TL;DR: Population growth from immigration of temporary workers to replace and supplement emigrating local workers rose to more than 2% in the last year, without nearly enough infrastructure built or planned for two decades at that level, and without any real debate just days before an election.
Meanwhile, the last polls before Saturday’s election showed a last minute rise in support for the Labour-Green bloc at the expense of National-ACT mostly, but with the centre-right still ahead by enough to win (just), with the support of New Zealand First Leader Winston Peters.
Elsewhere in the news this morning:
Auckland Council estimated it will have to replace 1,200 kms of water pipes at a cost of $200 million in the wake of a 13-metre sinkhole opening up in Parnell and allowing millions of litres of sewage to flow untreated into the Hauraki Gulf RNZ;
A landmark Ministry for the Environment and Stats NZ report forecast an increasing number of increasingly extreme climate events like Cyclone Gabrielle, which caused up to $18.5 billion in un-forecast and unfunded damage to private and public assets; and,
Upper Hutt Council, which does not charge for water, revealed it loses 52% of its water to leaks daily because of decades of underfunding, meaning it faces water shortages this summer after one of the wettest years on record, while the wider Wellington region faces $2 billion of unfunded future investment The Post-$$$1.
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Fast population growth without enough building or debate
The big news of the last 24 hours across the motu happened without much fanfare or notice, let alone any debate three days before an election about how we manage our futures.
Stats NZ reported yesterday net migration in the year to the end of August was 110,200, including emigration of 68,500 citizens and immigration of 199,500 non-New Zealand citizens. Confirmed quarterly numbers showing migration to and from Australia to the end of March show about 300 New Zealanders are leaving permanently each day, and are being replaced by about 650 mostly temporary migrants each day.
Our churn and burn economy is represented by one plane-load of New Zealanders flying out each day, who are then replaced and supplemented daily by two plane-loads of mostly temporary work visa holders, backpackers and students with work rights.
Aotearoa’s population grew by more than 2% in the last year because of record-high net migration of temporary workers, but we did it with:
an existing $100 billion infrastructure deficit that is costing countless years of lost productivity and not-so-quietly creating tens of billions of dollars worth unaccounted-for public liabilities in climate, health, justice, health and welfare costs;
another $100 billion of missing future investment without new congestion, pollution and water charges; and,
a low tax and low public and private investment framework designed for less than 0.5% population growth.
‘If I don’t know or aren’t asked then it’s not a problem is it?’
Our political leaders and (let’s face it) voters accidentally-on-purpose engineered and accepted this population growth without nearly enough infrastructure and without any real debate. That’s because having the debate would force us to confront the magical thinking underpinning the assumptions currently framing our political economy, which are:
the temporary migrants are needed to solve a temporary work shortage problem, and therefore we don’t have to build infrastructure for them, or at a high-enough rate to cope with 1.5-2.0% population growth, which is what we’ve actually had for the last two decades;
and we’ll shortly go back to population growth of less than 0.5% a year, which means we don’t have to make a decision about how to pay for the $200 billion worth infrastructure spending and/or demand management taxes such as congestion, pollution and water charges; and,
that allows us to continue believing that we can continue to demand income tax cuts and keep the size of Government below 30% while also not taxing capital gains on residential land and believing the audited Crown accounts fairly reflect our future climate, health, education, welfare and justice liabilities.
‘So what do you want? Hello? Are you listening?’
I regularly ask politicians at Government and council level, along with planners, financiers, builders and strategists, what level of population growth they want or think we’ll have, and therefore what we should plan and tax for. They tell me they either don’t know, can’t forecast it, or simply look at me blankly and then grin sheepishly.
They all know we should be talking openly and clearly about what this sort of sustained population growth of 1.5-2.0% should mean for our infrastructure investment, tax rates and congestion/pollution/water charges. But they feel they can’t without being accused by their opponents of putting up taxes and public debt for wasteful spending, which would ensure they can’t get re-elected or appointed.
The tragedy of the horizon is also our tragedy of the commons.
Links to news, views, papers, reports, data et al elsewhere
Top five in Aotearoa’s political economy this morning
Jenna Lynch: How National's tax plan and Winston Peters strategy have blown up in their face. Newshub
Claire Trevett: The polls should be giving the National Party the night terrors NZ Herald-$$$
The Price of Peters - $10b spending cuts in first year, $20b spending increases NZ Herald-$$$ Thomas Coughlan
National, Act and NZ First are most likely to govern, but what might that look like? NZ Herald-$$$ Derek Cheng
Only half of the RBNZ’s rate hikes have been passed on to depositers Reserve Bank of Australia speech
In housing, transport and infrastructure
Neighbour wants Kāinga Ora to help double glaze home if town houses built. The neighbour claims the two-storey Kāinga Ora building will block the sun into their "already cold” home. Local Democracy Reporting via 1News Maia Hart
How does a sinkhole get fixed? The pipe professionals solving Auckland's sinkhole situation Stuff Jonathan Killick
Parnell sinkhole, pipe failure to be examined in independent review RNZ Lucy Xia
West Auckland house earns more than $1300 a day. Developer scores $299,000 profit in just seven months with resale of New Lynn property. One Roof Catherine Smith
More than 20 MPs rent back their own homes at the taxpayer’s expense The Post-$$$ Andrea Vance
In climate, water and environment
On front line of climate change, Kapiti Council’s 6-5 vote for fossil fuel phase-out treaty The Post-$$$ Justin Wong
Use of weather derivatives surges as extreme climate events rock the globe Reuters
Australian Court Backs Coal Mine Expansions in Key Climate Case Bloomberg-$$$
In poverty, health, wealth, income and inequality
Father of teenager with cancer says travel allowance scheme a 'failure' RNZ Luka Forman
The first Rolls-Royce built just for two costs $10m-plus per seat AFR-$$$
In geopolitics
NATO to respond if Baltic Sea pipeline damage deliberate - alliance chief Reuters
Israel forms unity government as Hamas armed wing says still fighting outside Gaza Reuters
US may drop sanctions against Israeli billionaire in push for EV metals WSJ-gift
In global and local markets, economies and business
Exxon secures lead in top US oilfield with US$60 billion buy of shale rival Pioneer Reuters
OECD agrees global treaty targeting tax from digital giants FT-$$$
China Budget Revision Would Mark ‘Sea Change’ in Fiscal Strategy Bloomberg-$$$
Martin Wolf: The global economy is resilient but limping FT-gift
Chart of the day
Where GDP success equals wellbeing failure: the United States
Substack of the day
Pic of the day
Cartoon of the day
It’s the crossing of the knees that catches the mood
Ka kite ano
Bernard
Upper Hutt’s Mayor Wayne Guppy, who has presided over the under-investment as Mayor for 21 years, said he did not believe the figures provided by Wellington Water officials.
Thursday’s Chorus: Record population growth without enough building or any real debate