This post is based on an opinion piece I wrote a few weeks back for my employers at RCG – thanks to them for letting me put it up here as well!
TV3’s The Vote program last month featured a debate on the topic, “Is Auckland sucking the life out of NZ?”. I missed most of the episode, unfortunately, but I did catch the results… essentially, most of the people who voted on the TV3 website, Facebook or Twitter agreed that Auckland was sucking the life out of NZ. The studio audience (in Auckland!) disagreed.
OK, so the voters might not have been a representative sample, but this is certainly a charged issue, especially for people outside of Auckland who feel that the city is getting more than its fair share.
At the moment, Auckland is home to more than 1.5 million people – 34% of New Zealand’s population. It’s growing much faster than the rest of the country, and in fact around 60% of New Zealand’s population growth in the next 20 years is likely to be in Auckland. Those are the facts, but they can be interpreted in a number of ways! As for my own interpretation, read on:
Where’s this rapid growth coming from?
Two-thirds of Auckland’s growth comes from “natural increase” – births minus deaths. Aucklanders giving birth to Aucklanders. The city has a young population, driving this part of the growth. The other third comes from migration, and this is probably the part that other Kiwis get up in arms about. Are we hogging international immigrants? Are Kiwis from heartland NZ upping sticks and moving to Auckland, leaving ghost towns behind?
Well, people move to Auckland from other parts of New Zealand, there’s no doubt about that. But of course, the same thing also happens in the opposite direction. In fact, census results show that in the 1996-2001 and 2001-2006 periods, more people moved out of Auckland, to other parts of NZ, than the reverse. We’ve had a decade of negative migration, in domestic (or “internal”, i.e. within NZ) terms. It will be interesting to see if this trend continues when the 2013 census results come out. The “northward drift” of population, which certainly has been a factor in the past, doesn’t seem to be happening any more.
Then there’s international migration. Over the last 20 years, Auckland has consistently attracted more international migrants than it has lost people to overseas. And this is where our migration is coming from, for the most part. It could be argued that, if not for Auckland, international immigrants would otherwise settle in other parts of NZ. But maybe some of them wouldn’t come at all. And if Auckland wasn’t here, would we be losing more people to Australia than we are already? It seems likely.
Money
The other side of the story is money. Does Auckland pay its fair share? Again, the facts seem to suggest that it does. Aucklanders pay a larger share of national infrastructure than other parts of the country – at least for state highways, health and telecommunications, and quite possibly for other sectors too. Auckland is receiving government funding for high-profile projects, like the City Rail Link and Roads of National (ahem) Significance, but this is simply in recognition of the fact that so much growth is expected to occur here.
Auckland also receives a major share of “foreign direct investment” – overseas people and companies investing in NZ businesses, properties and so on. This is fortunate, perhaps, because the city doesn’t contribute as much when it comes to exports, and New Zealand has a persistent current account deficit (four decades and counting). Auckland will hopefully be able to boost its exports in the future, including some of the technology and service industries which will benefit from the city’s scale.
Overall, I’m strongly in the “Auckland is not sucking the life out of NZ” camp. There are some valid questions to ask, though, such as: what could be done to stimulate growth and activity south of the Bombay Hills, without it simply coming at Auckland’s expense?
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John you missed this piece from the Deputy Mayor on the exact same question as well (amongst some other things) http://www.95bfm.com/default,212359.sm
And no Auckland does not suck the life out of NZ – Parliament does.
Exports are a shortcoming for Auckland compared to the rest of New Zealand’s regions. It would be good to see plans being made at local and national government levels to encourage existing and new businesses exporting from here. An improvement would also go a long way to combat the image that the economy here is all about people selling houses to each other.
Auckland is positioned well to be a software export hub, being the landing point of all our international cables and also home to the largest portion of NZ’s export software development. However, for that to happen there needs to be at least as much attention paid to tech exports as is paid to the primary sector. The Fonterra milk shambles should have been a huge red flag to government about the dangers of our economy being utterly reliant on reputation-reliant primary exports. It won’t be, of course, but it should have been the firmest possible message that we are hugely exposed to the downside risk from damage to the reputation of our primary exports and need to seriously tackle economic diversification.
For as long as there is an explicit bias at central government level towards making life easier for primary producers, Auckland cannot hope to contribute heavily to the nation’s exports because we just don’t have the space to do large volumes of primary produce. We also don’t have any tax incentives to encourage manufacturing export, never mind tech export, which means Auckland is also locked out of secondary product export to any meaningful extent.
Good point. I went to the Hi-tech awards last year and the very good point was made that the It sector in NZ produced substantially more than the wine sector, yet it was wine that got a lot of press.
However, a few more young people studying IT and programming and less doing things like law (I say that as a lawyer – too many law graduates in this country) and adventure tourism.
Is there any evidence for this? I mean most people seem to think the only thing NZ exports are primary products. Are people looking at a map and saying they don’t have much farmland and therefore aren’t exporting much. If that is the case then surely Wellington and Christchurch will be in the same boat. In other words it’s not a problem exclusive to Auckland. Yet I don’t see the same accusations of general uselessness being leveled at those cities.
It’s by region, not by city, and Canterbury exports quite a lot. Wellington is exempt from scrutiny because it’s the capital and is thus not expected to generate export income (national capitals are frequently good only for tertiary income generation).
My view on this is to test the null hypothesis: what would happen if Auckland didn’t exist?
Auckland has very strong immigration of foreigners and their labour and capital. Would this all just filter out to provincial cities, or would it simply not happen at all?
Auckland has most of the largest corporations. Would these all locate elsewhere in the country, or would most of them just skip NZ entirely and manage us out of a metropolis elsewhere in the Asia Pacific?
Auckland gets the big international concerts and top tier sporting fixtures, would we have built an international stadium and hosted the RWC final without Auckland, or would we have been lucky to host a few pool games of an Australian bid?
Would Auckland be spending 1/3 of the tax budget if it didn’t exist, of course not. But that money certainly wouldn’t be spent in the provinces otherwise. The real question is how big would the tax take be without Auckland, it’s people and its large companies? The country would be down well more than 1/3.
There is only one logical conclusion in my mind: not only does Auckland pay its fair share, it actually makes the country better off than otherwise.
Bingo, and that’s exactly the right kind of question to ask. H-subscript-nought for the win!
If Auckland hadn’t become as large as it is New Zealand would entered third world status long ago the only thing that sucks life out of NZ are the Neoliberal leeches who killed off any other real industry leaving only primary industry and the finance industry left. If we grow a wider range of industries regional New Zealand can grow without Auckland having to shrink we need Auckland with it’s high population to make knowledge intensive tertiary industries mentioned by other posters more viable.
Auckland’s a poor place to turn grass into money, that’s for sure.
If we want New Zealand to do nothing more than that, then by all means, starve the city. But if we’re interested in doing more, we need Auckland, and we need Auckland to be an international city, capable of building and attracting the kind of activity that keeps it level with the best cities in the world.
Melbourne and Sydney are regularly ranked among the best cities in the world to live and work in, and that’s the reality of our neighbourhood. Mediocrity won’t cut it.
Agree.
Stop people moving to Auckland and allot will instead choose Melbourne or Sydney or Adelaide or Perth or Brisbane over Palmerston North, both domestic and international migrants. The world is urbanising, get used to it.
Exactly, we only have one choice:either we plan to enhance the economy and vibrancy of Auckland, or we don’t plan and enhance the economy of Melbourne, Sydney and Brisbane instead.
If someone from Palmerston North wants urban living, Wellington is the closest choice (It’s certainly much more urban environment than, say, Adelaide). Saying “It’s either Auckland or Australia. Wellington or Christchurch don’t count” is simply pretentious JAFA talk.
We need government to back all of our cities not just Auckland.
You can’t force people to go there though. Things like the Basin Reserve flyover, quality PT, cycling / walking links etc do make an impact on people’s decisions on where to relocate to.
And indeed they do, the data above clearly shows that kiwis from smaller towns and cities aren’t moving to Auckland, not en masse anyway. But that’s not a major economic driver, they’re not brain drain or investment deficit that I’m concerned about.
Auckland struggles to stem the tide of talent and capital from flowing across the ditch to Sydney and Melbourne. Wellington or Christchurch have a quarter the population of Auckland, one quarter the economy, one quarter the business, one quarter the labour pool. That means one quarter the attractiveness to migrants and investors, one quarter the economic base for businesses. If Auckland barely manages to compete with the major Australian capitals, what makes you think Christchurch or Wellington can?
So your angle is Auckland is nothing special and doesn’t matter, and anyone who says otherwise is a pretentious Jafa. I would call that blind parochialism, hating on Auckland is a disease in the country and it really holds us back. I wonder how many people living in Leeds think London is nothing special, how many French think Paris sucks the life out of France?
If Auckland was able to overcome its problems and become a destination city for those south of the Bombay hills then sure it would be bad news for Wellington and Christchurch. Instead of losing population across the ditch, they’d be losing even more population to Auckland! As such I think it’s a pretty tall order to ask Wellingtonians and Christchurchers to back Aucklanders ambitions at their own expense.
Why are Aucklands ambitions at the expense of Wellington or Christchurch? Are you saying they have no ambitions or value of their own, that they won’t succeed unless Auckland throws them a bone?
That’s the whole point. Aucklands growth and success doesn’t steal away from the growth or success of the rest of the country, it’s in addition to it. It’s growth that wouldn’t otherwise happen in the country.
By all means lets get every city in New Zealand growing and becoming richer, but quite frankly the rest have to lift their game too. You can’t do it by throttling Auckland, that won’t push Aucklands economic benefits around the country, it will just mean those benefits don’t happen in the first place.
I like all our major cities, tm, for various reasons… but how is the government failing to back our other cities? Or putting it another way, what special treatment is Auckland getting?
Absolutely we need the government to back all our cities. They all have something to offer. I think the urban environment and liveliness of Wellington is far superior to Auckland, and if the harbour didn’t channel the southerlies from the cook straight right into the city i’d be living there.
Reality is i’m in Auckland. We need freedom of movement, we need auckland council planning for aucklands needs, wellington council planning for wellingtons needs, and the central government to be investing in city infrastructure to the degree that each are expected to grow.
To suggest opposing population control on Auckland means i’m a pretentious Aucklander is ridiculous. I’ve lived here for 3 months.
We can’t afford to keep losing our top New Zealanders to straya. Auckland has a good base to start from and with better infrastructure on the way ( a bit slow as it is) the economy will continue to grow. Auckland is just a smaller version of London, its the powerhouse and we must get use to it.