This is the third in a series of posts based on the Campaign for Better Transport’s submission to the Puhoi to Warkworth Board of Inquiry. The full presentation is over at bettertransport.org.nz
Previously I pointed out that the NZTA produced Traffic Assessment Report hasn’t factored in a toll for the Puhoi to North Warkworth Toll Road (PNWTR), thus overstating expected volumes on the proposed route. Before that I made the case that traffic growth assumptions for the corridor aren’t based on current trends, and that the forecast number of trips “further north” was overstated in the report to the Board of Inquiry.
In this post I examine NZTA’s forecast growth in traffic for the Matakana region and Warkworth. Matakana Road is the route to the Omaha, Leigh, Goat Island and numerous other coastal destinations. These destinations are very popular during weekends and holiday periods.
Here’s the 2009 Base Case traffic counts taken from figure 11 of the report:
Base Case 2009 AADT volumes
And here are the 2026 traffic volumes predicted by NZTA’s model:
2026 AADT Volumes
As you can see, the model predicts Matakana traffic volumes to increase by only 500 for the Base Case in 2026, and by 700 for the Project Case.
In my view this is highly unlikely. The model even predicts south bound traffic volumes to decrease by 20 trips a day for the “Holiday End” periods for the Base Case, and remain the same for the Project Case. In my experience, the ends of long weekends and holidays are the busiest times on Matakana Road. The implied growth of 0.3% per annum in AADT traffic volumes does not make sense, especially when you consider the number of new dwellings that will probably be built in the Matakana region in the next 17 years by 2026. If this is the same assumption used to model the Hill Street intersection, then delays are likely going to be far greater in reality than forecast.
It is even more odd when you compare the Matakana Road growth assumption with that used for Sandspit Road, which connects to Snell’s beach and the Mahurangi peninsula. Those figures work out to be a linear growth of 2.9% for the Base Case and 3.0% for the Project Case, which is more in line with what one would expect.
The land use assumptions are on pages 8, 13 and 14 of the report. For the Base Case and Project Case, this includes land-use changes (growth) in Warkworth. For the Project Case, the following adjustment was made:
So even though it isn’t in the Warkworth Structure Plan (or the Unitary Plan?), the growth has been modelled to take place near the northern junction of the PNWTR. To the author’s credit there was a sensitivity test done on this assumption:
So 20% more traffic on the existing SH1 for the more likely growth scenario, than shown in the main body of the report! So instead of 14,500 veh/day, traffic volumes on the existing SH1 are more likely 17,300. And presumably 2,800 veh/day less on the toll road. No wonder it is buried at the end of the report.
My next post will cover one final traffic modelling issue, before moving on to the topics of economics, safety and consideration of alternative routes.
There are many great contradictions in politics, and there’s never enough time to explain them all. Certainly one of the greatest contradictions, though, has to be what some people associated with the ACT party have to say about intensification. The supposed ‘free market party’ seems quite scared of landowners’ rights to develop their land in the way they see fit – something you’d think would be more likely from the Conservative party.
Quoting a recent speech by David Seymour, the new ACT candidate for Epsom:
The people of Epsom do not want more traffic jams and a city closing in on them under Len Brown’s intensification plan.The funny thing about Epsom is that it was built well before modern urban planning. Nobody planned the organic mix of streets between Mt Eden and Dominion roads. The character villas were not part of a grand plan. Ditto the crescents backing onto Cornwall Park, the historic Parnell Village, or roads that wind over the slopes of Remuera.
Len Brown and the central planners can’t stand the thought of a spontaneous urban form. They must make their mark with apartment towers all over the electorate.
If irony were made of strawberries, we’d all be drinking a lot of smoothies right now (thanks, South Park). One of the major barriers to intensification is the zoning restrictions in inner-city suburbs, and yet David is appealing to his audience’s fear of an “organic mix” or “spontaneous urban form” arising in Epsom. Perish the thought.
Dick Quax, former ACT parliamentarian turned councillor, is also a chap who spends quite a bit of time raising concerns about intensification.
Don Brash, former ACT Party leader, has also gotten a lot of mileage arguing that we should remove urban limits, and conspicuously ignoring the restrictions which exist inside those limits. When pushed, he points out that he doesn’t have a problem with intensification… but that’s certainly not the message he’s chosen to focus on publicly.
As some of the other bloggers have pointed out before, the usual left-wing/ right-wing divisions that occur at central government level seem to break down, or behave in unexpected ways, when you get to the local government level. And I’d call this is one of the unexpected ways.
People at the supposed ‘right wing’ end of the spectrum often go on about the need to remove planning restrictions at the city’s edge, and how that will help housing affordability. They sing a different tune when confronted about restrictions inside the city boundaries. This ranges from the kind of rhetoric used by David Seymour above, to the more nuanced views held by Don Brash (but which he certainly isn’t at pains to publicise).
And yet, when urban economist Edward Glaeser was asked which the bigger problem for Auckland housing affordability was – urban limits or zoning restrictions in existing areas – he pointed the finger at zoning restrictions. Hmmm.
On the other hand, Penny Webster, another Auckland Councillor and former MP for ACT, has tended to vote with Len Brown on most issues, so it’s dangerous to generalise between different people. The general impression that we get from people most closely (and most currently) associated with the ACT party itself, though, is that intensification is a bogeyman to be feared, and – from David Seymour above – that it occurs because of council planning, not in spite of it. I leave it to you to consider whether, if we removed all planning restrictions in both the inner suburbs and at the city fringes, Epsom and Remuera would stay the same with no intensification occurring.
This is the second in a series of posts based on the Campaign for Better Transport’s submission to the Puhoi to Warkworth Board of Inquiry. The full presentation is over at bettertransport.org.nz
Yesterday I talked about the growth assumptions that lie behind NZTA’s traffic forecast for the Puhoi to North Warkworth Toll Road. (Because I think this a more accurate name for the project, I’m going to refer to it as the PNWTR).
In this post we are going to examine how NZTA have modelled the effect of the toll on projected traffic. The following chart is taken from the NZTA Traffic Assessment Report and shows predicted Annual Average Daily Traffic (AADT) volumes in both directions.
The two columns on the left indicate the expected change in traffic between 2009 and 2026 if the Base Case (“do nothing”) option is chosen. These are the same figures as the chart that appeared on yesterday’s post.
The three columns on the right are the predicted 2026 traffic volumes should the PNWTR proceed.
The 2026 PNWTR Corridor Total figure is higher than the 2026 Base Case figure because the authors of the report “assumed that the operation of the Project will increase growth rates in the study area [and therefore] we assumed that an extra 1% of traffic growth in the Project scenario is a reasonable approximation of the induced traffic effects of the Project” (p.13). In other words the 2026 PNWTR model has an underlying growth rate of 5.4%.
You can see from the chart that NZTA expect 13,700 veh/day on the PNWTR route, and volumes on the existing SH1 to be roughly the same as what they are today should the project proceed. ( As noted yesterday, I have yet to reconcile how the figure of 13,700 veh/day on the PNWTR with the 5,930 veh/day for trips “further north”.)
Obviously though the split of traffic will be dependent on the toll. The report doesn’t explicitly say what the assumption is on the toll tariff, but buried on p.59 is this:
Translated, (and later explicity clarified with NZTA) this means that travel on the PNWTR extension of the existing toll road is assumed to be free.
In reality, however, NZTA acknowledge that:
- The PNWTR road will be classified as a toll road
- No decision on the quantum of the toll has been made
- If a toll was applied to the Project, depending on the level of that toll there would likely be a reduction in traffic on the new project route and a corresponding increase in traffic on the existing state highway
It would be extraordinary to classify the road as a toll road and then not charge a toll for its use. It would seem prudent to do some scenario analysis to find out what the impacts on traffic volumes would be. The risk is that the PNWTR ends up being like one of Portugal’s Ghost Roads, while traffic volumes on the existing SH1 will be far greater than the NZTA modelling suggests.
As I said to the BOI:
The importance of a realistic forecast cannot be overstated. The proposed toll road will most likely be with us for hundreds of years, along with the significant environmental impacts that come with its construction and operation. A realistic forecast that has considered all relevant scenarios is vital, and it is worth spending some time and effort making sure we get it right.
I’ve run out of time, so I’ll cover off the forecast traffic volumes for Matakana in a future post, along with other shortcomings with NZTA’s forecasting, before moving on to the issues of economics, saftey and consideration of alternatives.
This is the first in a series of posts based on the Campaign for Better Transport’s submission to the Puhoi to Warkworth Board of Inquiry. The full presentation can be found over at bettertransport.org.nz
In this post we take a closer look at the Transportation and Traffic Assessment Report which the NZTA have supplied in support of their application for a $760m toll road from Puhoi to north Warkworth. In particular, we will examine the forecast traffic growth and volumes “further north”.
NZTA have modelled traffic growth at a rate of 4.4% per annum (straight line) until 2026. This is the forecast growth without the toll road, explained on p.27:
As you can see, NZTA claim that the 4.4% growth figure is “consistent with the growth rate observed over the last five years which has averaged 4.1%.”
Footnote 21 says the 4.1% figure is based on NZTA’s TMS count site south of McKinney Road, which is just south of central Warkworth. Looking at the data from the NZTA State Highway Traffic Volumes, a growth rate of 4% does indeed appear to be not a bad fit. The figures quoted are two way traffic counts.
However, the report does not explain why this particular count site has been chosen. Traffic counts at McKinney Road will reflect the growth of trips in and around Warkworth itself – trips that aren’t necessarily travelling long distances at all.
It would therefore make more sense to consider the number of vehicles that currently travel the whole distance from Puhoi to Wellsford and beyond every day, and vice versa – what I will refer to as “further north” trips. We can get an idea of the trend in this traffic by looking at Kaipara Flats road, which is just north of the northern junction of the project.
As you can see, this chart tells a very different story – no long term growth whatsoever for the period 2008 to 2012. Other traffic counters like the one at Waipu show a similar “flatline” trend.
But at this point we still don’t know what proportion of these trips are “further north”. I asked NZTA if they had modelled “further north” trips and it turns out they had, but hadn’t included it in the report.
The 2009 Base Case model comes out at just 4,460 trips a day. The 2026 Project model, 5 years after the project is complete, has 5,930 trips travelling to or from “further north”.
This seems like an astonishingly small number of trips for which to build a four lane toll road. NZTA claim that a number of toll road users will have origins or destinations in Warkworth and Matakana, despite the fact that it will be quicker to use the existing SH1.
NZTA originally provided a projected split of toll road traffic at the northern junction as 10,500 travelling to/from the north and 12,100 travelling to/from Warkworth, as shown in the following diagram:
However, along with supplying the “further north” figures, they have also supplied a new diagram for the toll road split, which looks like this:
Go figure. Apparently NZTA are no longer sure what the split in traffic will be. Without this, trying to get a handle on expected traffic flows becomes hard. If we know only 5,930 trips are travelling to / from “further north”, then this represents only 31% of the traffic north of Kaipara Flats (19,200). Where are all the other vehicles coming from, and what impact will the proposed toll road have on their travel times? I’m hoping NZTA will be providing the revised split of traffic or, ideally, the whole report will be subject to an independent review.
In the next post I will discuss NZTA’s forecast traffic volumes for Matakana, and why the forecast of 14,000 vehicles a day for the new toll road may be way overstated. (Hint: it is to do with the toll.)
Thanks to mfwic in the comments below, we have an extended series of data for McKinney Rd. With a base line of 2003, linear growth of just 2.1% is observed. Which makes NZTA’s modelling look even more overstated.
Housing is considered affordable if it costs less than 30% of a household budget. Transportation is the second largest expense for families, but few consider these costs when choosing a place to live. Center for Neighborhood Technology
We’ve run a few posts lately discussing the topic of housing affordability and transportation costs. Of course you can’t separate the concept of housing affordability from transportation costs, since most people have to travel to work to pay for their housing.
The posts were based on recently published research from the University of Otago, by Kerry Mattingly and John Morrissey titled, “Housing and transport expenditure: Socio-spatial indicators of affordability in Auckland”. Their work included a series of maps that showed a significant transportation premium associated with living in the distant suburbs. While the maps they published did not assume everyone would be working in the cbd, the results of the research showed that households furthest away from the centre generally travel greater distances for work and therefore spend more of their income on housing AND transportation.
There was a robust discussion in the comments about how the data was not so useful since everyone’s situation is so different. This is where Alex Raichev and Saeid Adli come in. Using the methodology of Mattingly and Morrissey as a starting point, they developed a dynamic website called Affordable New Zealand that shows housing (rent) costs + transportation costs and allows users to identify housing and travel costs based on specific location of work.
They have included a number of factors which contribute to the overall cost of living such as parking and car ownership. The car ownership cost reflects the sunk cost of the car, even if the mode of travel chosen is public transport (or walking, cycling). Further travel costs for the car are determined by distance traveled to work. The public transport costs are estimated using the formula from Mattingly and Morrissey.
Here is a look at the results using Albany as the job location.
Where to live? Job in Albany.
Another way to interrogate the data is to consider the pin drop as a housing choice and then the data reveals the relative affordability of accessing employment areas. Here is a comparative fictitious example of a young family with one parent working trying to decide between living in Titirangi or Freemans Bay. The Titirangi family has 2 cars and use 1 car to go to work paying $15 for parking. The Freemans Bay family has 1 car, but uses PT to get to work.
Affordable Lifestyle Choice #1: 2 Cars in Titirangi (source: affordability.org.nz)
Affordable Lifestyle Choice #2: 1 car + PT in Freemans Bay (source: affordability.org.nz)
The site is still under development. One idea is to expand the search criteria to suit a couple/household scenario with two unique job locations. Another improvement will be refining the data to provide a more accurate cost of public transport. Wellington and Canterbury versions are coming soon. The project is open source (Github), and if you have any comments about the project leave them below or contact Alex from the notes page.
On Saturday of all days, Auckland Airport (AIA) released their new 30 year vision including a website called Airport of the Future. In many ways this doesn’t appear all that different from their previous long term vision documents, with the key change seeming to be that they eventually want the future Northern runway to be longer than currently planned and consented for. Here’s the video that they have put together to show the long term vision.
There are a couple of key things that AIA are predicting to happen over the next 30 or so years.
- Annual passenger movements will increase from 14 million to 40 million
- The number of flights in and out of the airport will double to 260,000
- The number of jobs in the airport area will increase from roughly 20,000 to around 40k (airport say it will create extra 27k jobs but that’s across entire economy). To put things in perspective, the entire Highbrook/East Tamaki industrial area and the Manukau City Centre and surrounding industrial areas combined contain about 40k jobs.
- Daily trips to and from the airport predicted to increase from 63,000 per day to 140,000 per day.
That’s going to put a lot of pressure on the transport networks and the airport has been stressing that it’s leaving land aside for a future rail connection. However the more I look at what’s proposed the more it seems just like PT wash as they know it’s what the public want to hear. I’m pretty sure they don’t actually want a rail connection ever, and here are five reasons why.
1. Difficult route
If you look closely at the route above plus the staging plans you can see the route goes straight through about 9 different buildings to the south of Tom Pearce Dr. Even though the airport own the land it is going to be extremely difficult to kick out all of the businesses at or around the same time, especially if they have well established operations. My guess is we can expect increased construction costs as a result to compensate for this issue.
This could be reduced by shifting the corridor slightly north to Tom Pearce Dr.
2. Fully underground route and station.
It’s not 100% clear from the documents but from what I understand, the AIA have basically told Auckland Transport that the entire line has to be underground through their property – although that’s partly a practicality thing too. Starting from the north the line will now obviously have to go under the proposed longer northern runway. By the time it surfaced from that it wouldn’t have long to go before having to dive underground again for an underground station that AIA want. I also can’t see them wanting an at grade line through their airport services area as that would hinder necessary movements. That’s potentially up to 3km of underground tunnelling. The outcome of this is to significantly increase the cost of the project making it harder to justify.
Along with shifting the route slightly north to Tom Pearce Dr, once it’s clear of the runway there’s no reason why it couldn’t raise to the ground level and be elevated through to the terminal.
3. Distance from the terminal.
The main reason for building a rail connection to the airport is to make it easier for passengers and staff to access the area. The plan is to combine the international and domestic terminals into a single building with the domestic one in the south end with the international terminal in the northern end. Now I assume there would be underground links under the multiple roads accessing the terminals however even so the location of the station is potentially up to 500m away from the international terminal. Airports are obviously good at moving people long distances through the likes of travellators however that is quite some distance. The station would also be further way from the terminals than the parking buildings proposed. Perhaps there’s a legitimate reason for it, but it seems this is just another way to reduce demand for any rail service.
Surely it wouldn’t be that hard to extend the route a few hundred metres closer to the terminals.
4. Second Airport area station
As mentioned a bit part of the AIA’s plans is to turn the area into not just a better airport but a massive employment hub too. They are already working on developing a CBD type area with hotels, office parks and retail on their land. It may look close on the image below but those offices are about 1km away from the proposed station. This may be part of the reason for the airport station being short of the terminal but if that’s the case, the reality is most people working in the office areas aren’t going to want to cross a the mega roads needed to serve the terminals and carparking buildings to access it on a daily basis. With a station more directly connected to the terminals, another station about 1km east to serve the office and retail precincts might be better. It might add a little bit to the journey time of trains but help the line be far more useful to more people which should more than make up for it.
It’s no secret that AIA makes a lot of money from carparking and that revenue has been growing strongly. In the year to June 2013 the revenue from their parking business was just over $40 million, about 9% of their total income. Currently the airport has about 7,000 carparks and as part of their vision they want to expand that to about 20,000 carparks (although it isn’t clear if this is extra or total – the herald article suggests it’s extra). The intention is to focus the new parking in two mega buildings that are both directly linked to the terminal and they would be built in the first phase of the master plan which means before 2022. They are the two massive buildings in the image below. To give a sense of scale, the recently build Novotel Hotel right next to the international terminal can be seen right next to the curve in the terminal building. In terms of carparking buildings, the AT’s massive downtown carpark holds less than 2,000 cars.
All up there doesn’t seem like that much commitment and definitely not any real push by AIA to get a rail line to the airport built. At a recent IPENZ discussion I understand they basically said they thought the only people who would use a rail line/PT to the airport were the time rich. This is almost hilarious though as a train would be able to get people to the airport from the heart of the CBD in about 35 minutes, even with stopping at stations along the way. That’s a kind of time that simply won’t be possible to achieve on the roads most times of the day. They apparently also said expected buses to be able to cope with demand for the next 30 years yet seemed to think the roads around the airport would be able to handle a doubling of traffic.
Things definitely aren’t looking good for rail to the airport.
This is a question that Councillor Chris Darby asked on Facebook last week:
It is a valid question, especially considering the white elephant that has been the Ronwood Ave carpark in Manukau. But if we look a bit closer at the city centre, it seems like some pretty key sites – worth quite a lot of money – are wrapped up in parking. Let’s just look at the Downtown and Victoria Street carparks.
The Downtown carpark has nearly 1,900 spaces, occupies a prime site pretty much on the waterfront and is a key location in terms of linking together the city with the viaduct and Wynyard Quarter areas, as well as to the growing Victoria Quarter. The site has a capital value of $65 million, of which around half is the value of the land it occupies:
The Victoria Street carpark is about half the size (just under 900 spaces) and once again is located in a pretty prime spot in the city centre – right next to Albert Park and with a bit of elevation overlooking the Queen Street valley. It’s worth $45 million, of which just over $20 million is the value of the land itself.
I wonder what sort of rate of return the Council is getting on these pretty expensive assets. Looking at the pricing structure of parking in these buildings it seems as though prices are about the same (for early bird) or cheaper (for casual parking) than they were a decade ago. The Draft Annual Plan suggests a fairly modest $2.7 million profit from the entirety of the Council’s off-street parking business – on revenue of $28.6 million. While some expenditure will be on free parking areas in smaller centres, it does appear as though the rate of return on the city centre parking buildings (let alone the Ronwood Ave white elephant) is fairly dismal.
Councillor Darby seems keen to have the conversation around whether off-street parking buildings should be something Council (through Auckland Transport) gets involved in. Considering that in the city centre, owning parking buildings and probably subsidising the cost of parking (through the very low rate of return) goes against all policies to boost public transport use and unclog the city centre of cars, it’s a damn good conversation to have. Another one is whether Council should sell the buildings in their current use or redevelop them into something else themselves (as suggested for the Downtown carpark in the City Centre Master Plan).
The long running battle to develop land at Orakei Point has finally come to an end with the plan change enabling the development finally operative. Bob Dey reports:
Plan change 260 for Orakei Point – now Orakei Bay Village – won its final approval to be made operative on Tuesday, completing an often acrimonious regulatory journey that began in 2006.
The plan change was originally sought from Auckland City Council by Tony Gapes (Redwood Group Ltd) to develop 5.9ha around the Orakei railway station, at the foot of Remuera, for an upmarket community of up to 1600 people.
Well placed Remuera locals fought the proposal and, in 2009, then-mayor John Banks took the masterplan to a community meeting, then made it a council-sponsored plan change. The plan change rezones 4.7ha to a site-specific mixed-use zone and the remaining 1.2ha to open space 2, enabling a masterplanned “seaside village”. Provisions were structured so the site would be developed as a comprehensive whole – except that, when it was publicly notified in January 2010, Mr Gapes didn’t control the whole site.
The new Auckland Council approved the plan change with conditions in April 2011, but 3 appellants took it to the Environment Court. The council’s Auckland development committee approved the plan change on Tuesday after the court resolved the appeals.
I’ve long thought that the site was ideal for development as it is fairly close to town with excellent amenities including of course an existing train station which will only become more and more useful and frequent with electrification and then the CRL. As part of the development, the railway lines and station will be capped. I’m sure Auckland Transport will work with the developers to make the station something special and unique. There is also to be space for a third track through the development.
In the report to the councils development committee it says.
The overall intention of the plan change is that a development lid be placed over the railway corridor at Orakei Point, and the covered area be utilised for roads, plazas, commercial and residential use with open space and walkways around the periphery. Key features of the notified plan change were:
- provision of up to 84,000m2 gross floor area of mixed use development, comprising 64,000m2 of residential (about 700 apartments), a maximum of 10,000m2 each for retail and office activities, and a maximum of 1,750 parking spaces
- maximum building heights, public open space areas, and special tree protection areas
- assessment criteria particularly focused on high quality urban design, connections with public transport, open space and sustainability
- a comprehensive package of development controls to limit the overall height and bulk of the built form to within defined envelopes, and to ensure specific features on the Master Plan are achieved
- a staging table to secure certain public amenities and infrastructure prior to development of each precinct
- four overlay plans applying development controls i.e. maximum heights, site intensity and staging, veranda cover, and traffic and pedestrian links, to the land.
Following on from the appeals and environment court action there have been some changes to the original decision by the council. They include:
- a revised masterplan, with smaller buildings, a secondary road network added to the main link road, larger shared spaces and plazas, and increased veranda cover along key pedestrian connections
- amended order of staging of the development precincts, bring forward a new railway station building and plaza in the first stage of development. These changes do not trigger the need for additional traffic and road improvements
- a requirement to vest an esplanade reserve with a minimum depth of 20m in Council Item 10 Auckland Development Committee 11 March 2014
- reverse sensitivity covenants, and new internal noise standards for buildings to mitigate the adverse effects of rail noise
- greater protection for trees within the special tree protection areas by way of resource consent for works which will result in removal of more than 5% of the canopy of any tree, or the removal of three or more trees, or the significant adverse effects on three or more trees.
The developers have already been selling apartments and terraced houses based on the environment court decision, here are some of their marketing images of what the developments will look like.
The CRL has been approved by the planning commissioners hearing the notice of requirement. I haven’t had a chance to look through the documents about the decision and won’t fit a little while yet so let me know if there’s anything interesting in them.
Auckland Transport has today welcomed a unanimous recommendation by independent planning commissioners that the land required to build, operate and maintain the City Rail Link (CRL) be set aside for the project.
The five commissioners, who heard AT’s planning application for the CRL, have recommended that the designation for the land be confirmed, subject to conditions that address issues raised by submitters.
The commissioners say they accepted the CRL would result in significant overall benefits to the people and economy of Auckland. “There was no evidence to challenge the benefits of the project and most submitters in opposition accepted the merits of the project.”
AT Chief Executive, David Warburton, says the recommendation and related conditions would now be considered by Auckland Transport. AT has 30 working days to confirm, amend or withdraw the notices.
There was overwhelming support for the CRL and many of those who submitted in opposition to ensure their particular interests were addressed, also voiced their support for the project.
David Warburton says when a decision is made, all affected landowners and submitters will be informed of the result. Submitters will have 15 working days to appeal the decision to the Environment Court.
The documents are here.
Several recent reports and articles have discussed trends in migration and its impacts on New Zealand.
In terms of trends, net migration is at a 10-year high. The recent surge in net migration trends is shown below.
The simple reason advanced for the positive net migration trend is that our economy is doing relatively well compared to most of the countries with whom we compete for skilled labour. This is both 1) reducing the number of kiwis departing these shores and 2) attracting more people from elsewhere to come live/work here (some of whom will of course be NZers). Put simply, less out and more in = higher net gain. Trends in long term departures and arrivals are illustrated below.
So what might be the impacts of higher net migration?
Usefully, the people at NZIER have been researching the impacts of migration on New Zealand’s economic performance. They find that for every 40,000 additional net migrants, our GDP per capita increases by approximately $400 p.a. Why? Well, there are apparently a number of microeconomic channels through which migration contributes to economic output, specifically:
- They provide firms with new skills
- They increase innovation and entrepreneurship
- NZ businesses benefit from greater scale and competitiveness
- They increase returns from public investment
The general message is fairly simple: Migrants increase the diversity and scale of our labour market and firms, while also increasing the returns on public investment (which typically have relatively fixed costs, such as infrastructure and institutions). It’s worth pointing out, however, that only the first two economic channels listed above are actually specifically linked to migration. The last two microeconomic channels are pure economies of scale, which would also result from a higher domestic fertility rate.
Which brings me nicely to another (potential) benefit from migration: Greater diversity in potential partners.
I know this sounds flakey, but I’ve just recently been struck by how many of my NZ friends (including several of my fellow bloggers) are partnered up with people of foreign origin. Which raises an interesting proposition: Is it possible that higher rates of net migration have an indirect impact on domestic fertility rates? I’ve been asking my mates but they’re a bit coy on the topic. But it seems reasonable to suggest that if migrants introduce diversity/specialisation into the labour market then perhaps they do the same for the “partner market”.
I guess the net effect depends not only on the quality of the match, but also migrants’ relative preferences for making babies compared to the existing NZ population (to which they are added). This is an area that may warrant further NZ-specific research (NB: The World Bank has analysed migration and fertility impacts in this paper. The key finding appears to be that migration reduces home country fertility and increases destination country fertility, as I would expect. However the World Bank appear to attribute this to simple differences in preferences, rather than better matching).
Are there negative impacts from migration?
The most obvious is the additional demand for housing that results during times of high migration, which could in turn lead to higher property price inflation and ultimately higher interest rates. This will not only curb domestic demand across the economy, but it will also tend to inflate the currency and undermine NZ’s export competitiveness. This issue is all the more relevant in the Christchurch context and, in my opinion, supports the Reserve Bank’s decision to implement loan-value requirements as a temporary curb on housing demand in these relatively exceptional circumstances.
Some people suggest that higher net migration might reduce social cohesion, although specific details on exactly what is meant by social cohesion are difficult to come by.
Data from StatisticsNZ (as discussed here on KiwiBlog) suggests people of Asian ethnicity in New Zealand have much lower rates of criminal offending than the general population, while the opposite is true of Pasfika ethnicity. However, this difference may be attributable to differences in the relative incomes of these two migrant groups.
I can’t help but wonder that if 1) more kiwis are staying here and/or returning from overseas (where approximately 1 million currently reside) and 2) kiwis who hook up with migrants are generally happier than they would be otherwise, then it seems possible that current trends will actually bring people/families together and thereby supports greater “cohesion”. So ultimately I think this supposed “negative” effect of migration is likely to be over-stated and that, on balance, migration has net positive impacts for NZ’s socio-economic performance.
So what should we expect from future trends in migration?
Well, if the results of this international survey are anything to go by then NZ can expect to see positive net migration numbers for some time. The survey ranked New Zealand ranked fifth overall for preferred destination and subsequently estimated that our population would increase to over 9 million in the event that everyone who wanted to migrate here was able to do so. Of course, the relative performance of NZ’s economy will be the main determinant of whether current rates of migration are sustained.
All I hope is that we start to get people like Emma Watson and/or Hayley Williams migrating here to vie for my affections. Sweet.