of citizens

And even if the outflows were to slow, it isn’t necessarily a mark of our own success.  Australia has long been the natural place for New Zealanders to seek better opportunities for themselves and their families.  For a long time, access to Australia was largely unrestricted –  it was easy to go, pretty easy to adapt, and if things went wrong the social safety net buffers in Australia were there for the immigrants.  New Zealanders can still easily go to Australia, but they now have a much tougher time of it –  for new arrivals, access to the Australian welfare system is available only for those arriving on permanent residence visas (typically not New Zealanders).  And their children can find themselves in a legal limbo.   In boom times, only the most risk averse pay much attention to factors like that  –  and those who choose to migrate aren’t generally the most risk averse –  but tougher times in Australia, and just the passage of time and the reporting of more stories of the difficulties some have faced, is reducing the attractiveness of Australia, even as the income and productivity gaps between the two countries have continued to gradually widen.  It is too early to tell how large any structural change in the willingness of New Zealanders to go to Australia has been –  the cycle dominates –  but if it has happened it is neither a benefit to New Zealanders or a reflection of any success on our part.

Roughan glides between the talk of New Zealanders coming home and celebrating the overall net immigration statistics.  But again, large net inflows of non New Zealanders aren’t a sign of economic success, just a sign of one strand in economic policy.    A relatively rich country never has too much difficulty getting migrants if it wants them –  there are always many countries that are worse off.  Indeed, a violent middle income country like South Africa attracts lots of (mostly illegal) migrants –  most of Africa is even poorer.  This isn’t the place to resume debates about whether New Zealanders will benefit from our immigration policy over the long haul, just that inflows –  however large – are not themselves a sign of our economic success.

I’m one who thought –  and thinks –  that most of the reforms of the 1984 to 1993 period were in the right direction, and generally needed to be done.  But we need to face the fact that even if many of those reforms were beneficial –  and I think they probably were –  New Zealand’s productivity performance has remained pretty woefully bad.  And absent huge new natural resource discoveries, productivity is the basis of sustained prosperity.

Roughan talks of finishing school at the end of the 1960s and having then been pessimistic about New Zealand’s prospects.  And New Zealand did very badly in the fifteen or so year after that.  Between some of the bad choices we made ourselves (Think Big for example), oil shocks, slumping commodity prices and the UK entry into the EEC, it perhaps wasn’t surprising that between 1970 and 1984 we had the lowest growth in real labour productivity (real GDP per hour worked) of any OECD country for which the data are available.  I was one of young (and probably naïve) who looked at that record and thought that there was no real reason why it couldn’t be reversed with a couple of decades of decent economic management.

real gdp phw 70 to 84

But it just hasn’t happened.  Here are the same data (growth in real GDP per hour worked) for the 30 years since 1984.

real gdp phw 84 to 14

We’ve managed to match growth in Spain and Canada –  both countries that in 1984 had higher levels of productivity than we did –  and we’ve done better than Greece, Switzerland, and Italy.   Better than in the earlier period, but thin pickings really, especially when one contemplates how bad things in Italy and Greece have been in recent years.

Our story isn’t all bad, of course.  We reversed a really bad track record of high inflation, and government’s accounts look pretty good by most (but not all) advanced country standards).  The rapid accumulation of overseas debt (as a share of GDP) also came to an end.  Without those improvements, perhaps the productivity picture would have been even worse.

Individuals generally don’t make choices based on macroeconomic data, but on their perceptions of the opportunities for themselves and their families.  But in this area, the flow of people and the macro data seem pretty well aligned.  New Zealanders just keep on leaving –  in smaller numbers right at the moment, but with little sign of any structural reversal of the flow –  and our productivity performance continues to languish. Yes, to pick up Roughan’s words, New Zealand is a “lovely” place and I enjoy the “temperate warmth of our summer”, “the deep blue sky” and the “beaches and bays” as much as anyone, but…..the beaches look pretty good in Uruguay too, one of the few (then) advanced countries to have done even worse than New Zealand over the last 100 years.

OIA: changes in RB practice and in law needed

Michael Reddell OIA

Just before Christmas, I drew attention to the Reserve Bank’s new policy of charging for Official Information Act requests.  At the time, this paragraph appeared on the Bank’s website.

The Reserve Bank has a policy of charging for information provided in response to Official Information requests when the chargeable time taken to provide the information exceeds one hour, and charging for copying when the volume exceeds 20 pages. Our charges are $38 per half hour of time and 20c per page for copying (GST inclusive).

That text has now been removed and they appear to have provided some rather more extensive material outlining the approach they are now planning to take.  This is what is now stated on the website:

The Official Information Act allows the Reserve Bank to charge for preparing information that we send in response to requests. When charging for responses to Official Information requests, the Reserve Bank works within the guidelines published by the Ministry of Justice here – Official Information Act: Charging for Services. Charges are $38 per half hour of staff time after the first hour, and 20 cents per page for printed or copied material provided in response to a request, after the first 20 pages.      The Reserve Bank is resourced to meet disclosure obligations for a reasonable level of Official Information requests and generally will not impose charges for small, simple or infrequent requests. If requests are made for large amounts of information that require substantial collation and research, the Reserve Bank’s first step is to work with the requester to refine the request to a smaller scale or scope that is less likely to involve charges. Where request is still chargeable and likely to be expensive, we will give the requester further opportunity to refine the scope of the request and thereby reduce or eliminate charges.

Basis for charging     The cost of providing free responses to Official Information requests is generally borne by taxpayers. The Reserve Bank believes that requesters should bear some of the costs when requests are made for very large amounts of information, where a response to a request is particularly complex, or where individuals or organisations make very frequent requests.

Guidelines for charging      Charges will be imposed for responses when preparation of the response involves more than one hour of chargeable collation, research and preparation work. If the Reserve Bank decides that information requested can be made available, but that charges are appropriate, we will formally advise the requester of:

  • our decision to release the information,
  • the estimated amount of proposed charges,
  • the basis for proposed charges, and
  • the requester’s right to seek an Ombudsman’s review of the proposed charges.

Remission of charges        The need to pay charges may be modified or waived at the Reserve Bank’s discretion, if:

  • charges might cause financial hardship for the requester; or
  • releasing the information is likely to contribute significantly to public understanding of the Reserve Bank and its work, and release of the information is not primarily for the benefit or interest of the requester; or
  • if the information already in the public domain in a form which the requester could acquire without substantial cost.

As I noted before Christmas, it appears probable that the Reserve Bank’s general stance is legal, since the relevant provisions of the Official Information Act itself are quite short and permissive

Subject to section 24, every department or Minister of the Crown or organisation (including an organisation whose activities are funded in whole or in part by another person) may charge for the supply of official information under this Act.

Any charge fixed shall be reasonable and regard may be had to the cost of the labour and materials involved in making the information available and to any costs incurred pursuant to a request of the applicant to make the information available urgently.

Whether it is appropriate is quite another matter.

I discovered the new policy when the Bank sought hundreds of dollars to provide me copies of some easily accessible, non-contentious, very old minutes of meetings of the Reserve Bank Board. But I’m not now the only one to have been hit by the new policy. Richard Meadows of Fairfax was told he would have to pay a similarly large amount to progress several of his OIA requests, a step that has brought greater coverage to the issue. There were articles on Stuff last week (here and here), and yesterday the Dominion-Post editorialised on the Reserve Bank’s new policy, under the heading “An obstacle in the path of freedom”.

The Bank is, of course, bound by the law. But it also notes that it seeks to work within the charging guidelines approved by the then government in 2002. But it is not clear that it is really doing so.

For example, the Bank lists factors it would take into account in deciding whether to modify or waive any charges, but the list it uses is not the same as the list in the government’s charging guidelines. They state

7.1 The liability to pay any charge may be modified or waived at the discretion of the department or organisation receiving the request. Such decisions should have regard to the circumstances of each request. However, it would be appropriate to consider inter alia:

  • whether payment might cause the applicant hardship;
  • whether remission or reduction of the charge would facilitate good relations with the public or assist the department or organisation in its work; and
  • whether remission or reduction of the charge would be in the public interest because it is likely to contribute significantly to public understanding of, or effective participation in, the operations or activities of the government, and the disclosure of the information is not primarily in the commercial interest of the requester.

To comply with these guidelines the Reserve Bank first has to consider the circumstances of each request.   And it is advised to consider whether “remission or reduction of the charge would facilitate good relations with the public” and whether “a remission or reduction in the charge would be the in public interest because it is likely to contribute significantly to public understanding of, or effective participation in, the operations or activities of the government”. The Bank states that it will consider remission or reduction if the request is “not primarily for the benefit or interest of the requester”, but that is hugely different phraseology than the one in the government’s charging guidelines, which talk about where “the disclosure of the information is not primarily in the commercial interest of the requester” – in other words, the test is whether the requester making money from the information in the request.

Yesterday, I was also informed that my request for material the Reserve Bank held relating to its involvement in the post-TPP Joint Macroeconomic Declaration (that our central bank and Treasury were party to, along with macroeconomic authorities in other TPP countries) would also be subject to a charge of $560.

There is no evidence in the letter from the Reserve Bank that they have considered the circumstances of the specific request. For example, as the Dominion-Post editorial notes, charges of this scale “would be a serious obstacle for any individual” and “if OIA requests routinely cost this much it would also be a problem even for large media outlets”.  But I suppose it would not necessarily cause “hardship”

More pointedly, there is clearly no commercial benefit to me at all (let alone it being a “primary” factor) in making such a request. This blog is a non-commercial operation.

What about the wider public interest? Well, the government has been clear that it wants to encourage scrutiny and discussion of TPP issues now that the agreement has been signed. And yet, one press release apart, the Reserve Bank has published no background information about its involvement in the Joint Macroeconomic Declaration, and the Governor has not answered any questions about it. Against that background, a request of the sort I lodged seemed likely to assist public understanding of a new international commitment made by the Reserve Bank. The fact that the Reserve Bank itself constantly stresses the gains from transparency makes their stance on OIA requests in general, and this one specifically, particularly incongruous.

Perhaps the Bank wants to argue that publication on my blog would not advance the public interest (although I’m not sure how they would apply that reasoning to one of the country’s largest media groups). I have, of course, a smaller readership than the Fairfax publications, but by New Zealand standards it is a pretty significant number of people – including, but not limited to, officials, market analysts, journalists and politicians – with an interest in economic and financial policy and analysis issues in New Zealand. The official charging guidelines note that it is reasonable to ask whether requesters have a means of disseminating the requested material. As they note “in the case of the media, however, it can be reasonably assumed that they do have access to means of public dissemination”. The same might be said for requests from reasonably widely read bloggers – blogs not having been as common in 2002 when the charging guidelines were written.

But in any case, the Reserve Bank has itself created a platform for disseminating material, by adopting the (admirable) policy of releasing the results of many of the OIA requests it receives on its own website.

I suspect the change of Reserve Bank policy was prompted by the various requests I have lodged with the Reserve Bank over the last year or so. I haven’t gone back and checked each of them, but I’m pretty sure that in all cases (a) I have written about them here, thus giving dissemination to what the Bank has released (or refused to release) and (b) that all of them have had a focus on enhancing the understanding and scrutiny of a powerful public agency[1].

The Reserve Bank’s new stance is a serious misjudgement. The issue isn’t whether their stance is legal – it probably is – or whether, as applied to either Fairfax or me, it is in accordance with the government’s charging guidelines – it probably isn’t. The bigger issue is the one I have been highlighting for the last nine months. The Reserve Bank is a very powerful organisation, with a great deal of discretionary policy choice left (formally) in the hands of one unelected person. The Bank exercises far more discretion, in a much wider range of areas, than the designers of the Act – and especially of its governance provisions – ever envisaged. Against that backdrop, the Reserve Bank – and its Board and the Minister, both charged with responsibility for the Governor’s performance – really should be going out of its way to be open and transparent – not just on the things it wants to communicate to us, but in facilitating the sort of scrutiny and challenge that open and democratic societies thrive on. The questions might be awkward at times, and some of the angles oblique, but it is for citizens to define the questions and challenges, not the unelected bureaucrats.

It would tedious to go through once again all the areas in which the Bank fails to practice openness and transparency, but to take just three think of submissions on its regulatory proposals, background papers to the current PTA, and background papers on the substantial programme of work undertaken on possible reforms to the governance model. If the Bank is going to add to its generally obstructive approach – responding as slowly as possible, and releasing absolutely as little as possible while waiting out the Ombudsman – by making access to public information something only for those with deep pockets, it will simply further undermine any legitimacy or respect that it has. I would urge the Governor (and his committee) to rethink, and would encourage the Board, the Minister, and members of the Finance and Expenditure Committee to pick up the issue with the Governor. I welcome the fact that James Shaw, co-leader of the Green Party has already gone public on the issue.

More generally, as I have noted before, the Bank would be well-advised to consider adopting a much more pro-active approach to the release of background papers (akin to the pro-active approach taken by the Minister of Finance and the Treasury following each Budget).   For example, the Bank might consider:

  • releasing all submissions on regulatory proposals on the website on the day submissions close,
  • releasing background papers to the Funding Agreement the day the Funding Agreement is released,
  • releasing background papers on any new PTA at the time of the signing of that PTA
  • releasing proper minutes of the OCR-advisory Monetary Policy Committee, and of the monetary policy meetings of the Governing Committee, say, six weeks after the relevant OCR release
  • releasing background papers to each Monetary Policy Statement immediately after the release of the subsequent Monetary Policy Statement

None of these would be extraordinary by the standards of other government agencies or international central banking.

There would, no doubt, still be matters on which people would lodge Official Information Act requests with the Reserve Bank, but the more open the Bank is upfront the less people will feel the need to lodge ad hoc requests.

More generally, this issue highlights the need for a more comprehensive reviews of the Official Information Act, including the role of the Ombudsman’s office and the charging regime. It may well be the Reserve Bank is isolated in its new stance – the No Right Turn blog is seeking the information on that. But as the Dominion-Post editorial puts it, the “default position should be to give the information free. Only in the most exceptional cases should this rule be breached”.

A reader has suggested that perhaps any proposal to charge should require the explicit advance consent of the Ombudsman’s office. That sounds sensible, provided the Ombudsman is properly resourced, but would require a change to the legislation. Legislation might provide that charges could be levied only for exceedingly complex requests (perhaps those taking more than 100 hours – and with decent document management systems how many should that be?) or where it is evident, on the balance of probabilities, that the primary benefit in releasing the information would be for the commercial interests of the requesters (although general release on a public website would presumably deal with what might otherwise be uncharged gifts to commercial operators). Perhaps there needs to be a separate provision for “vexatious requesters”, akin to vexatious litigants in the courts – but again that would be a matter for the Ombudsman to judge, and “asking awkward questions of powerful agencies” would not qualify of itself as vexatious.

We have sought to avoid a “dollar democracy”. The rich and powerful have no more voting rights than you or I. The same really should apply to the access to public information that enables us to evaluate and hold to account politicians and other officeholders (as it largely has in the way the OIA has been administered  –  for all its problems – by most agencies). Whether or not the Reserve Bank backtracks, it is time for Parliament to revisit the OIA and better fit it for an age when openness and transparency are seen as increasingly important. Part of that will be about a stronger culture (and obligation) to pro-actively disclose, part about better-resourcing the Office of the Ombudsman, and part is about ensuring that access to public information is not determined by the size of one’s bank account.

As I was just about to publish this I noticed an op-ed from the Reserve Bank’s Deputy Governor Geoff Bascand, defending the Reserve Bank’s stance in response to yesterday’s editorial.  Readers can evaluate it for themselves, but I noticed this section

Since the policy was introduced we’ve responded to seven OIA requests and sought charges for two of them because most could be addressed without collating large amounts of information.

The particular charge that sparked recent commentary arose because providing the information requested would take an estimated 8½ hours of chargeable time (along with additional non-chargeable time).

As the Bank has sought charges for two of my OIA requests since the policy was changed, and Richard Meadows noted in the comments on my earlier piece that he was charged for three, this account seems not quite accurate.  And I’m still waiting for a response to my September request for the submissions made to the Bank on its regulatory stocktake.

 

[1] As it happens, the Board papers I requested last year probably fitted those categories least (they were about (a) some background work on the origins of the Reserve Bank Act and the Board’s role, and (b) the interests of hundreds of present and former members of the Reserve Bank’s superannuation fund (I’m a trustee of the scheme and some difficult issues have arisen from that era)).

Is inflation going to settle back at 2 per cent?

Michael Reddell inflation

Financial markets don’t seem to think so.

There is a variety of inflation expectations measures.  None of them is ideal (and few are directly comparable across countries), but together they have been providing a reasonably consistent picture of weak, or weakening, expectations of future inflation in New Zealand.  No one knows quite to what extent people use expectations of future inflation in their planning and economic behavior, let alone whether the expectations they actually use (mostly probably no more than implicit) are similar to what they tell those conducting the surveys.    If anything, many  of the survey measures seem to have had a persistent upward bias over the years –  but whether that has influenced behavior is hard to tell.

When inflation expectations start undershooting the inflation target midpoint, it isn’t necessarily a problem in the short term.  After all, it is generally better if firms and households expect what is actually happening than that they are persistently surprised.  But if expectations are slow to adjust –  as they tend to have been – and if expectations, in some form or another, play an important role in influencing the medium-term trend in inflation (reflecting the norms firms and households have in mind for wage and price inflation when they go into the market), then a sustained weakening in inflation expectations can become quite problematic.  After all, the Reserve Bank has been given a goal of maintaining core inflation around 2 per cent.  And if people no longer really expect that future inflation will be near 2 per cent it can become quite hard to get inflation back up again.  People don’t have to think 2 per cent (or above) inflation is impossible, just that the best guess might now be to act on the assumption that something lower will probably be delivered.  After the best part of two decades in which core inflation persistently overshot the midpoint of the inflation target, that would represent a huge change in mindset.  Not all of it would be unwelcome –  as the Bank has noted, it would be good if firms and households became convinced that inflation average 2 per cent rather than, say, 2.5 per cent.  But good things can be carried too far and it increasingly looks as though that has happened.

Survey measures of inflation expectations are useful, but putting a number in a survey involves no risk for respondents and so no incentive to be particularly accurate.  So economists have tended to hanker after market-based measures, where money is directly at stake.  In a world of incomplete information and incomplete contracts, the best we have available in New Zealand is the difference between the yields on New Zealand government conventional bonds and inflation indexed bonds.  It is not a perfect measure by any means, but if there is a reasonable amount of both indexed and conventional bonds on issue, and at least a moderate degree of liquidity in each market, then any persistent changes in investors’ expectations of inflation should, over time, be reflected in changes in the spread between the yields on the inflation-indexed and conventional bonds.    And whereas most survey measure of inflation expectations are for periods one or two years ahead, implied inflation expectations derived from the bond market can provide information on the next 10 years (or more) –  something about the overall expected inflation climate, abstracting from all the noise of regulatory and relative price changes.

The New Zealand government now has 20 year indexed and conventional bonds on issue in reasonable volumes, but unfortunately I can’t find any time series data on the conventional yields ( eg the Reserve Bank is only providing data on the yield on the 20 year indexed bond not the conventional one).   But for these purposes the 10 year bonds should be fine.  And here is the chart of the gap between indexed and nominal yields since the start of 2014, using the data on the Reserve Bank’s website.

iib expecs to jan 16

A common problem with these sorts of comparisons in New Zealand has been that there were very few indexed bond maturities on issue and rather more conventional bond maturities, so that one wasn’t always comparing the same maturity dates.  But these days the government is issuing conventional and indexed bonds with the same maturity dates.  At least since the middle of 2014, the chart will be showing the gap between indexed and conventional bonds each maturing on 20 September 2025.  [UPDATE: A reader drew my attention to the fact that I had misread the DMO’s bonds on issue page and there are not yet exactly matched maturities. It does not affect the gist of the story, although as ever it is indicative only.]

It is not a pretty picture.  Up until perhaps September 2014, there wasn’t anything obvious to worry about.  Implied expectations for the 10 years ahead were very close to 2 per cent.  In the first half of 2014 much of the market appeared to buy the Reserve Bank’s story that a robust recovery meant that even with a progressively higher OCR inflation was going to settle relatively quickly around 2 per cent.

But since then, the trend decline in implicit market expectations has been striking.  As always, there are ups and downs –  individual pieces of data, or changes in market positioning, push prices this way and that.  But whereas investors 18 months ago were happy to trade on the assumption that the Reserve Bank would deliver inflation averaging around 2 per cent, that has not now been so for some time.  As of yesterday, the implicit expectation (average inflation over the next 10 years) was only 1.17 per cent –  not just nowhere near the target midpoint, but close to the very bottom of the target range.  And recall that these are expectations for the next 10 years –  not just the immediate period of falling oil prices, or the last 20 months of Graeme Wheeler’s term, or any of other stuff that throws around the headline CPI – which is what matters for indexed bonds –  in the short-term.  It increasingly looks as though markets (potential buyers and sellers of these longer-term instruments) are pricing a reasonable prospect of at least a year or two of deflation over the next 10 years.  It is certainly a very long way from a confident expectation that, on average over time, the Reserve Bank will do its job.

I wonder what the Reserve Bank’s Board makes of such developments.

A slightly whimsical note to start the year

Michael Reddell Uncategorized

I spent the last couple of weeks in one of my favourite places in New Zealand –  Whakatane/Ohope.   The beaches are great and the surf is safe, and it is pretty warm even when (as it did too often) it rains.  The local paper – the Beacon – runs a bleakly fascinating crime column of the sort all papers once did –  not just the bare details of names and ages, but accounts of episodes of mundane violence and repeated lack of self-control that come before the District Court each week. They include reports of judge’s comments –  a judge who has been around for a long time but still hears explanations or excuses that flabbergast him.  For an insight into what is, fortunately, like another world it is hard to beat.

One afternoon last week, we dropped in to the local museum, which is rather well done on a small scale.  Among the display panels was one that took me by surprise.  I didn’t jot down the exact words, but it was along the lines of “until the 1950s, Whakatane’s port handled more cargo than Tauranga did”.   These days, picturesque Whakatane handles sports fishing and sightseeing trips to Whale and White islands and not much more, but I’m old enough to remember a few coastal ships in Whakatane in the late 60s and early 70s  And I knew that Tauranga had been a late developer  (in the 1951 census Tauranga and Mount Mauganui combined had fewer than 11000 people). But I still made a note to check out this claim when I got home.

And sure enough, here is shipping data for 1949, from the 1950 New Zealand Official Yearbook.

total trade 1949

And sure enough, Whakatane then still had more shipping trade than Tauranga.  But I was also struck by how high Wellington stood, and by the prominence of Greymouth and Westport.  Bear in mind that in those days, coastal shipping was almost as important (even by volume transported) as overseas trade.  That explains Greymouth and Westport, in an economy heavily dependent on coal.  I wondered if the Wellington story was just about inter-island coastal shipping, but it isn’t.  Here are the overseas shipping volumes by port (sum of export and imports, in tons).

overseas tonnage 1949

Wellington was far and away the second largest port for overseas trade, with volumes almost two-thirds of those of Auckland.

And here, by contrast, is the value of merchandise trade by port for 2014.

total overseas trade 2014

Auckland remains the port handling the largest share of overseas trade, but now Tauranga is second (from 10th 65 years previously) while Wellington’s sea port did not much more overseas trade than New Plymouth. Wellington airport’s overseas freight trade narrowly edges out what SNZ reports as Parcel Post.

No doubt there is a variety of other factors going on.  Even as a coastal port, Whakatane with a shallow and difficult river bar  (and nearby Opotiki) couldn’t survive the advent of bigger ships and the removal of regulatory limits of road transport.  For Tauranga, the establishment of the Tasman mill at Kawerau, and the associated railway line to  the Mount, in the mid 1950s gave a significant boost to its trade.  And from the 1970s containerization focused foreign shipping trade in fewer and fewer ports.  But no doubt population changes matter as well.  The Tauranga urban area last year had a population of around 130000, and the combination of Auckland, Hamilton and Tauranga urban areas which had accounted for only around 20 per cent of the total population in 1951, were together almost 40 per cent of New Zealand’s total population last year.

As for Wellington, of course services exports are not in these data.  Then again, as a share of GDP services exports are barely higher than they were 20 years ago.