PEOPLE ARE IMPORTANT: THE DEMOGRAPHIC CHALLENGES FACING NEW ZEALAND AND

AUSTRALIA

byGraeme Hugo

ARC Australian Professorial FellowProfessor 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

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

Demography

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

Demographic Study

• Analysis of trends

• Identifying causes

• Projecting future populations

• Identifying implications

Demography and the Future

• Projections Vs Predictions

• Indicates what the population will be like given certain assumptions

• A partial window on the future

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

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

• 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• The mass market has been replaced by segmented markets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

Demography and Markets

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

“Over the next couple of decades nothing will impact OECD economies more profoundly than demographic trends and, chief among them, ageing”

Jean-Philippe CotisChief Economist, OECDMarch 2005

Labour Force Age Groups and Dependency Rates

Source: World Bank, 2006

Contemporary Population Growth Rates (% pa) Source: ESCAP 2009; Population Reference Bureau 2008 and 2009; ABS 2010;

Statistics New Zealand

Country/Region Year Rate Per Annum

World 2008-09 1.2

LDCs 2008-09 1.8

MDCs 2008-09 0.4

Europe and the New Independent States 2008-09 0.3

North America 2008-09 0.9

ESCAP Region 2008-09 1.0

Indonesia 2008-09 1.1

Australia 2008-09 2.1

Australia 2009-10* 1.8

New Zealand 2009-10** 1.2

* Year ending 31 March 2010

** Year ending 30 June 2010.

ABS Projections of the Population of Australia, 2005 and 2008

Source: ABS Estimated Resident Population data and Projections 2008

ABS 2005 ABS 2008

2006 Actual 20.7 20.72007 Actual 21.0 21.02021 Projected 23.9 25.62051 Projected 28.0 34.2

Australia

Series B

Structural Ageing:Australia: Change by Age: 2006 – 2021; 2031 (Series B)

Source: ABS 2008 Projections

0

20

40

60

80

100

120

140

160

180

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80

85+

Age

Per

cen

tag

e C

han

ge 2006-2021 (25.6 m)

2006-2031 (28.8 m)

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

Wittert 2006

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

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

The 3Ps of Growth in Real GDP Per Person

Source: Swan 2010, p.xiii

The Fourth P: Preparation

• At individual and household levels• Community and provincial levels• National level

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

The New Paradigm of International Migration (cont.)

•The Pacific Challenge•Changing balance between Gateway Cities and Regions•Emigration and the Diaspora•Environment and Migration

Top Immigration Countriesa, 2010 percentage of population

Source: World Bank, 2011

Top Emigration Countriesa, 2010 percentage of population

Source: World Bank, 2011

Global Skilled Migration

Twin Drivers• Demographic differentials• The war for talent – increasing demand for

human capital

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

USA: 8.7 million – 2.7 percent of national population

Australia: 900,000 – 4.3 percent of national population

New Zealand: 850,000 – 21.9 percent of national population

Philippines: 7.5 million – 9.0 percent of national population

India: 20 million – 1.9 percent of national population

Pakistan: 4 million – 2.8 percent of national population

China: 30 to 40 million – 2.9 percent of national population

Japan: 873,641 – 0.7 percent of national population

South Korea: 6.4 million – 13.2 percent of national population

Vietnam: 2.6 million – 3.2 percent of national population

Mexico: 19 million* – 19 percent of national population

Singapore: 100-150,000 – 3.5 percent of national population

Cook Islands: 52,600 – 34 percent of national population

Niue: 5,884 – 294.2 percent of national population

Tokelau: 2,019 – 138.5 percent of national population

Samoa: 78,253 – 44.5 percent of national population

Fiji: 128,284 – 15.8 percent of national population

Italy: 29 million – 49.4 percent of national population

* Mexican diaspora in the US

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

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

The Climate Challenge

• Environment and Population• Internal Population Distribution• International Dimensions – the Pacific

The Population Dilemma in Australia

• The need for growth – increased demand for workers and replacement task for baby boomers

• The constraints of environment

The Role of Policy

• Anticipating shifts in population and preparing for them

• Developing policy to intervene to influence population change

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?

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

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