Aucklandia – our future?
Developing New Zealand’s regions does not seem to be high on our political agenda but a systems design analysis suggests it’s both important and urgent.
New Zealand is dominated by Auckland to a considerable degree. Current policy settings will see that dominance accelerate. There is a compelling case for Auckland growth. Creating a vibrant, internationally connected city that drives prosperity through the flow of people, capital and ideas is rational. But the current rate of growth comes at a high price – a price paid by Aucklanders and non Aucklanders alike.
Auckland contains a third of the New Zealand population and generates more than a third of total GDP. By 2043 NZ is predicted to grow by 1.1 million people. 60% of those (nearly 700,000) will live in Auckland, edging Auckland’s population beyond 2 million. Then Auckland will have nearly 40% of the population. 54% of all New Zealanders will live in Auckland, Waikato or Bay of Plenty.
There is momentum behind Auckland’s growth – a spiralling chain effect of – people following jobs following people – which is perhaps unstoppable. Auckland’s gain is not necessarily the rest of New Zealand’s loss. But if we allow the provincial regions and the secondary cities to decline New Zealand as a whole will suffer. As economist Shamubeel Eaqub puts it “the regional economies are of course complimentary economies that fit together to make the national economy. Supply chains are often stretched across many regions. The regions are strongly interconnected through flows of trade, capital and people.”
If our rural heartland is drained of working age people and flooded with the old and the very young, as the trends predict, our primary industries will struggle for workforce talent. Innovation relies on talent as much as New Zealand relies on primary produce. Impeding that does not seem wise!
There are many policy levers which could be applied, which are not. I think the common view is that policies favouring say Northland and Gisborne are interventions that contravene market rationality, or ones that would be unpopular in the metropolis. Sometimes the motivation for such policies is often to improve standards of living in the most deprived regions – to make things fairer for all citizens. Viewed simplistically such redistribution can be seen as a cost to, and therefore unpopular in, the metropolis.
The momentum and the electoral perils probably explain the lack of political priority for regional development, but looking at the situation through design eyes suggests action is urgently required and in the best interests of all New Zealanders. We do not have a metropolis and regions which are independent and in competition. We have an integrated system. Allowing provincial regions to decline to the detriment of their communities and economies costs the country as a whole. Allowing Auckland growth to accelerate costs the country as a whole. Auckland house price inflation, Auckland infrastructure build, provincial communities impeded from reaching their potential cost us all dearly.
At a recent policy design workshop for Treasury, led by DNA, we framed the challenge – 'How might we improve the economy’s geographical balance to provide better outcomes for all New Zealanders?'
Seeing it as a complex system design challenge opens the way for innovative solutions. I’ll explore some of these themes, issues and opportunities in a follow up post.
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