New Zealanders leaving Auckland

Last month The Treasury published some new research aimed at providing better information on the population changes in each territorial local authority (TLA) between censuses.   At present we only have a census every five years –  and in some quarters there seems to be a push to reduce that frequency – and subnational population estimates between censuses have often been pretty poor, only to be updated and revised when the next census results finally appear.  At present, the published subnational population numbers are anchored to the 2013 Census, adjusted for estimates of the overseas net migration flow and data on  births and deaths.  In New Zealand we don’t have to tell some specific government agency when we move house or city.

Except that, as The Treasury observes, in practice we often do end up telling some government agency (or government-funded agency) or other –  in fact, are coerced to do so –  and the government has collated all that data in a single (anonymised) database.   That opens up enormous possibilities to use that data to, for example, update subnational population estimates in a way likely to be more accurate (albeit not very timely).   You might worry, as I do, about governments getting their hands on all that data combined, by some mix of coercion and seduction (eg have the slightest accident and you get into the ACC system) and worry that it might be used for ill as much as for good.  But, like it or not, the data are there and The Treasury is using them.

This chart from their paper gives you the picture of the data they are using

tsy popn

But my interest is less in the details of how they calculate their estimates, as in some of the bottom line results, and particularly those around estimated internal migration.

There are some interesting snippets.  The results suggests that New Zealanders’ rates of internal migration (one TLA to another) have been pretty stable, but that of immigrants has increased quite a lot.  The author offers no ideas about why that might have been (and I don’t have any to suggest either).

tsy popn 2 There is a fascinating picture of Christchurch following the earthquakes, including the continuing losses in recent years to neighbouring Selwyn and Waimakariri.

tsy popn 3

And then there is Auckland

tsy popn 4

There was a slight move into Auckland from elsewhere in New Zealand (mostly from Christchurch, see previous chart) in 2011, but otherwise the net flow of New Zealanders has been away from Auckland.  In fact, in the final year of the chart, the net outflow of New Zealanders (this is a NZ-born measure) was larger than the natural increase, so that the entire increase in Auckland’s population is (estimated to have been) due to international migration.

Readers with long memories may recall that I touched on the outflow of New Zealanders (as captured in Census data) in an earlier post.

This was the picture from the five years from 2008 to the 2013 Census.
internal migration 08 to 13As I observed then, we didn’t know what had happened since 2013.   Perhaps things had turned around?    But the new Treasury estimates suggest that if anything the outflow – still modest each year – may have accelerated.

We have the data going further back. Here is the extract from the earlier post.

SNZ has compiled this data back as far as the 1986 to 1991 five-yearly period. The last five yearly period in which Auckland experienced a net inflow of people from elsewhere in the country was from 1991 to 1996.

Here is chart which covers the estimated net internal migration to each region for the period 1986 to 2013 (with the two years 2006 to 2008 missing, because they weren’t captured by any of the censuses).

internal migration 86 to 13.png

 

None of this should be very surprising.   After all:

  • Auckland house prices have become impossibly high,
  • Traffic congestion problems, if temporarily relieved now by Waterview, seem continually pressing, and
  • The gap between Auckland incomes and those in the rest of the country, never large, has been narrowing.

But it must be an inconvenient truth for boosters of the Auckland story, including bureaucrats in MBIE, the Secretary to the Treasury, assorted past and present ministers (recall John Key on “quality problems”).  The people who know Auckland best  –  the opportunities for themselves and their families –  are, at the margin, leaving the place.   People in the rest of New Zealand aren’t (net) flocking to the big city.   It simply doesn’t seem to offer them better opportunities than staying where they are (or going to Australia).

The latest issue of the London Review of Books turned up in the mail yesterday.   In one of the reviews –  of a new book by Richard Florida –  I found this

The new urban inequality has two distinct and related aspects. First, superstar cities have moved ahead of the nations they’re found in.  The trend is clear in the US, where cities like New York have become richer relative to the country as a whole. But it is most pronounced in the UK.  In the 1970s and 1980s, London’s GDP per head was around one and a quarter times that of the UK as a whole.  Today it’s one and three-quarters.

It isn’t just London or New York.   I’ve shown previously a chart looking at GDP per capita in EU countries, looking at the ratio over time of that in the biggest city relative to GDP per capita for the country as a whole.  Over this century there has been a clear upward trend.

As for Auckland, in 2000 GDP per head in Auckland was 15 per cent higher than for the country as a whole, but by last year it was only 9 per cent higher.   I’ve shown previously (a couple of years ago) this chart of how small the New Zealand gap is between GDP per capita in the biggest city and that for the country as a whole, by comparison with many other advanced countries.

gdp pc cross EU city margins

There are, perhaps, some good dimensions to the New Zealand story.   We don’t have whole swathes of the country being left behind as the metropolis powers ahead.  On the other hand, the metropolis isn’t powering ahead at all –  just getting more and more people, in a city which is underperforming a country with weak (almost non-existent in recent years) productivity growth.

It is well past time for a rethink, and for our politicians and officials to start focusing on the specifics of the New Zealand experience.   In terms of economic success, Auckland bears not the slightest resemblance to London or New York (or Paris, or perhaps even Bratislava).   And yet the growth strategy (perhaps flattering it to use the term “strategy”) has seemed to rest almost entirely on a wishful belief that if only we tried really hard, and poured more and more people into Auckland, it just might be.  But one of the lessons of economic geography is that location matters.  Ours –  Auckland’s –  is exceeedingly unpropitious.

That LRB review I mentioned earlier notes that trends in recent decades have turned out to be very good for “established global cities in particular”, in ways that few anticipated.  That particular discussion ends thus

The business districts of San Francisco, New York, and London are ludicrously prodigious. The Borough of Westminster produces as much wealth as all of Wales.

I can’t vouch for that final statistic, but it does leave one thinking that it is more likely that Auckland is a Cardiff or (moving north) Glasgow, than that it is a coming London or New York.

15 thoughts on “New Zealanders leaving Auckland

  1. 15:41 Jul 17, 2009
    What Diversity Dividend?
    by Spoonley
    The Royal Commission’s report on Auckland’s governance provided some weighty reading, somewhat reminiscent of the infamous Royal Commission on Social Policy in the late 1980s. But this time round, the action has started.
    The ambitions are reasonably clear : to tidy up the city’s governance and to achieve much better economic outcomes. The Royal Commission offered some answers to the question of who might be the beneficiary’s of either ambition reasonably clear. Notions such as ‘cultural well-being’ and ‘priority populations’ appeared in parts of the report. But there are some puzzling omissions and a failure to connect certain dots.
    …….
    Diversity is nice but does not appear to be critical to the city’s economic success.
    ……
    Fantastic piece. Thanks so much.
    Vancouver’s experience is probably like Canada’s on the whole. Trudeau brought in multiculturalism by federal directive in the 70s (“Although there are two founding peoples there is no founding culture…” and that mirrored Laurier before him…) Then in 1982, multiculturalism was enshrined in the Charter. Then in the mid-80s a Conservative PM enacted the “Multiculturalism Act”.
    Now in Canada’s large cities it’s somewhat amusing to hear people speaking English. Fourth generation Canadians are seen as an amusing relic. Do you eat roasts? Do your parents wear sweaters to dinner and talk about classical music, ha ha ha?
    The reality is that in NZ, the hegemony of Anglo Saxon culture refuses to die.
    http://publicaddress.net/speaker/what-diversity-dividend/

    IDENTITY 10 Oct 2017
    The changing face of New Zealand
    From Nine To Noon, 11:28 am on 10 October 2017

    The year they are predicting Asians will supersede Maori is 2023. So the recent population growth (immigration) is bringing those tipping points forward.

    Ryan: We’ve had four years of record high. And that was not anticipated.
    Are we pretty much now just about the most diverse country on earth?

    Spoonley: Absolutely we are. One of the key elements of those projections is the growth of the Asian populations (and I want to pluralise that). And when you look at the country or a city like Auckland it is much higher than any comparative city. Not Vancouver, Vancouver is higher. But in terms of a city like Sydeny then the proportion of Aucklands population that is predicted to be Asian is quite a bit higher than those type of cities. And by the way, we track across to London and we think, gosh, we are in quite a multicultural place here, but when you look at the total Asian population, the proportion relative to the local population we still beat them.
    https://www.radionz.co.nz/national/programmes/ninetonoon/audio/2018617301/the-changing-face-of-new-zealand

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  2. Wayne Mapp – Auckland just happens?

    One thing is absolutely clear, Auckland will grow to 2.5 million in 30 years. Around the town centers there will be increased density. But in areas where the norm is townhouse and traditional housing there will be huge resistance to multilevel apartments. Mayor Len of course knows this, and the plan will be adjusted to take that sting out. Typically in these exercises you put your maximum position out for consultation to give some space to pull back. Of course some planners may not understand this political nuance, and probably not some councillors (i.e. Anne Hartley, judging by her reported comments at the meeting).
    http://www.kiwiblog.co.nz/2013/05/roughan_on_auckland_rumblings.html/comment-page-1#comment-1147615

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    • How would Auckland just happen if the beneficiaries of that growth also paid for it’s costs. As Winston Churchill said :
      “Roads are made, streets are made, services are improved, electric light turns night
      into day, water is brought from reservoirs a hundred miles off in the mountains —
      and all the while the landlord sits still. Every one of those improvements is effected
      by the labour and cost of other people and the taxpayers. To not one of those
      improvements does the land monopolist, as a land monopolist, contribute, and yet by
      every one of them the value of his land is enhanced. He renders no service to the
      community, he contributes nothing to the general welfare, he contributes nothing to
      the process from which his own enrichment is derived.”
      (Winston Churchill, 1909, quoted by Barker 2003, p. 116).

      For many New Zealanders Auckland may as well be in a foreign country.

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  3. Great article Michael. Any thoughts why from an economic geography viewpoint Brisbane is successful in the sense that kiwis are voting with their feet by moving there and Auckland is not?

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      • I was looking at a couple of brand new build in Brisbane that comes with man made beaches with their man made swimming pools

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      • That is only part of the solution. The other part is the loss of industry that can support our high skilled Kiwis with higher wages. At the moment our major industries are milking cows, plucking fruit, carving meat and cleaning up after tourists mess which does not provide the necessary high skilled jobs to employ our high skilled Kiwis so they leave for greener pastures.

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    • Lower house prices and house to income ratios are no doubt part of the story (lower than Akld and Sydney and Melbourne) but so, relative to Auckland, are much higher market incomes. I take no persuasion to state that a liberalised land market etc in Akld would materially improve the wellbeing of Aucklanders, incl in intergenerational equity terms. I would take a great deal of persuasion to believe that fixing that specific issue would make a material difference to average GDP per capita in Auckland (or even that a lot more NZers would choose to live there).

      Bear in mind that two other resource exports driven OECD economies that have actively pumped up populations – Australia and Canada – are also places where big city GDP per capita is underwhelming relative to that in the country as a whole. That story is particularly stark in Australia: the big gains of the last 15 years have been from increased value then volume of mineral exports, and hardly at all driven from the big cities (even though there are plenty of support functions – eg finance, legal, and head offices – for the minerals industry in the big cities.

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    • So much for the urbanising solution

      “But population growth, which needs to be sustained by immigration, brings problems, too. Public decision-making and public investment struggle to keep up. School enrolments are much higher than they would otherwise be, and many of the new kids don’t speak English. Well-developed cities find it difficult to plug in many thousands of extra people, without disrupting existing communities. There is not much advance transport planning. Indeed, Sydney is still struggling to build the infrastructure it should have provided decades ago for its north-west suburbs
      Property developers have prospered without contributing much to urban design. In many ways, today’s situation is reminiscent of the 1950s and 1960s, when new developments chewed up bushland around Sydney, Melbourne and Brisbane. Things were done in a rush, and it showed. While there were some high points, the architecture of the period was undistinguished. Homes were at least affordable but their design was often uninspired. In those days, people did not like terrace housing and many old neighbourhoods were demolished. The blocks of flats that sprang up in their place might have been comfortable on the inside, but there were few concessions to aesthetics and the landscaping was usually non-existent.
      With over a decade of very high net overseas immigration, we are seeing much the same pattern now, in all the major east coast cities, as well as in Canberra. Houses are built on much smaller blocks, and the houses are bigger than those of 50 years ago. There is not much variety. The same project designs are repeated, over and over. Flats are now called apartments, and the buildings are a lot taller than those built in the 1960s, but I don’t think there are many whose architects would be proud to have their names displayed prominently on the outside.
      There is one important difference from the last big boom. It is much more difficult for young people to get into the housing market now. Most of the proffered solutions will exacerbate the problem. Aid to first-home buyers simply raises prices. Releasing what was once public land for housing reduces opportunities for added recreational space. Watering down planning mechanisms and going easy on building regulations piles up problems for the future. Restricting negative gearing might help a bit, but would probably lead to less supply in rental markets. Decentralisation seems to be permanently off the agenda, except for opportunistic grabs by politicians wanting to shore up support in their electorates.”
      https://www.canberratimes.com.au/public-service/rethinking-immigration-and-its-complex-effects-on-society-20170628-gx0dkf.html

      Any renovator knows: if the basic layout is wrong it is very expensive to fix. You aren’t going to get an ideal solution by infill.

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  4. There is room for an article that defines immigrant.

    My granddaughter is a 100% Melanesian Kiwi with her entire 16 months of life spent here. My friends in their eighties are immigrants – they arrived in the early sixties – but if asked they would say they were Scots with the accent and habits to prove it but one of them by chance was born in London and has a grandfather born in New Zealand. My English mother lived in Scotland for 45 years and was irritated when youthful Scot Nat supporters objected to the ‘English settlers’ as she pointed out she had lived in Scotland twice as long as them.
    The Empire Windrush scandal proves immigrants who arrived and integrated are well accepted in the UK – with the elderly POM more shocked by the way bureaucrats have treated them than younger hipper POMs. The way Australia returns criminals to NZ even if they have lived in Australia since before they could walk is legal but any rational person would say unfair.
    Once I had a pleasant chat with a large PI looking guy; sufficiently long for me to learn he was an ex-Police officer with 7 children. I asked where he was from and he said Samoa (best for me not to guess since I can confuse Samoa, Tonga, Cook Islands, etc) but after more conversation we discovered he thought I was a Kiwi (under 10 years living here) and he was born in Auckland maybe 50 years ago.

    Ever since I read about Hitler’s government using old school records to identify assimilated Jews I have made a point of avoiding ethnicity questions. Do not trust data based on NZ databases not prof Spoonley’s data that almost invariably assumes no inter-marriage.

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