New Zealand is already feeling the effects of an oncoming wave of economic and demographic change. Over the next 30 years our main centres and areas close by will continue to grow, albeit with ageing populations. Professor Natalie Jackson’s demographic forecasting work also shows that for the remainder of the country, the populations of 44 out of 67 Territorial Authorities will either stop growing or start to decline. If we do not attend to this divergence of economic and demographic outcomes, we risk opening the door to broader societal division between people and communities in growing areas and those in stagnation or decline.

Alongside this longer-term risk of social divergence the ongoing economic and demographic change will bring about two simultaneous problems. Growing areas, especially Auckland, will increasingly struggle to cope with their infrastructure needs. At the same time stagnating or declining areas will struggle to maintain local services and their ageing infrastructure. There will be a need to ensure that areas of growth grow well but also to ensure that growth and opportunities remain wherever possible for those who live away from our urban centres.

Unfortunately, the present official regional development policy primarily focuses on economic growth as the only way forward for all regions and small towns. The Government’s Business Growth Agenda (BGA) is a key part of this growth strategy. A key component of the BGA is the Regional Growth Programme, with its bespoke spatial or place based regional development interventions. We argue, based on the work of Professor Philip Macann, that the inherent risks of place-based regional interventions can be minimised if they are implemented along best practice guidelines. However, when it comes to best practice, New Zealand’s current implementation fails on three counts.

Failures

1. The goals of regional development policy are not clearly and explicitly articulated and include vague statements like “supporting the quality of life” instead of explicit regional wellbeing indicators.
2. The goals of regional development policy are not ranked with tensions, trade-offs, or subservient relationships between the goals explicitly outlined and prioritised so as to enable evaluation.
3. The goals of regional development are solely focused on maximising growth.

Recommended “Rethinks”

We therefore recommend three key “rethinks” of current regional development policy:

1. All regional development goals must be explicitly and clearly stated to enable clarity, transparency, scrutiny and co-ordination. As part of this “regional wellbeing indicators” should be explicitly developed and included in these regional development goals.
2. Regional development goals need to be ranked and prioritised with tensions, trade-offs, or the subservient relationships between the goals explicitly outlined and prioritised so as to enable evaluation.
3. New Zealand needs to rethink its sole focus on economic growth, shifting to a framework that also empowers communities to meet both the economic and social needs of their populations in the midst of “no growth or even decline.”

Options

In considering how to empower communities to meet the oncoming wave of change we relied on the taxonomy of Rachel McMillan and considered three options.

Option A: “Do nothing” – let the market work
Option B: “Counteract” – growth should remain centre stage
Option C: “Accept” – adapt to the broad forces at play.

We recommend Option C as it not only continues to focus on maximising the growth potential of regions but it also explicitly “accepts” the forces of population ageing, stagnation, and decline and their consequent spatial implications. As such, it aims not only to maximise growth but also to manage the rate of decline and the wellbeing implications of this decline where possible. As part of this it enables an exploration of exit strategies for communities in terminal decline.3 This can be broadly defined as a “smart growth” and “smart decline” strategy.

Recommendations for further research

1. the role of second tier “areas” as a way of understanding growth beyond Auckland and Christchurch. This would include an analysis of economic complementarities within these wider regional areas;
2. the role of multi-level governance as a way of finding new and innovative regional solutions based on modern spatial theory and subsidiarity. This would include exploring ways to fund multi-level governance arrangements to enable both inter-regional co-operation and new regional development pathways to be explored;
3. ways to unlock the economic opportunities afforded by the demographic profile of Māori and Pacific communities; and
4. spatial innovation policy options (beyond regional research institutes) including smart specialisation, as a way of overcoming non-spatial innovation policy capture by the main urban centres and further linking innovation policy into the primary base of the country.

When considering the long term nature of these economic and demographic changes, one might draw a parallel to the significant social pain resulting from the reforms of the 1980s. Had we known of the social dislocation and economic disruption that would be experienced by many New Zealanders as a result of the reforms, would we, many years before, have planned a nuanced and incremental approach to managing change instead? When it comes to the long-term trends and forces discussed in this paper, we have opportunities to start planning and making changes now.

It should be made clear to every voter. Each election that passes without a renewed regional development paradigm, one with clear and transparent and prioritised goals that look beyond the next ten years, is an opportunity lost.

The long-term economic trends and demographic issues facing the regions will become confronting and may seem overwhelming the longer we continue to ignore them. Real spatial solutions will be difficult to unmask and, at times, potentially politically unpopular. Given the risks and costs associated with spatial policy, the effective measurement and evaluation of these solutions will be essential.

Despite these difficulties, this is far better than the expensive waste of “bridges to nowhere” or simply ignoring the problem. The wave of change is coming. We can ignore it and let our country be overwhelmed, or we can face the challenges and try to steer a course together.