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Hot Topic NBR Focus: GMO
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Editor's Insight: Lagging regions need more migrants, not fewer

Labour and New Zealand First anti-immigrant policies will make the regions worse off. With special feature audio.

Tue, 13 Sep 2016

The plight of the regions is again being touted as a potential election issue.

The latest performance report of the country’s 16 regions also highlights how fortunes can change quickly.

While the ASB Bank’s new scoreboard has some surprising findings, Bay of Plenty and Auckland remain at the top.

Northland is now on its own in third place. This was the region that rejected the government’s candidate in a by-election early last year, supposedly because its economy was going backward.

But as figures at the time of the by-election showed, this was wrong. The problem for the government was controversy around the then MP and the poor selection of a substitute after the resignation.

Meanwhile, Northland's economy has continued humming along in the past 12 months, thanks to strong housing and tourism markets.

In fact, Northland leads the country with a 60% jump in construction activity, house prices running at 11% and retail sales at 9%.

Northland’s population growth is shadowed only by Auckland, Bay of Plenty, Waikato and Canterbury.

None of this is due to the incumbent MP.

Trio of laggards
Based on activity in the latest quarter, to June, Canterbury, West Coast and Taranaki are all vying for bottom ranking.

Canterbury is a bit of an anomaly, as it has the country’s lowest unemployment and is maintaining a high level of activity on the building front.

But the rate of growth has slowed and it was the worst performer after Gisborne in retail sales. These were down 3%.

Taranaki has been on the bottom for some time, thanks to the decline in dairy and oil prices, though dairy’s future is looking more promising.

The biggest improver is Nelson, which jumped five spots to fourth. It’s housing market is booming after a lull and it’s benefitting from horticulture and tourism. But retail sales fell, along with Gisborne, Canterbury and Waikato.

By contrast, Nelson’s neighbour, Tasman, has taken a dive with its housing market being the only one in the country to be lower than last year.

Nelson's other neighbour, Marlborough, is also booming and is now in the top half because of its wine industry, which has had another big jump in its harvest this year.

Though still at the bottom, West Coast climbed a couple of spots to join Taranaki and Canterbury at 14th equal due to a strong growth house prices over the past year (up 45%) and tourism.

Tourism and house prices were also strong in Waikato and Southland (though consumer confidence reamins low),

New policies for the regions
A new book from Massey University, Rebooting the Regions, analyses population growth – or lack of it – and how many parts of the world, outside some large cities, are going backward.

The editor, Professor Paul Spoonley, is a demographer and accepts that the ageing population and fewer work opportunities will act as a handbrake on economic possibilities.

Of course, this is a spur for New Zealand First and Labour to promise policies such as free university study on certain conditions, including being public service jobs in the regions.

But Professor Spoonley points out the lack of tertiary education above polytechnic level in any region will result in the brightest young people moving to where they can get higher education.

“The new demography is that many of these regions are facing structural ageing, so the dominant group in the region is going to be the over-65s,” he says.

This is one of the key points made in the book. Call it the "silver" bullet. With a third of the population being over 65, it means taking the glass half-full appraoch.

This is to keep the oldest generation energetic and contributing their skills rather than writing them off. It also means keeping communities sutainable through adequate health care and having age-friendly policies.

How do New Zealand's policies rate?
Not that well, the professor says.

“We’re way behind the eight ball,” he told the Q+A programme on TV One. He would like to see us taking pointers from other countries with ageing populations.

“In the Netherlands, for example, if you provide aged care, then one of the requirements is you provide a kindergarten as part of that aged care facility so you get the intermixing of generations. We don’t do that.”

He also identifies a fundamental issue with funding policies that can lead to the loss of essential services .

“If you’re in a District Health Board in a region which is seeing a significant increase in the older age group, and you’ve got a population funding model, then you are not going to divert resources to the older groups.

“You begin to then think, ‘Well, what do we provide for younger groups?’ So there’s a reprioritising of your funding. But alongside that you’re seeing tipping points.

“So do you have enough to sustain the local medical practice? And the same happens with schools. There aren’t enough kids there to generate enough for a local school to remain open.”

The immigration solution
Obviously, immigration’s part of the answer. Immigrants now get 30 points rather than an extra 10 for going to places other than Auckland.

Professor Spoonley thinks that’s not enough. He also says regions don’t do enough to attract and settle immigrants.

This, of course, puts him offside with New Zealand First and Labour, who are seeking the votes of those who are opposed to immigration and therefore will make the regions even worse off.

Not all regions are hostile to immigrants, Professor Spoonley says. In Southland, for example, half of the dairy workers are Filipino. In Gore, the schools have a big chunk of Filipino students and, of course, Roman Catholic Church is booming. Other regions, where horticulture depends on temporary workers, don’t get those long-term benefits.

“I think what you need to do is be welcoming, you need to be clear about what jobs exist in regions, and you need to realise that immigrants do actually like their own food.

“They do speak a different language. You’re going to get a very different feel to your region or your community. Make that a positive.”

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Editor's Insight: Lagging regions need more migrants, not fewer
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