Tag Archives | Migration

Migrants still coming, but more leaving

The big change in migration in the last month & the last 12 months is the rise in exits from New Zealand.

Statistics NZ’s latest figures, for May, show arrivals down by 240 compared to May last year, but departures up by 550. For the year, arrivals were down by 200 but departures were up by 5500.

The net results for the month are that migrant arrivals fell to 8140 (8386 a year earlier), departures rose to 5818 (5269) and the net inflow fell to 2322 (3117).

For the year to May, the inflow fell marginally to 130,209 (130,403), the exits rose to 63,966 (58,439) and the net inflow fell to 66,243 (71,964).

The net outflow to Australia was down from 486 in April to 340 in May. In May last year the net flow was 45 to New Zealand. For the year to May, there was a net outflow of 547 compared to a net inflow of 790 in the previous 12 months and 1739 inflow in the May 2016 year.

Australia was the only country where the flow turned negative, but net inflows from 2 other countries were well down – China by 1940 to a net 8278, and the UK by 1021 to a net 5513. The inflow from India was down by 826 to a net 6767.

As is most usual, more Kiwis left than came home in May and in the 12 months to May – net outflows of 1090 for the month, 1386 for the year.

The Kiwi departure rate topped 60,000 (61,849) in the May 2012 year, and the net Kiwi outflow that year was 39,413. 500 more Kiwis left that year than citizens of all other countries arrived. The net flow in those 12 months, all migrants, was outward by 3653.

Since then, the net inflow doubled in the May 2013 year to 6242, was 6 times higher in 2014 at 36,397, and hit 71,964 last year. The peak was 72,402 in the 12 months to July 2017.

The net outflow of NZ citizens to Australia was 39,460 in the May 2012 year, a few more than the total Kiwi outflow, so somebody must have come home. Since 2012, the Kiwi net outflow to Australia fell to 34,011, then slumped to 13,587, and in the last 4 years has been a trickle – 6169, 3664, 4423 & 5559.

In Auckland, arrivals were down slightly in May to 3691 (3787) and departures up slightly to 2136 (1888) for a net inflow of 1555 (1899) for the month, and down for the year to 33,695 (36,270).

With changes to house-buying laws imminent through the Overseas Investment Bill now before Parliament, the kind of visa people are on becomes more important. The annual statistics show holders of residence visas down at 14,109 (16,736), student visas down slightly to 23,670 (23,740), work visas up to 46,536 (44,459).

Attribution: Statistics NZ.

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Treasury paper questions Auckland’s actual population growth

An analytical paper published by the NZ Treasury last week raises questions about the accuracy of migration figures, largely because of the hard-to-analyse internal migration.

The paper’s author, senior Treasury modelling analyst Keith McLeod, said in its introduction: “Our estimate of Auckland population growth due to net migration between 2013-16 is about half the official figure.”

The paper describes new sub-national New Zealand population measures that Treasury has developed using integrated administrative data. They’re in an interactive online form in Treasury’s Insights tool.

The paper doesn’t accuse others of getting things wrong – and Treasury says of its own work that it can’t be trusted yet. It’s more a case of additional information giving a more accurate picture of population movements.

Mr McLeod: “New Zealand has a robust system of population estimates, and the data described in this paper has the potential to complement this system. Nevertheless, the results are exploratory in nature, and further work is required to better understand the strengths & limitations of the data. The findings are not official statistics and should be treated with caution.

“A particular strength of the analysis outlined here is the ability to measure & describe patterns of internal migration within New Zealand, something that has previously been largely reliant on the 5-yearly census.

“The analysis not only describes patterns of internal migration, but sets these alongside other key dimensions of population change: ageing, natural increase & international migration.”

Estimates aren’t immediately available for release, and results for a particular calendar year are only likely to be able to be produced 9 or more months after the end of that year.

The Auckland question

On the question of Auckland’s growth, the paper says: “Auckland, New Zealand’s largest city, has experienced year-on-year growth since 2008. This has been driven largely by migration from overseas, with foreign migrants more than offsetting net losses of New Zealanders moving away.

“Since 2012, increasing numbers of people have been leaving Auckland to move to other areas, especially Tauranga, Waikato District, Whangarei & the Far North. This has slowed population increase in Auckland over that period.

“Although the case studies presented here tell a similar story to official population estimates, there are some differences, particularly in Auckland, where our estimates show much lower population growth in recent years.

“Our estimate of Auckland population growth due to net migration between 2013-16 is about half the official figure.

“More work is required to better understand these differences. The difference could derive from the difficulty in determining people’s location of residence after their arrival in New Zealand in either or both of the sources, or may relate to the different residence definitions adopted.”

  • For me, this research is very welcome because information on internal migration has long appeared to be lacking.

Link:
Treasury Insights analytical paper, 18 April 2018: Where we come from, where we go – describing population change in NZ

Attribution: Treasury Insights.

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Over half net migrant inflow is into Auckland as destination

New Zealand’s migrant inflow rose slightly in January, has fallen by 1200 over 12 months but is still running at just above 70,000/year.

Statistics NZ’s monthly tally showed arrivals in January totalled 14,889 (14,457 in January last year), exits 6312 (6011) for a net inflow of 8577 (8446).

For the January year, arrivals were 131,998 (128,290), exits 61.851 (56,985) for a net inflow of 70,147 (71,305).

From a high point of 72,402 last August, the net inflow fell to 70,016 in the December year.

The net flow of migrants across the Tasman has been negative (ie, to Australia) this January & last, and the annual net flow was only slightly – by 38 – positive in this direction.

The net outflow for the month rose from 246 last year to 317, and the annual net flow to New Zealand fell from 1264 last January to 38 this January.

The annual flow of migrants from both China & India dipped, but the numbers from the Philippines, South Africa & the UK rose. The annual flow from China was 9308 (10,197 the previous 12 months), India 6707 (8560), the Philippines 4775 (4580), South Africa 4946 (4533) & the UK 6136 (5981).

Non-citizen arrivals continue to comfortably exceed exits – 8750 versus 2570 for a net inflow of 6180 for the month, but 30 more departures than arrivals by NZ citizens (2730 versus 2700).

The flow into Auckland as a destination remained high – 6833 for the month (6871 in January last year, 5962 2 years ago) – while departures remained low at 2382 (2335). The net inflow was down slightly for the month at 4451 (4536) but up for the year at 36,067 (34,660).

The number of Indians arriving on student visas continued to decline, to 5811 for the last 12 months (6457 the previous year and 10,558 2 years ago). Chinese arriving on student visas have also fallen in the last 12 months, to 5263, after rising from 5497 to 5612 in the previous 12 months.

Outcomes-based migration measurement updated

Stats NZ updated its outcomes-based measure of migration – the 12/16-month rule – last week, taking the series forward to September 2016.

It was introduced in May 2017 and identifies an individual’s migrant status when Stats NZ observes their travel history, and their length of stay in New Zealand, after a 16-month follow-up period.

Population insights senior manager Peter Dolan said: “It differs from the traditional method of classifying permanent & long-term migrants (PLT) that we base on their stated intention on arrival & departure cards.

“The 12/16-month rule showed net migration in the September 2016 year was 64,500, compared with 70,000 as defined by the PLT migration measure. September 2016 is the most recent available period for outcomes-based migration, due to the 17-month lag to produce migration figures by the 12/16-month rule.

“Migrant statistics that rely on passengers’ stated intentions are affected by uncertainty around people’s assumptions about how long they will be in New Zealand.

“Using an outcomes-based measure of defining migrants gives us a clearer picture of the actual migration patterns in New Zealand, and aligns with the approach taken in Australia.”

Links:
For more information on the 12/16-month rule, see:
Defining migrants using travel histories and the ’12/16-month rule’
Outcomes versus intentions: Measuring migration based on travel histories

Attribution: Stats NZ releases & tables.

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Migration – quick numbers

Below are the basic migration numbers for the month of August & 12 months to August. I’ll fill in some gaps this afternoon with a longer story, including a few inputs likely to change the trend.

The bald statistics:

Net migrant inflow August: 5120 (5450 in August last year)
Net migrant inflow August year: 72,072 (69,119; 72,402 in the 12 months to this July)
Migrants into Auckland in August: 4683 (4430)
Migrants into Auckland in August year: 59,700 (53,365)
Net Auckland inflow in August: 2754 (2711)
Net Auckland inflow in August year: 36,796 (32,187).
Net outflow to Australia in August: 330 (22 inflow)
Net outflow to Australia in August year: 1464 (2588).

Attribution: Statistics NZ tables & release.

 

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Immigrants drive 2%/year population growth, 10-14yos decline

New Zealand’s population grew by over 2% in each of the last 2 June years, and by a record 100,400 in the last 12 months.

Over the last 5 years, the population grew by nearly 390,000 – exceeding the population of Christchurch.

At 30 June, Statistics NZ estimated the resident population at 4.79 million. By tonight, it exceeded 4.8 million – 4,805,505 on the Statistics NZ population clock as I write.

Over the last 4 years the natural increase has been under 30,000/year, compared to annual increases up to 36,200 during the previous 7 years.

The migrant figure went negative in the June 2012 year – 3200 more people leaving than arriving – but in the last 4 years the net migrant inflow has totalled 238,000, of whom 72,300 have arrived in the last 12 months.

Statistics NZ said the current gain from net migration equated to 15 people:1000 population. Population statistics senior manager Peter Dolan said much higher net migration rates were experienced in the late 1870s, and similar rates to today were also experienced in the early 1900s & early 2000s.

“Our current net migration rate is high by New Zealand standards, but historically it has fluctuated more than other countries. At the moment we’re experiencing rates similar to Australia’s in 2009.

“Most migrants are arriving on short-term work & student visas. However, many of them extend their visas, or transition to other visa types including residence visas. It makes sense to count long-term stayers as part of our population, rather than as short-term visitors.”

Mr Dolan said half of last year’s growth was in the 15–39 age group: “This reflects the contribution of migration to our population growth, with net migration of 50,000 among those aged 15–39 years.”

As a result of recent migration flows, the share of New Zealand’s population aged 15–39 years rose from 33% in 2013 to 34% in 2017. This was a reversal of the trend that saw that bracket’s share drop from 41% in the mid-1980s.

Growth of the broad 65+ age group has continued to accelerate, up 25,000 in the last year, as the large birth cohorts of the 1950s-early 1970s begin to reach those ages.

The population at the oldest ages is also growing, reflecting decreasing death rates at all ages over a long period of time. The 90+ population is now 30,000, compared with 20,000 in 2007. It’s projected to reach 40,000 in the late 2020s and 50,000 in the early 2030s.

One group that has increased more slowly is the under 5s – up by just 800 in the last year and by 12,720 over 10 years. The 10-14 age group’s numbers rose in the last year, but both the last 2 years were lower than 10 years ago – 306,380 in 2007, 294,330 last year, 301,360 this year.

Link, and links to graphs:
National population estimates at 30 June 2017

Attribution: Statistics NZ release & tables.

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Half the record net migrant inflow is into Auckland

The net inflow of migrants continued to rise in June, reaching a record 72,305 for the June year – and 50% of that total was into Auckland.

Immigrants giving Auckland as their destination rose by 6142 to 59,076 for the 12 months, rising from 42.3% to 45% of all immigrants. The number not giving a final destination fell from 21,244 (17%) to 18,840 (14.3%).

The meteoric rise in net immigration over the last 5 years – from a net outflow of 3191 in the June 2012 year – has resulted from a combination of rising immigrant numbers and declining emigrant numbers. But in the last 12 months that picture has changed slightly.

For June, the number of immigrants was up by 950 to 9158, continuing a steady rise since 2010. On the departures side of the ledger, emigrants dropped to 4534 last June but rose to 5145 last month.

For the June year, arrivals rose from 82,305 in 2010 to 131,355 in the last 12 months, with big jumps in 2014-216, slipping back to a rise of 6300 in the last months. Departures declined from 87,593 in the June 2012 year to 55,965 in the June 2016 year, but bumped up to 59,050 in the last 12 months.

For Auckland, the net inflow in June was 2106 (1726 & 1571 in the previous 2 years). For the June year, the net inflow rose from 26,834 to 31,778 to 36,650 – 50.7% of the total net inflow.

The number of immigrants from Australia dropped slightly for both month & year – by 70 for the month to 1612, and by 262 for the year to 25,441.

Exits to Australia rose for both month & year – by 160 to 1781 for the month, and by 1111 to 24,881 for the year. The net gain shrank from 1933 to 560 for the year.

Other major immigrant sources for the year were China with a net inflow of 10,351 (9688 the previous year), India 7409 (12,118, down chiefly because student visa numbers declined), the Philippines 4646 (5010), the UK 6728 (4138) & South Africa 4867 (3054).

Attribution: Statistics NZ tables & release.

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The migration debate: Which way forward?

Statistics NZ will publish the monthly migration figures this Friday and, on recent trends, the net inflow is likely to be just over 72,000/year. The Labour Party believes it can cut that by 20-30,000/year by enforcing rules more tightly.

Gareth Kiernan.

On Friday, economist Gareth Kiernan warned that cutting the number sharply could cause a slump. Mr Kiernan’s premise seemed to be that more migrants were needed to service the needs of more migrants, and that cutting the number of migrants would take away the workforce needed to service those extra migrants.

His second point was not about migrants but about the behaviour of the Reserve Bank. His slump would arise not so much from cutting immigration but from the central bank ignoring changes in the economy and raising interest rates anyway, thus harming the economy.

All political parties agree that immigrants should add to New Zealand, not detract, and the Government’s critics take that a step further, saying the direction “export education” has taken, toward low-level learning & backdoor entry to permanent residency status, should therefore be curtailed.

Who builds our houses?

The first irony in New Zealand’s immigration debate is that many of the companies building much-needed houses in Auckland are owned by immigrants, often with investor support in Hong Kong or China.

You could say that, without so many immigrants from Asia, the input of these Chinese builders wouldn’t be needed. However, 2 of New Zealand’s biggest housing companies through decades, Universal & Neil, have been Asia-owned for years. A third, GJ Gardner, is an Australian franchise. Would New Zealand have built as many houses as it has in recent years without that foreign input?

How to get voters to switch – or not

The second irony is that, since 1972, no party (or party in coalition) has held power beyond 3 consecutive terms, but Labour & the Greens appear determined to hand National a fourth term because they haven’t enunciated policies which will pull voters to them from outside their bases.

As I was writing this, a new campaign call for support arrived in my inbox from the Greens. In the middle of its worthy aspirations was this sentence: “To do this, we need to you.”

We all make mistakes, but I read that puzzling sentence shortly after trying to wade through the party’s verbiage on migration, which read more like a call to support refugees and close the door to people the party doesn’t like, notably rich people.

Under policy point 5, Selecting voluntary migrants, I took greatest delight in point 4, which followed a statement that “people shouldn’t be able just to buy their way into Aotearoa”:

  1. Tighten up on scams in which overseas millionaires buy up NZ property by making business-development promises that they don’t keep. We will do this by
  2. Using a 3-year provisional visa for investor migrants
  3. Undertaking annual audits of investor migrants’ businesses via extended case management, paid for by the business being audited
  4. Ensuring that the audits include checks for viability, sustainability & desirability and are undertaken by immigration officials, an accountant & a marketing consultant. These audits, prepared independently, together with a police report & any complaints, will form the basis of the decision.

I’ve always found the chip-on-shoulder view of life is as distorted as the silver spoon version, and bludgeoning aspiring Kiwis with this vengeful kind of red tape doesn’t seem a good way to make friends.

Labour acknowledges migrant heritage, but…

The Labour Party acknowledges New Zealand’s immigrant heritage in its policy, but says National, in its 9 years heading the Government, “has failed to make the necessary investments in housing, infrastructure & public services that are needed to cope with rapid population growth. This has contributed to the housing crisis, put pressure on hospitals & schools, and added to the congestion on roads.”

Labour, in government, had an immigrant spike in 2003-04 – unannounced, unmanaged and, because local councils had no warning of the influx, they weren’t prepared to cope with it. The economic boost helped the party get re-elected in 2005. National’s spike of the last 3 years has gone for longer, but both have left large infrastructure deficits and speculation-promoting price escalation as direct consequences.

Labour reckons it can cut net immigration by 20-30,000/year.

That’s going to happen anyway as soon as Australia gets back on to what had been assumed to be a never-ending economic growth path, so the immigration cut in New Zealand could go deeper, reducing the net inflow to 10-20,000/year.

Australians thought wrecking the economy was beyond the ability of any politician, but finally they found a couple who could do it. However, the mining sector is looking more positive by the day and “the lucky country” will soon be just that again, and thereby thoroughly inviting to thousands of New Zealand tradesmen.

When those tradesmen start to head west again, New Zealand will once more be left pondering how to fill the gaps. Kneejerk responses aren’t an effective alternative to sound long-term policies, but kneejerk is where the migration debate has headed.

GST sharing rebuff was an opportunity missed

The National government’s unwillingness to share gst windfalls from the rise in tourist numbers made it plain that the governing party’s floundering was exasperating business people around the country; an opposing party that offered a raft of constructive new economic policies incorporating changes to tax distribution could have lifted its vote immensely.

Slump talk

Mr Kiernan, Infometrics’ chief forecaster, thrust his tuppence-worth into this policy abyss on Friday, when the economic forecasting company’s latest predictions indicated gdp growth would slip below 2%/year this year – before any further help downward from politicians slashing migration.

The threatened migration clampdown would lead to an economic slump, he wrote, adding: “New Zealand’s economic growth is being constrained by shortages of labour in key areas, and this problem will become more widespread if there is a significant & rapid tightening in migration policy following this year’s election”.

Slower near-term growth in construction activity & household spending would cut growth, he said.

“Although growth is forecast to rebound during 2018, that pick-up is contingent on the continued supply of labour provided by foreign migrants coming to New Zealand for work, on which businesses have become increasingly dependent.

“High levels of immigration have undoubtedly contributed to stresses around infrastructure & the housing market, particularly in Auckland. But employment growth of more than 1%/quarter over the last 18 months demonstrates the need for workers across the economy.

“Without these inflows of foreign workers & returning New Zealanders, businesses would have struggled to meet growing demand, and cost pressures would be even more intense in areas such as the construction & tourism sectors.”

Mr Kiernan’s warning invites the question: If the number of immigrants falls, so too will demand, and the economy should become more manageable, supposedly enabling a catch-up in the supply of infrastructure & houses. A slowdown, yes, but a damaging slump?

Mr Kiernan said cutting immigration this year would have negative repercussions for economic growth during 2018 & 2019, constraining activity through higher labour costs: “The inflationary risks associated with these cost pressures would also be likely to compel the Reserve Bank to raise interest rates sooner than would otherwise be the case.

“Given the slowdown already occurring in sales activity & house price growth, this potential cocktail of rising interest rates mixed with a government clampdown on migration would be lethal.

“Even with modest increases in interest rates from mid-2018, medium-term growth in household spending will be constrained by high debt levels, which have climbed from 146% to a record high of 167% since 2012.

“Faster lifts in mortgage rates & debt-servicing costs would threaten a jump in forced house sales, hastening a correction in the housing market and hammering consumer confidence.”

Those supposed consequences look like consequences of not adjusting policy to match changed conditions.

Mr Kiernan said the surge in migration over the last 4 years could have been more carefully managed, thereby preventing the housing market imbalances from becoming so critical. But, although he expected net immigration to gradually ease over the next 5 years, “a cautious approach is needed to avoid replacing one lot of problems in the economy with a completely new set. Ultimately, high migration levels are a positive reflection on New Zealand’s economic performance. We’ve been able to attract & retain workers in this country because our growth over recent years has outpaced that in other developed economies.”

Not quite true. A high proportion of immigrants have been low-level students-come-menial workers who have held bottom-rung wages down. At the same time they have increased demand for services, and for housing.

While I’ve said Labour hasn’t enunciated policies that would pull voters from other parties, elaborating on how a reduction in immigration would be done – and what it would achieve for other groups – would rebalance the political scales.

Links to party immigration policies:
Act
Greens
Labour
NZ First
TOP (The Opportunities Party)
Infometrics

Attribution: Infometrics release, party policies.

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Net migrant inflow tops 71,900 for year

New Zealand’s net migrant inflow jumped again in March to a new record of 71,932 over 12 months.

That’s 6.4% (4300) ahead of the net inflow in the previous 12 months.

The net inflow in March has exceeded 4000 for the last 3 years, and this time round the number jumped by 600 – 14% – to 4878.

The number of migrants coming into Auckland jumped by 13% in March, from 4194 a year ago to 5267, and by 10% for the year, from 52,443 to 57,710.

The net inflow to Auckland is up 14.5% over 12 months, from 31,230 to 35,772.

That means 49.73% of the whole net inflow over the last year has made Auckland the destination.

Statistics NZ said migrant arrivals in the last 12 months, 129,518, were a record, while departures were up by 1100 over the previous year to 57,586 after 4 years of declines.

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Even in January, immigration leaps

The net migrant inflow leapt over the 71,000 mark for the January year. Long-term arrivals jumped by 1000 from last January to this one while exits rose by 300 for a net gain of 700 to 8446.

For the year, arrivals have risen by 5300 and exits have fallen by just 67.

The net amounts to a rise in immigration for the January year of just under 5400, to 71,305.

Arrivals from Australia were up by 29 and departures to Australia by 20, raising the inflow margin by 9 to 1264 for the year. 2 years ago it was a net outflow of 2888 and, in the previous 2 years, 17,064 & 37,936.

There is still a net outflow of NZ citizens, though not by much. For 6 of the 7 years to January 2013, NZ citizen exits for that month were in the range of 6-7000 and 2-3000 came home. The result over those 7 Januaries was an average outflow of 3800. Net exits for the month went under 1800 in January 2014, under 900 a year later, then to 474 and now to 385.

The annual net outflow has now fallen below the level for one month 3 years ago – 1729 versus 1781.

The latest annual NZ citizen outflow is 2500 below the level of the previous year and a quarter of the net outflow 2 years ago. Before that, the net outflow was measured in 5 digits – 19,687 in the January 2014 year, almost double that in each of the previous 2 years (37,922 & 37,602).

Of the 14,457 arrivals in January, 4400 said their destination was Auckland 1259 didn’t say where they were going.

Of the 128,290 arrivals in the January year, 56,231 (43.8%) said their destination was Auckland, up from 51,831 (42.2%) in the previous 12 months. The net annual inflow to Auckland rose by 3400 to 34,660 (30,369), or 48.6% of the net inflow, up from 48.05% in the 12 months to December.

The January figures set a number of records – the net inflow for the 12 months to December, 70,588, was the previous high. Migrant arrivals, at 128,290, were a record. The previous record, also set in December, was 127,305.

The net inflow from China took to place for the year again, passing India. For the 12 months to January, the net flow from China was 10,197 (9124 the previous year) and from India, 8560 (12,991 after student visa questions), followed by the UK 5981 (3680) & the Philippines 4580 (5127).

Statistics NZ said the 3,537,561 overseas visitors for the 12 months was a record, up 11.5% on the previous year, and the 2,635,331 NZ residents heading overseas was a record, up 8.9% on the previous year.

165,673 NZ citizens took off on overseas trips in January, up from 145,708 a year earlier, and 288,306 came back that month (262,570).

Attribution: Statistics NZ tables & release.

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Leading banker takes Australian politicians to task on governance, finance, infrastructure, urban prospects

Australian politicians’ ears must have been burning when bank chief Ken Henry addressed the country’s Committee for Economic Development in Canberra on Thursday, because he wasted no words in portraying the destruction – instead of construction – of a sound future they continued to guarantee.

The Unconventional economist on MacroBusiness, Leith van Onselen, wrote: “Dr Henry pulled no punches in admonishing the Government’s negligence in managing Australia’s mass immigration programme.”

Mr van Onselen also raised questions arising from Australian Productivity Commission reports, including An ageing Australia: Preparing for the future.

But migration & age were just 2 of the questions raised by Dr Henry, who chairs the National Australia Bank. He talked about the notion that endless growth was a practical proposition for Sydney & Melbourne, how every proposal for major infrastructure was drowned in political wrangling and – in the sector he knows best – how every tax reform proposal of the last decade had failed.

Below are some excerpts from his speech:

Business at odds with community

“According to our research, Australian businesses see our strong rate of population growth as a positive. …. In the broader community, there is considerably less support for a larger population. People are concerned about the impact of a growing population on traffic congestion, urban amenity, environmental sustainability & housing affordability. And they worry about our ability to sustain Australian norms of social & economic inclusion. These concerns are understandable.

“Australia’s business leaders have to accept responsibility for ensuring that strong population growth, and the investment opportunities that go with it, lift economic & social opportunity for all, without damaging the quality of the environment we pass to future generations. That means that we have to take an interest in traffic congestion, housing affordability, urban amenity & environmental amenity, including climate change mitigation & adaptation….

“If we want better access to skilled domestic workers, then we are going to have to offer those workers the prospect of better lives. If we want modern & efficient infrastructure, then we are going to have to take an interest in the design of our cities; we are going to have to take an interest in regional development; and we are going to have to take an interest in the planning of new urban centres.

“If we want less red tape & less regulation, then we are going to have to demonstrate that regulation is not necessary….

“Meanwhile, our politicians have dug themselves into deep trenches from which they fire insults designed merely to cause political embarrassment. Populism supplies the munitions. And the whole spectacle is broadcast live via multimedia, 24/7. The country that Australians want cannot even be imagined from these trenches….

“Almost every major infrastructure project announced in every Australian jurisdiction in the past 10 years has been the subject of political wrangling. In the most recent federal election campaign, no project anywhere in the nation – not one – had the shared support of the Coalition, Labor & the Greens.

“Every government proposal of the last 10 years to reform the tax system has failed.

“And the long-term fiscal, economic growth & environmental challenges identified in 4 intergenerational reports over the past 15 years?  The opportunities identified in the White paper on Australia in the Asian century? Simply ignored.

“The reform narrative of an earlier period has been buried by the language of fear & anger. It doesn’t seek to explain; rather, it seeks to confuse & frighten.

“Meanwhile, the platform burns.”

Growing Sydney & Melbourne

Dr Henry also spoke about the Australian budget & tax system, a strongly growing but aging population, climate change & energy security, and making the most of the Asian century.

“How will we fund the biggest infrastructure build in our history? And what about infrastructure planning?” he asked, before questioning the sense in adding 7 million people to the populations of Sydney & Melbourne:

“On the basis of official projections of Australia’s population growth, our governments could be calling tenders for the design of a brand new city for 2 million people every 5 years; or a brand new city the size of Sydney or Melbourne every decade; or a brand new city the size of Newcastle or Canberra every year. Every year.

“But that’s not what they are doing. Instead, they have decided that another 3 million people will be tacked onto Sydney and another 4 million onto Melbourne over the next 40 years.

“Already, both cities stand out in global assessments of housing affordability & traffic congestion.

“And even if we do manage to stuff an additional 7 million people into those cities, what are we going to do with the other 9 million who will be added to the Australian population in that same period of time? Have you ever heard a political leader addressing that question? Do you think anybody has a clue?

“At the very least, we are going to have to find radical new approaches for infrastructure planning, funding & construction. And that includes energy infrastructure, critical to our economic performance and our quality of life.

“The biggest challenge confronting the energy sector is that climate change policy in Australia is a shambles. At least 14 years ago, our political leaders were told that there was an urgent need to address the crisis in business confidence, in the energy & energy-intensive manufacturing sectors, due to the absence of credible long-term policies to address carbon abatement. It is quite extraordinary, but nevertheless true, that things are very much worse today.”

  • Dr Henry was Secretary of Australia’s Treasury Department from 2001-11, and was appointed a director of the National Australia Bank in November 2011 and chair in December 2015. From June 2011-November 2012, he was special advisor to the prime minister with responsibility for leading the development of the white paper on Australia in the Asian century. He’s a former member of the board of the Reserve Bank of Australia, the Board of Taxation, the Council of Financial Regulators, the Council of Infrastructure Australia and chaired both the Howard government’s tax taskforce in 1997-98 and the Rudd government’s review of the tax system in 2008-09, and he’s governor of the organisation he was addressing above, CEDA.

Links:
23 February 2017: NAB chair Ken Henry’s full speech at CEDA
Unconventional economist on MacroBusiness, 24 February 2017: Australia can’t build its way out of population ponzi
Unconventional economist, 24 February 2017: Bigger cities are engines for inequality
Australian Productivity Commission, November 2013: An ageing Australia: Preparing for the future
Committee for Economic Development of Australia

Attribution: NAB, CEDA, MacroBusiness.

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