Bernard Hickey looks at what depopulation means for New Zealand's regions, and eventually the global economy

Bernard Hickey looks at what depopulation means for New Zealand's regions, and eventually the global economy

By Bernard Hickey

We've all heard and thought about what 'Peak Oil' might mean for the global environment and our economy.

We can understand the idea that resources such as fossil fuels or rare earths or clean water could 'run out' and restrict our ability to grow and consume.

But what would 'Peak People' mean?

New Zealand hasn't had to think much about depopulation before.

New Zealand's population has grown relatively strongly in recent years. We could easily grow by 1% from net migration alone this year and we have a high birth rate and young population when compared to many parts of Western and Southern Europe, and Japan.

We have gotten used collectively to a never-ending growth bandwagon.

Young, growing populations need feeding, housing, educating and pairing off. They are economic growth machines.

But it becomes much harder when populations start getting older, and ultimately, start falling.

Japan's economy has been in a multi-decade slump since the early 1990s, largely due to its first ageing and now falling population. Its birthrate collapsed from just over the replacement rate of 2.1 in the early 1970s to 1.3 in 2005. Japan's population stopped growing in the early 1990s and has now started falling because it also allows very little migration.

It's no coincidence that its economy contracted over the last 20 years and it endured chronic deflation that it is only now addressing with massive money printing.

Look a little closer at Japan and the problem of depopulation is even more corrosive. Its population is forecast to fall 30% by 2060.

Councils in rural areas of Japan are already closing bridges and roads that they can no longer afford to maintain as their base of ratepayers either leave, or can't afford the rates.

This is a spectre now facing some district and town councils in remoter areas of New Zealand.

This week's Royal Society report on the implications of the latest census made that clear.

"Some territorial local authorities will have increasing difficulty in maintaining service levels for an ageing and possibly dwindling population, not to mention burgeoning numbers of visitors and tourists," it said.

NZIER Economist Shamubeel Eaqub has also talked about the issue of "zombie towns" in regional New Zealand.

Councils will have to make difficult decisions to return tarseal roads to gravel roads, to turn off town water supplies and to let parks return to bush.

They will have to keep ramping up rates to a falling base of ratepayers, while also paying for facilities for more visitors.

That may force them to levy more visitor charges.

Anyone buying property in places such as Wanganui, Gisborne, Whangarei and Greymouth should have a good look at their area's population projections before they plonk down their deposits on houses or office buildings and gear themselves up to a depreciating asset.

There are no easy solutions, but depopulation will increasingly become a topic for town planners, investors, real estate agents, economists, home buyers and voters.

In the even longer run it will something to think about globally.

The UN's Population Division said this week that 2014 looks like being the year for 'Peak Births' in the world with 139 million.

The global population may start falling as early as 2070.

Our economies would then have to find other new ways to grow.


A version of this article first appeared in the Herald on Sunday. It is here with permission.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.


Comment Filter

Highlight new comments in the last hr(s).

Bernard : If you look up the United Nation's World Prospects report 2004 , you'll quickly realize that New Zealand is a comparativley underpopulated country , ranked 202 out of 241 , with just 16 people per square kilometre ... alongside Paraguay and Finland ...
... way up at 120'th spot , half way along the list , Cambodia has 81 citizens/km sq. ...
Japan , is up in 38'th spot with 337 folks per sq km .... 20 times NZ's population density ... .. even if Japan depopulates by 30 % , they'll only fall to 56 'th place , circa 229/km sq , next to where the Germans are today ...
We got an awful long way to go before Godzone need to worry about depopulating , and zombie towns ...
... when the prices get cheap enough , those backwaters will fill up with lifestylers , artists , tele-commuters ..

UN report on global population does not comment on NZ rural and its farcical.
Funny how you denigrate Govns and the UN yet use thier work/output blindly when it suits your point of view.
The UN's projections are of course way wrong, 50 years from now there wont be fossil fuels, ergo far less to eat, ergo far less people.

The dark art of deception
New Zealand's density of 17 people per sq/km is derived by using the absolute land mass of new zealand divided into the total population, including areas that are un-occupiable ie Southern Alps, Remarkables, Kaikouras, and various other mountains ranges in the South Island, and the desert region and other mountain-goat areas of the North Island
Auckland's Urban Area has a population density of 253 per sq/km using 2010 data

... it could be argued that Switzerland has an " uninhabitable " area greater than NZ , in % of total land area , yet they average 188 Swiss citizens/km sq .... 10 times NZ's population density ....
And based on your figgers , Japan as a whole country has a far greater population density than our Auckland city ....
... even though Japan , too , has large tracts of uninhabitable land ...
As do most countries ... few nations are habitable 100 % from north to south , east to west ...

The Netherlands is 41,000sqkm and is only 80% land (most of the time), the rest is water. It has nearly 17 million people. Canterbury is 45,000 sqkm and almost all land (sometimes too much of it being pressed into mountains but mostly nice flat land) and it has nearly 600,000 people.
The defining thing about NZ is its low population density compared to most other places. Small changes in density (depopulation) in NZ or overseas will not change this fact.

Japan sure has large tracts of uninhabitable land - it is 2/3 forest...

The hand wringing chicken littles have no concept of how big the planet is.

Net farmland has been static for the past five years as more is done with less.

Europe is doing a good depopulation experiment now chasing green dreams with high energy price policy...

Europe Risks Losing 30 Million Jobs to U.S. Shale Boom.

Acually, no, you have no idea how small the planet is and no intention of even looking.
When oil is $150US a barrel the cost was a mega recession, and un-employment as bad as the Great Depressionm that's a pretty high price to pay, too high.
More with less sure we throw more fertilizers and more water, this costs more and more energy to do.
California, china both have to go deep for water and it costs them a small fortune, to the point of being un-economic.
Here, it is explained very well,

Have a read up on zero tillage and precision agriculture. Doing more with less fertiliser and less fuel and all that.

If California nimby's and anti developmentists had allowed water storage to grow at the same rate as population growth I might have some sympathy for them.

and its water use? 
oh and um,

No-till requires a higher level of management in a range of areas. It is likely that the time spentfarming will reduce with no-till; however timeliness is the most critical factor, especially with regards to weed control. Spraying must be done when weeds are small and fresh; otherwis efailures are likely –in comparison to waiting for more weed flushes before cultivation."


and look at that machinery, less deisel? no not really.  maybe less water, maybe...however going deeper and deeper to get water is costing more and more. So lets say 20% less water, that buys a few years more at best.

Steven - where to begin? You saw a picture of a tractor and concluded there would be no fuel savings? Or did you put some more analysis. Still need to use tractors but less passes so around about 40% fuel saving.
Not to mention less nitrate leaching, increased soil carbon, soil fauna, 90% less erosion, less, same day harvest/plant  etc. etc.
Water use - what was your analysis there? Why do you even comment? Do you comment here full time on behalf of the luddites collective?

"An improvement in soil porosity, increases water use efficiency, by improving water
infiltration, decreasing runoff and evaporation losses, and improving the water retention."


I found increasing organic matter and biological activity gave the greatest boost to water and nutrient use.  Good retention and protection in dry conditions, better resistance and recovery to pugging in wet, and nutrients tended to be suspended comparatively more than lower organic and biological soils in both wet and dry.

While breaking the soil and or aerating it seemed to do ok, most of the time with out the sponge effects of good organics the water tended not to stay around anyway, or if it did, it went stagnant.

Oh and chinese farmers are moving back to traditional dry farming techniques because the cost of pumping water outweighs the gains in food production.

"Councils in rural areas of Japan are already closing bridges and roads that they can no longer afford to maintain as their base of ratepayers either leave, or can't afford the rates."
Coming to us...
All of its involves oil, from making them, to maintaining them to the vehicles on them.
When oil is gone and by 2050 that is the case, what then?

That and making consumable-mentality infrastructure, under the belief that infinite growth potential will always be present.

If they'd concentrating on making the main feeds resilient and lowest maintenance as a strategic initiative, then have shrinking population isn't a problem.

That's what I was trying to get through to Phil Best the other day.  councils (and businesses) have to invest to make _core_ infrastructure as cost free, as maintenance free, as possible - and not act like there will be an infinite number of tomorrow payers to keep funding it.

Because whether it's peak oil, peak people, or some other thing, change is certain, and if there's increase then sometime there -will- be decrease.   so best prep for the decrease when surplus is available

Yep, core infrastructure totally agree.  The victorians could make water wheels that would last 100years, we can do that and better. There is no real reason to make goods with  a planned obsolesence except to keep generating income as that is what is needed for the growing population. That of course in effect assumes a flat earth and infinite cheap resources. once the true cost of the inputs is recognised, then there will be a paradgym shift.
IMHO Phil Best etc are locked into the growth for ever mantra because their political beliefs can only be supported in a world of growth/excess.
"prep" yes very PDK.

Given that it has been estimated that for all to enjoy the rough equivalent of a European lifestyle, there is only enough resource in the world for about 3 billion of us, we have a long way to go yet.
Funny how when we had a lot less people that small areas thrived then isn't it? It would appear that smaller populations are not the problem.
So what is?
I think it is big business, and economies of scale and mechanisation and all of things that put people out of jobs. All of those things rely on a growing population, so get rid of things that need growth and I reckon you won't need it anymore.
Bring it on, so that we CAN have a world with clean rivers and space for other species that make our lives much richer. All huddled together in high rise tenement slums most certainly does not

its just a factor of overheads.

Overload the system with overheads, then marginal areas will die first, populations shrinking, as their "nutrients" are wasted away.

Higher density suffers the same wastage, but the death rate (move away rate) is just **temporarily** hiding by the reproduction/migration rate.   Those in the higher density planning don't see the problem because if they didn't have the incoming population they'd be worse off, but if they didn't have the leaving rate as well then there would be no way for them to keep up with the resulting expansion rate.  Because the Net rate is manageable they're as happy as a pig in muck, and have no reason to seek change or ask tough questions.

It is already very difficult to raise a family in auckland. On one income, dropping kids off at school, maintaining a household.

Always going to be plenty of demand for secondary cities, esp with immigrants still flowing in

the immigrants will just making things more difficult.  They don't fit the normal curves, making it more costly for them to participate in the community and culture.  So a little immigration to keep things fresh is good, but it has to be kept small otherwise you'll damage the local system

Regional wage earners also have the penalty of paying high interest rates on their mortgages because the RBNZ is trying to suppress Auckland house prices by hiking interest rates.  Why should provincial house owners pay the Auckland penalty?

This has been going on for years and needs to change.

As well as the huge waste of assets and infrastructure it's very sad to see a lot of our once thriving towns struggling. I really think it is sensible to put some serious resources into turning things around. We also are exposing the whole economy to greater risk if it is dependant on just one big centre - a stonking great volcanoe in Auckland for example.
The idea of encouraging young immigrants to the regions is a good one - there's heaps of solid business opportunities and jobs. It's not all about hi tech. Tourism, horticulture, forests, fishing etc. all need workers and would be a benefit to us all. I'm sure there's heaps of good people in the world that would leap at the chance if we had a scheme like the one after WW1. Give them a kick start, make a go of it after five years and you get to keep it and stay.

if those solid business opportunities and jobs were there the people would be moving there.

If you're going to give anyone kickstarts, give it to those who have weathered things so far and heldf on, and to those who are willing to move out of the volcano.

Schemes like WW1 and the earlier immigration = free land deals all involved dumboot developers, they would come, get their land, then have to break it in.  that kind of free resource isn't viable in todays' markets.

Thing is, tourism, horticulture, forests and fishing all pay really badly, and much of it is hard work.  Not many people are interested in that, and with the way the power and money is focused in the volcano, they're going to destroy their feeders systems... not amount of forcing poor immigrants into regions will fix that, who is going to hire them?

Thankfully there are people that are not afraid of a bit of hard work and poor pay if it means they can create a better future for themselves. Look at what the new settlers in Israel achieved. Maybe that would be a good place to start looking for candidates. My children have friends from South America that would fit that critreria as well. Your modern urban youf probably not. 
Sadly you are probably right about the viability in todays world. We've allowed our Governments, Big Business and debt based money system to push us into excessive complexity and create huge barriers to entry. It's like we can't go back to a more human scale, self reliant system even if we wanted to. That's a mega problem.
Our system must either expand to infinity (and beyond) or collapse completely. Could be that what we are seeing in our regional towns is so disturbing because, sooner or later, it is our collective future.

I'm working on solutions, but to be honest the interest hikes from the RBNZ are killing me.
Improvements cost money, more than can be covered with retained earnings, and the resulting rise in exchange rate is killing my export earnings, as well as lifting all my costs.

settlers in Israel?... what the ones in the Gaza strip.west bank?  Or was that Palestinian settlers?   They do the same as the Popes used to do for the Crusaders, they issue them someone elses land, and the victor gets to claim their valid title (and pay taxes to their "benefactor/sponsor")

Oh, it isn't just Japan, BH.  Take a gander at This, and tell me that NZ is not actually wonderfully placed...
The larger question is:  what styles of politics, representation etc wiol survive the Great Unpopulating of the Western world?
And even larger, will it be better or........

Cool, hope property prices totally crash soon then a lot of us can buy cosy cottages, grow orchards, vege gardens, go fishing and enjoy dirt cheap plentiful power from super efficient cheap solar panels and advanced battery tech.
Good bye to debt serf rat race working for the Man to fund his souless Omaha bach boat and BMW lifestyle.

"The global population may start falling as early as 2070."
Good one, Bernard. So at least you and I will not have to worry about it, presumably. 
Overall, there are way to many homo sapiens on this planet. A significant reduction in human population would be a great outcome for the quality of human life on this planet as it would mean return to sustainability. 
Of course, this would also mean to let go of beloved mantras on growth, bubble economics, debt orgies, consumerism and generally an end to many kinds of irresponsible behaviours. I wonder whether the "principal economists" of this world have the intellectual bandwidth to imagine such a change rather than wreck the world with wet fantasies of turing every corner of the world into an India or China, populationwise.

Agree, but more like 2030 than 2070.  By 2050 fossil fuels will effectively be gone and we use a huge amount to make food.

I sometimes wonder if these time frames are chosen very carefully as pretty much no-one capable of reading them and comprehending what that could mean is going to be alive then, so, business as usual, nothing to see here, move along folks.
The planet absolutely cannot wait for another 50 or so years for us to get our sh... together to sort out the damage that we've done it. We have enough now, and the very worst of it in very recent times. 
It will have to stop and we either get our heads around that it must and move in an orderly fashion toward it or we carry on as usual, lining the pockets of the corporate giants until the inevitable happens.
Which do you want to happen?

This article talks about the effect of depopulation on overall GDP growth. A slump seems like a likely result with depopulation. No surprises - but who cares? What is the effect on GDP per capita? Isn't that what matters?
The article also seems to blend depopulation with people moving from rural areas into town. You need to separate the issues.

Reducing population.  There are great advantages.
Think of the rail loop.  We all know Aucklanders are too broke to afford it.  And soon they won't need it.  Win win.

"councils (and businesses) have to invest to make _core_ infrastructure as cost free, as maintenance free, as possible - and not act like there will be an infinite number of tomorrow payers to keep funding it."
When will they replace our bitumen roads with concrete?  The USA has already found concrete to be more economic and have far less maintenance issues.  The bitumen formerly used is put into cockers to refine upwards.

That should be cokers, not cockers.