Right now there are very real and achievable solutions to the current hollowing out of our work force and the flow on effects this is having on the whole country, especially our regions.
Labour knows that for New Zealand to prosper, and for us all to have a society where we all have a stake in the future, we need change. Change in the way we manage the economy to ensure NZ prospers, overcomes our external deficit and stays in control of our own destiny.
This means paying attention to our main centres AND the provinces. Both have a role to play in re-establishing New Zealand as the place where our young want to stay, play, work and live.
New Zealand cannot thrive on the Auckland – Hamilton – Tauranga hub, important though they are to New Zealand’s economy. Similarly, Auckland – Hamilton – Tauranga will be held back if other regions do not succeed.
In other words, New Zealand needs balance.
Prosperity requires economic growth and opportunities in our regions as well as our main centres.
The current loss of productive New Zealanders is serious enough for demographers like Paul Spoonley from Massey University to warn that it is accentuating our aging population:
JESSICA MUTCH: Just finally, let’s touch on this ageing population that you talked about earlier. In 20 years’ time, 1.2 million people will be over the age of 65. What does that mean for New Zealand going forward?
PAUL SPOONLEY: Well, firstly, it’s a doubling. So we’re at 600,000, so we’re seeing the over-65 double. I think the second thing which is really concerning is what’s called the dependency ratio, which is the ratio between those who are in the workforce and those who are dependent on the state in some way. And we’re seeing that decline. There’s a big bite out of the younger New Zealand age groups because they’re going. I mean, 150,000 New Zealanders have left this country since the start of the economic recession, and that’s a huge concern. So we need people to stay here, and we need people to be working here to support that dependency ratio.
Q & A 22 July 2012
Shamubeel Eaqub, the principal economist at the NZ Institute of Economic Research, has said the country’s shrinking population under the age of 40 and the outflow of young people will have a bigger impact on the regions that are plainly now struggling to attract and retain talented labour.
On 30 May he was reported in the NZ Herald as saying “that slowing growth in young people under 40 is very troubling …The impact is disproportionate across the regions – rural areas are losing more younger people than towns….That will make it more difficult for rural areas to develop and retain a highly skilled and innovative labour market – all the bits and pieces that provide excitement and buzz….
Since then Statistics New Zealand has produced its breakdown of the 158,000 New Zealanders who left for Australia in the last four years.
Forty per cent of those who have gone to Australia are between 18 and 30 years of age – 62,000 young people in their prime giving up on New Zealand.
They are disproportionately from the regions. They are leaving because of a lack of opportunity and hope for their future here in New Zealand. The aging of our population in our regional towns is made worse.
As David Shearer outlined in his speech today, the remedies proposed by Labour to build the breadth of our productive exports will work well in the regions.
Our pro-growth savings policy will increased capital available for investment. A Univeral Kiwisaver will grow our capital base. Australia’s share market is three times the value of ours on a per capita basis. A major driver of this is Australia’s better work place savings.
Our pro-growth tax reform is fundamental to growing our productive export economy. Labour’s capital gains tax is both fair, and achieves this aim. Tax biases currently encourage investment in our non-productive speculative economy at the expense of our productive export sector. Removing that bias is seen by the IMF, the OECD, the Treasury, the Reserve bank and Labour as fundamentally important. National is in denial.
Similarly, our research and development tax credit will help drive investment into the productive parts of our economy.
Our willingness to address the out-dated orthodoxy around monetary policy and the exchange rate is another fundamental change that will help the regions.
The regions are rich in resources. Some, like Opotiki, are short of infrastructure. Others have infrastructure that used to, and can again, support more jobs. Those jobs in processing, manufacturing and the high value service jobs they sustain are often (not always) driven off the resource base that is in the regions. They in turn drive help innovation in other sectors.
National’s unwillingness to pull these levers – which only a government can – is hurting the regions as well as our cities.
Labour can and will make the hard decisions required to bring NZ back to prosperity.