PEOPLE ARE IMPORTANT: THE DEMOGRAPHIC CHALLENGES FACING NEW ZEALAND AND AUSTRALIA

1. PEOPLE ARE IMPORTANT: THE DEMOGRAPHIC CHALLENGES FACING NEW ZEALAND AND AUSTRALIA by Graeme Hugo ARC Australian Professorial Fellow Professor of Geography and Director of the National Centre for Social Applications of GIS, The University of Adelaide Presentation on the Occasion of the Launch of the National Institute of Demographic and Economic Analysis (NIDEA), Te Runanga Tatari Tatauranga – University of Waikato  24 November 2010

2. Outline of Presentation • Introduction • Why is Demography Relevant? • The Demographic Challenges in OECD Countries - Ageing and the Workforce - International Migration - Climate Change • Policy Implications • Conclusion

3. Demography The scientific study of the changing size, composition and spatial distribution of the population and the processes which shape them.

4. Demographic Study • Analysis of trends • Identifying causes • Projecting future populations • Identifying implications

5. Demography and the Future • Projections Vs Predictions • Indicates what the population will be like given certain assumptions • A partial window on the future

6. Why is this Important? • Most business and government involves providing goods or services to people • Hence demand is influenced by: - number of persons - their characteristics - their ability to purchase • Demography does not fully determine demand but it does exert a strong influence

7. How can Demography Assist Business? • Marketing and retailing : identifying, locating and understanding the diverse consumer groups that form markets for goods and services • Human resource planning • Site selection and evaluation • Tracking emerging markets

8. Demography and Markets • The population is constantly changing • The mass market has been replaced by segmented markets • Identifying growth in particular segments of the market can give a competitive advantage

9. Exploding Myths About Population • Population is dynamic, always changing, but the change is gradual • Population is influenced by economic change but not a function of them • Some population change is structural – inevitable and predictable • Population is amenable to policy intervention

10. “Over the next couple of decades nothing will impact OECD economies more profoundly than demographic trends and, chief among them, ageing”Jean-Philippe Cotis Chief Economist, OECD March 2005

11. Labour Force Age Groups and Dependency RatesSource: World Bank, 2006

12. Contemporary Population Growth Rates (% pa) Source:ESCAP 2009; Population Reference Bureau 2008 and 2009; ABS 2010; Statistics New Zealand

13. ABS Projections of the Population of Australia, 2005 and 2008Source: ABS Estimated Resident Population data and Projections 2008

14. Structural Ageing:Australia: Change by Age: 2006 – 2021; 2031 (Series B)Source: ABS 2008 Projections

15. Baby Boomers 2006 • 27.5% of Australian Population • 41.8% of Australian Workforce • 23.9% of New Zealand Population • 35.8% of New Zealand Workforce

16. Wittert 2006

17. Coping with Ageing Populations (UN) • No single action can adequately address the problem. No “silver bullets” • Policy adjustments should be carried out be effecting small changes in many domains • Making adjustments early is easier than delaying things until there is a crisis

18. Specific Actions (UN) • Increase labour force participation • Immigration • Increased age at retirement • Decrease benefits to retirees • Increase contribution of workers to social security system • Change in social security system from pay as you go to capitalisation • Promotion of increases in productivity and development of new innovations

19. The 3Ps of Growth in Real GDP Per PersonSource: Swan 2010, p.xiii

20. The Fourth P: Preparation • At individual and household levels • Community and provincial levels • National level

21. The New Paradigm of International Migration • Transnationalism Vs Permanent Relocation • Increased focus on skill • Increasing “onshore” migration • The challenge of refugees and asylum seekers • Development can be positive for sending areas

22. The New Paradigm of International Migration (cont.) • The Pacific Challenge • Changing balance between Gateway Cities and Regions • Emigration and the Diaspora • Environment and Migration

23. Top Immigration Countriesa, 2010percentage of population Source: World Bank, 2011

24. Top Emigration Countriesa, 2010percentage of population Source: World Bank, 2011

25. Global Skilled Migration Twin Drivers • Demographic differentials • The war for talent – increasing demand for human capital

26. National Diasporas in Relation to Resident National PopulationsSource: US Census Bureau, 2002a and b; Southern Cross, 2002; Bedford, 2001; Ministry of External Affairs, India, http://indiandiaspora.nic.in; Naseem, 1998; Sahoo, 2002; Iguchi, 2004; Gutièrrez, 1999; Philippines Overseas Employment Service; Asian Migration News, 15-31 January 2006; OECD database on immigrants and expatriates; Luconi 2006; Nguyen Anh 2005; http://en.wikipedia.org/wiki/korean_diaspora

27. Emigration, Development and Diaspora • Shift in Discourse • Potential Positive Role - Remittances - FDI - Social Remittances - Return - Permanent - Temporary - Virtual • The key role of policy in origin and destination

28. Reassessing the Settlement System • New environment and economic reality • New elements of economy – tourism, mining, growing importance of food security, agriculture, processing • New environmental realities • New methods of transport and communication • The baby boomers • Climate change

29. The Climate Challenge • Environment and Population • Internal Population Distribution • International Dimensions – the Pacific

30. The Population Dilemma in Australia • The need for growth – increased demand for workers and replacement task for baby boomers • The constraints of environment

31. The Role of Policy • Anticipating shifts in population and preparing for them • Developing policy to intervene to influence population change

32. What is Needed? • Currently there is an unproductive debate between 'pro growth' and 'stop growth' lobbies • There must be trade offs and compromises which facilitate growth with sustainability, informed by the best information and knowledge available across all relevant disciplines • Regardless, there will be substantial continued population growth over the next two decades but we need to carefully consider (a) How much growth and not adopt unsubstantiated aspirational population targets? (b) Where is that growth best located?

33. The Role of Research • Discourse around the population issue is too often subject to self interest, populism, bigotry and misinformation • The debate is often hijacked by interest groups • Need for soundly based, focused and multi-disciplinary research to inform both public debate and policy formulation

34. Conclusion • Demographically Australia and New Zealand are better placed than most OECD countries to fact the challenges of the next 2 decades • However policy intervention will be needed to maximise opportunities and minimise negative effects • The role of NIDEA