Tuesday, 21 March 2017

The Maxim Institute on dealing with population decline

Last week the Maxim Institute released a new report on regional development in New Zealand. Radio New Zealand reported on it here, but note that they say the report:
predicts populations in many regions will drop or stagnate within three decades.
Actually, that's based on work that Natalie Jackson and I have done, which is available in this working paper (forthcoming in the Journal of Population Ageing, and with an update based on stochastic projections methodology due in the journal Policy Quarterly later this year - I'll talk about that in a later post).

Anyway, the Maxim report (written by Julian Wood) doesn't contribute anything new research-wise, but does do a good job of collating important research on regional development with a particular focus on New Zealand. There are some parts of the report that should be required reading for local council planners, particularly those in rural and peripheral areas where populations are declining. As one example:
When looking at the age composition of population growth this broad-based regional decline is accelerated by the fact that “only 16 TAs will not see all their growth to 2043 at the 65+ years [age group].” In short, in 10 national election cycles (thirty years), the majority of local governments will not only be experiencing population stagnation, but the vast majority will be experiencing far older populations with far fewer people in their prime working age (aged 15-64). This reality means that the vast majority of rural New Zealand shouldn’t be planning for, or counting on population growth as a driver of economic growth.
Rather, as a rural community’s population ages and or declines it will likely come under increasing economic, financial, and social pressure. Fewer people of working age can mean less employment income in a community and less consumer spending and hence less business income. Local government income can also decline as there are fewer people and businesses paying rates.
And this quote from the report pretty much sums it up:
There is a need for a “growth everywhere” reality check.
The reality that population growth is not a given for most of the country has not dawned on many councils (based on many discussions I have had over the years). Many councils still refer to population projections as 'growth projections', which makes no sense whatsoever if your population has been declining for two decades or more!

"But won't Big Project XXXX lead to expanded population growth?" I've heard that one before, and in fact in one of the early population projection projects I was involved in we quantified and accounted for 'big projects', but it turned out later that if we took the projected populations excluding the big project effects we weren't too far off. 'Big projects' are simply business-as-usual for a growing city or district like Hamilton City or Waikato District, but for declining peripheral areas the money would probably be better spent elsewhere. The Maxim report notes:
The overall picture remains, however, that building physical infrastructure alone will be insufficient to economically “restart” a rural economy in long-term population stagnation and decline.
The Maxim report recommends three 're-thinks', which are definitely worth considering:
  • Rethink #1: All regional development goals must be explicitly and clearly stated to enable clarity, transparency, scrutiny and co-ordination. As part of this “regional wellbeing indicators” should be explicitly developed and included in these regional development goals.
  • Rethink #2: Regional development goals need to be ranked and prioritised with tensions, trade-offs, or the subservient relationships between the goals explicitly outlined and prioritised so as to enable evaluation.
  • Rethink #3: New Zealand needs to rethink its sole focus on economic growth, shifting to a framework that also empowers communities to meet both the economic and social needs of their populations in the midst of “no growth or even decline.”
The first two should be obvious for any decision-making, not just in terms of regional development. The third needs policy makers to face up to the reality that population growth is not the destiny of every part of the country. Which is a point I have made before.

Read more:

[HT: Natalie Jackson]

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