1. The effect of changing demographics – implications and approaches Dr Natalie Jackson* Invited Address to Local Government Infrastructure Management Forum– Wellington – 30 th March 2015 * Director, Natalie Jackson Demographics Ltd., Professor, School of People, Environment and Planning NATALIE JACKSON DEMOGRAPHICS LTD 1 11/06/2016

2. Implications for growth- Implications for demand-

3. Ageing-driven growth is not the same as youth- driven growth Source: Statistics NZ 2015 Projected population of New Zealand by age and sex, 2014(base)-2068 (50 th and 90 th percentile)

4. Numerical ageing is clear and present 11/06/2016NATALIE JACKSON DEMOGRAPHICS LTD 4 Statistics New Zealand, Estimated Resident Population and Population Projections (2012 and 2015) You are here

5. Structural ageing differs greatly across the country 65+ years: 26.6% (1996 = 19%) 65+ years: 11.4% (1996 = 10.1%) Statistics New Zealand ERP 1996, 2001, 2006, 2013

6. New Zealand’s population growth has never been shared evenly North Island: 2006-13, 32% Census Area Units (CAUs) declined (2001-06 = 25%) South Island: 2006-13, 36% CAUs declined (2001-06 = 27%) Auckland accounted for 52% of growth 1996-2013 (47% 2006-2013) 1996-2013: Auckland plus 5 TAs (4 = cities) accounted for 75% of growth; Auckland plus 12 TAs accounted for 90% of growth Remaining growth spread very thinly across 32 TAs while 22 declined

7. Auckland’s greater share projected to continue – however not just because of urbanisation/agglomeration.. Source: Author/Statistics New Zealand (2015), Subnational Population Projections: 2013(base)–2043

8. Increasingly, hyper-ageing age structures will bring about the end of natural growth 65+ years: 25.6% (19%) Old form of decline Net migration loss – mainly of reproductive age people >> hollows out the age structure New form of decline Net migration loss + natural decline – the loss of reproductive potential becomes self- reinforcing

9. Migration will not solve ‘the problem’ *US Census Bureau International Database; Statistics NZ 2012 Projected subnational population of New Zealand by age and sex, 2006(base)-2031 [2012 Update]

10. A ‘useful’ rise in the birth rate is unlikely – and its 20 years too late Baby Boom ‘echoes’ ‘Official’ Baby Boom 2.1 TGYH

11. Projected change at total population level - suggests an initial reduction in TAs experiencing decline

12. Total change will be underpinned by massive age- structural transitions which will affect every aspect of infrastructure provision

13. Following Gen TGYH (the last major echo of the baby boom), the population 0-14 years will shrink – in most regions/TAs

14. Decline at 0-14 years will be accompanied by shrinkage at labour market entry age There will be a short respite during the 2020s as a recently born baby ‘blip’ passes through these age groups

15. The ‘prime’ working age population (15-64 years) will shrink significantly in many areas – in 2018, 43% of WAPs are projected to be smaller than in 2013 and 61% by 2023 (whilst 8% larger at national level) And yes, people aged 65+ years will work much longer than before, but will not prevent the shrinkage

16. Significant shrinkage will now occur at 40-54 years as the baby boomers vacate that demographic It will be some time before there is growth again at these ages

17. The 55-64 year population is currently growing significantly as it receives the largest baby boomer cohorts This demographic will then decline

18. The 65+ year age groups are also now growing significantly as the leading edge boomers arrive – this is unavoidable growth Growth at these ages will slow as the baby boomers move on to old-old age

19. First will come massive growth at 65-74 years This will generally slow between 2023 and 2033..and be followed by decline 2033-2043

20. .. growth at 75+ years will follow suit..growth >> slower growth, but numbers will not decline

21. Only 17 TAs will not have all growth to 2033 at 65+ years % growth 2013-2033 at 65+ years Territorial Authority Area (SNZ 2015 Revision) 94-99 % Kapiti Coast; Whangarei; Carterton 80-88 % New Plymouth; Waipa; Hurunui 61-69 % Wellington; Waimakariri; Christchurch; Palmerston North 55 % Waikato 46-48% Ashburton; Tauranga 35-37 % Auckland; Selwyn; Hamilton; Queenstown Source: Statistics NZ 2015 Projected sub-national population of New Zealand by age and sex, 2013(base)-2043 NB. 11/16 Regions (69%) all growth at 65+ years 11/06/2016NATALIE JACKSON DEMOGRAPHICS LTD 21

22. 2/3 NZ TA’s already have fewer labour market ‘entrants’ than ‘exits’ (unemployment is likely to fall >> disappear >> labour costs will go up) OBSERVED PROJECTED Source: Author/Statistics New Zealand, Estimated Resident Population;(1996-2013) ;Subnational Population Projections: 2013(base)–2043 TGYH arrives!

23. New Zealand Employed Labour Force 1996, 2013 (+23%) Source: Author/Statistics New Zealand Customised Occupation Database 11.5% 27:10 9:10 Av. Age 38.3 years Av. Age 43.3 years The employed labour force already has fewer people at entry than ‘exit’ age

24. We have recently entered a ‘demographically-tight’ labour market Projected Source: Statistics NZ various years; (2015) Projected population of New Zealand by age and sex, 2013(base)-2043 Baby Boomers entering labour market Baby Boomers leaving the labour market Ratio of potential labour market ‘entrants’ (15-29 years) to ‘exits’ (55+ years)

25. Many Industrial and Occupational ‘entry: exit’ ratios are getting seriously low Skills shortages are increasing; labour shortages will follow

26. Approaches – McMillan, Rachael (2015 forthcoming). Anticipating depopulation – strategic interventions to population decline. Masters thesis, University of Waikato.

27. “Towns are like businesses – they need to keep reinventing themselves in the global marketplace to remain competitive. However, the market has not been able to find the solution to demographic decline. There is a symbiotic relationship between the regions and the cities that is important for national competitiveness that cannot be ignored. Regional policy trends are shifting away from single sectors to cooperative, multi-actor approaches that deal with place- based issues.” McMillan (2015 forthcoming) 11/06/2016NATALIE JACKSON DEMOGRAPHICS LTD 27

28. Summary of policy positions 11/06/2016NATALIE JACKSON DEMOGRAPHICS LTD 28 Do nothing Denial Ignoring Passive restructuring Market adaptation Countering Competitiveness Interconnection Accepting Managing Utilising McMillan, R (2015 forthcoming)

29. The old economy versus the new economy 11/06/2016NATALIE JACKSON DEMOGRAPHICS LTD 29 McMillan, R (2015 forthcoming); Adelaja et al. 2009

30. The A-B-C of population ageing Accept o Major demographic shifts are coming to a region near you o Awareness >> Alarm >> Acceptance Buffer o Revisit/revise business plans, policies, principles on which they are based o It’s the ‘can’t do it because’ that has to change Choose your strategy o Communicate, collaborate, conserve.. o Watch out for McMillan 2015 Local government and business leaders will need to show the way..

31. Thank you Enquiries welcome Email: demographics@nataliejackson.netdemographics@nataliejackson.net N.O.Jackson@massey.ac.nz Website: www.nataliejackson.netwww.nataliejackson.net Planning for a changing world NATALIE JACKSON DEMOGRAPHICS LTD 31 11/06/2016