Migration flatters economic growth
A booming Kiwifruit industry made Bay of Plenty the fastest growing part of the country, while plunging oil and dairy prices saw Taranaki’s economic output record a remarkable plunge.
Meanwhile, although Auckland’s population is booming, the amount New Zealand’s largest city is producing per person is growing, but not nearly as fast as other regions over the past three, or seven years.
Figures released by Statistics New Zealand yesterday reveal the relative speed with which New Zealand’s regions grew in the year to March 31, 2016.
Although at a nationwide level more recent growth figures are available, Statistics NZ publishes regional breakdowns a year after the period the figures refer to.
Across New Zealand, economic output (gross domestic product) on a per person basis grew at 2 per cent in 12 months.
Some regions were booming, while three were in decline.
Bay of Plenty recorded the biggest gain in overall terms, as well as on a per person basis, growing 5.6 per cent to $44,997.
Taranaki’s per person GDP remains the highest in the country, despite its output per person plunging 9.3 per cent, from $78,625 to $71,297.
As well as falling dairy prices, Taranaki – the home of New Zealand’s oil and gas sector – was hit by a sharp fall in global oil prices in 2015 and 2016, which resulted in a large number of projects in the sector being cancelled.
Despite the fall, Taranaki’s output was almost twice as much per person as Northland ($36,531) and Gisborne $36,955). Wellington had the second largest output per person at $67,888, followed by Auckland at $58,717.
The figures reveal the extent to which population growth is flattering New Zealand’s economic growth figures, with record net migration driving population growth to a 40-year high.
In a press release, Statistics NZ heralded Auckland’s growth at 6 per cent and 4.1 per cent across New Zealand.
However, on a per person basis, Auckland grew at 3.1 per cent while the national figure was 2 per cent.
Overall 12 regions expanded in the year to March 31, 2016, while Taranaki, Southland and the West Coast contracted. It was the second year in a row that the Taranaki, West Coast and Southland economies contracted.
The figures also show which parts of the country have outperformed the others over a longer time period. While Auckland’s population is booming, its output is closer to the middle of the pack.
A wind-down in the Christchurch rebuild meant that Canterbury’s economy grew by just 1.2 per cent on a per person basis in the year to March 31, 2016.
But over the seven years since 2009, Canterbury has been the strongest growing region by some margin, growing 33.48 per cent, followed by Marlborough and Bay of Plenty.
Since 2009 all parts of the country have grown apart from Taranaki, where output per person is down 9.64 per cent.
Since 2013 Marlborough was streaks ahead, expanding 16.38 per cent in three years, followed by Canterbury (12.7 per cent) and Northland (12.46 per cent). OPINION: The business community has been concerned about the Resource Management Act (RMA) for a long time.
Anyone wanting to grow a business, build a building or install some infrastructure will at some stage need a consent from local government, working under the rules of the RMA.
Unfortunately those rules are not working – for communities, the environment or our development needs.
Some of our most pressing problems – housing shortages, high house prices, costly business expansion, congested roads and lack of good infrastructure – stem largely from the RMA.
This is because planning regulations developed by local government under the RMA have in many cases become overly complicated and difficult, constraining business growth.
A good example is the urban boundary around Auckland. Planners working under RMA rules have decreed development may take place only inside an artificial boundary around Auckland’s squeezed isthmus area. This has pushed up the price of houses and sections inside the boundary, making them unaffordable for many.
Another example is the kind of district plan now operating in many cities and towns that dictates what you may or may not do with your own property – rules requiring sitting rooms to face the street, fences of a certain height or approved colours for letterboxes.
The RMA does not direct planners to restrict boundaries and impose trivial conditions, but it allows them to. And that’s how we become over-regulated.
This week the Productivity Commission said it was time to replace the RMA. It has analysed the problems caused by the act and
Wellington had the second largest output per person at $67,888. A new act with separate objectives and principles for the natural and built environments would be a great improvement.
concluded that we could do much better.
The commission has made recommendations for a replacement act. First, it suggests separate objectives for the natural and the built environment – a good recommendation.
The natural environment needs protection. We want planning laws to protect the water, soil, air and vegetation in the natural environment where appropriate.
The built environment, on the other hand, needs enablement. Here we want business, housing and infrastructure development to be enabled (of course within appropriate environmental standards).
Under the RMA, a big problem is the protective – not enabling – approach being applied to the built environment. A protective approach to the built environment simply leads to more and more restrictions being placed on development, as we have seen.
A new act with separate objectives and principles for the natural and built environments would be a great improvement.
Another significant recommendation is for clearer wording. Many of the problems evident in cities today have arisen because of broad, unclear wording in the RMA that allows planners to regulate or over-regulate as they see fit, within their own understanding of what the RMA requires.
The commission recommends a new act should have clearly defined objectives to give planners clearer parameters to work within. In a new act, the objectives should also be appropriately circumscribed.
Under the RMA local government has a broad mandate – for example, to enable everyone’s ‘‘social, economic, and cultural well-being and health and safety’’.
More narrow objectives, focused on local government’s core responsibilities, would be welcome, especially by communities wanting better infrastructure.
These are just the basic recommendations made by the commission for replacing the RMA – there are many others covering planning, housing, infrastructure and the environment.
It will be a significant undertaking to write a new act because of the wide range of matters involved. Other acts will need amending as part of the process, including the Local Government Act and Land Transport Act.
But it is a job that is much needed and shouldn’t wait any longer.
Let’s hope the Government heeds the commission’s recommendations and moves quickly to replace the RMA. Kirk Hope is the chief executive of BusinessNZ.