Spoonley: ‘silver economy’ in the region should be captured

Regional New Zealand has a rapidly aging demographic profile, and while that can cause a strain on social services, it also presents an economic opportunity, according to  demographer, Professor Paul Spoonley.

Speaking to Jessica Mutch on TV One’s Q+A programme, Prof Spoonley said local authorities need to consider their “age-friendly” policies.

“These are active, energetic people who can contribute a lot. They have a lot of skills. They sometimes have money to invest. They have businesses. So what are we doing in regions to capture that silver economy – both the demand, but also what over-65 people can contribute in an economic sense?”

Prof Spoonley said New Zealand was “behind the eight ball” in thinking about the demographics of the regions and how they might work to build their economies.

“In the Netherlands, for example, if you provide aged care, then one of the requirements is you provide a kindergarten as part of that aged care facility so you get the intermixing of generations. We don’t do that.”

RAW DATA: Q+A transcript:  Paul Spoonley

Watch the interview here

JESSICA    Welcome back. Anxiety about the fate of our regions looks set to become a key political issue in the lead-up to the next election. New Zealand First leader, Winston Peters, who many predict will be the kingmaker on election night, has been actively campaigning in the heartlands, promising policies to revive regional economies. And just recently, Labour promised a free university education for graduates who commit to a public service job in the regions. My next guest says, in many cases, decline is unavoidable, but there could be a silver lining too. Demographer Professor Paul Spoonley joins me now. Thank you very much for being with me this morning.

PAUL    Good morning, Jessica.

JESSICA    I want to start off by asking you – in these regions, sometimes decline is inevitable. You’ve outlined that in your book. It sounds like bad news. Is it?

PAUL    It is if we don’t deal with it. So I think the bad news is that we’re facing a very different demographic future, and the demography of those regions is going to put a handbrake on the economic possibilities. So there is an upside, and, of course, we’re back in the queue. There are many other countries that are facing structural ageing, which is one of the impacts on the regions, and there are things that we can do.

JESSICA    Is that changing in part? We’ve just heard from the panel there, saying that a lot of young people, if they grow up in small communities, move away for work opportunities or for university and often don’t come back. How much of a factor is that at play in why this is changing?

PAUL    It’s huge, but that’s the old demography, because that’s always happened. So you move away for a job or for further education, and, of course, in our economy, further education is, pretty much, vital for practically all jobs. So if you don’t have that facility in your region, you’ve got to move. And, of course, why would you go back if there are no jobs there? So that’s a major issue. But the new demography is that many of these regions are facing structural ageing, so the dominant group in the region is going to be the over-65s. Well, that presents some very interesting challenges.

JESSICA    You talk in your book about this whole idea of the silver economy. What do you mean by that?

PAUL    Well, we tend to use a half-full/half-empty when we come to the over-65s. So, yes, we’re gonna have to think about how we service a region that has a lot of over-65s in it. And we’re talking a third. So a third of the region will be aged over 65. Where’s your dementia care? But, if you want to go to the other side, which is the half-full, these are active, energetic people who can contribute a lot. They have a lot of skills. They sometimes have money to invest. They have businesses. So what are we doing in regions to capture that silver economy – both the demand, but also what over-65 people can contribute in an economic sense? And, if I can just finish that, what are our age-friendly policies looking like? What are our age-friendly regional policies looking like?

JESSICA    What’s your take on that? Do you think we’re doing okay in that department?

PAUL    No, no, no. We’re way behind the eight ball. So in other countries, you can see that they’re beginning to think about, well, what does that mean in terms of industries? But also, in the Netherlands, for example, if you provide aged care, then one of the requirements is you provide a kindergarten as part of that aged care facility so you get the intermixing of generations. We don’t do that.

JESSICA    Because that’s the thing. In some of those small communities, you almost have the opposite happening. You have the hospitals and the schools closing down. That must be crippling for these communities. Are you saying we need to replace those with more appropriate, sort of, community groups and organisations?

PAUL    Well, I am, but I also think there’s a fundamental issue with our funding policies. So if you’re in a DHB and you’re sitting in a region which is seeing a significant increase in the older age and you’ve got a population funding model, then suddenly you are not– you’re going to have to divert resources to the older groups, and, of course, you begin to then think, ‘Well, what do we provide for younger groups?’ So there’s a reprioritising of your funding, but also alongside that you’re seeing tipping points. So do you have enough to sustain the local medical practice? And you might remember earlier in the year there was a medical practice in Tokoroa which was offering $400,000 for a GP. Couldn’t find anybody. And the same happens with schools. There aren’t enough kids there to generate enough for a local school to remain open.

JESSICA    Because a lot of policies – we’ve seen New Zealand First and Labour – are saying, ‘Look, if you guys can stay in the regions, we’ll help you with your student loans or give you an incentive to stay there.’ What do you think of those solutions?

PAUL    Well, they’re partial solutions. So for me, the whole people policy, or the population policy, is undercooked. We tend to focus on the economic drivers and the economic factors, but actually, what are we doing about populations in the regions? And that’s got various dimensions to it. We’ve been talking this morning about younger New Zealanders, in terms of getting jobs in regions. Yes, immigration is part of the answer, but if we default to immigration, then we’ve got a problem. We need to have, in those regions, pathways into employment, otherwise, either they don’t stay, or they stay and are not in employment. So the NEET population – the 82,000 – is a major policy issue for us in New Zealand.

JESSICA    Because migrants, immigrants to New Zealand, traditionally do tend to go to the cities, where there are the expat communities and where there are more employment options. Do you think that there should be more drawing them to the regions? Is immigration part of that solution, do you think?

PAUL    It is, absolutely, because, increasingly, population decline, or population stagnation, means that regions are not going to see population growth. So that means that the over-65s will outnumber the 0-14s in many regions. Taranaki’s just about to enter that at the moment. So how do you move people into those regions? Immigration’s part of the answer. And they bring not only job seeker or job skills, but they also bring demand. Possibly, if you’re smart about it, they bring you businesses. At the moment, the minister has increased the points for going to a place other than Auckland from 10 to 30. In my view, it’s not enough. And the other thing is that regions don’t do enough to attract and settle immigrants. So my challenge to many regions around New Zealand is, ‘What does your immigration policy look like?’ I mean, the government has a role to play, but you are equally as important.

JESSICA    How could they do that, do you think? Is it about building the community around people who are new to town?

PAUL    Well, it’s already happened. If you look at Southland, half of the dairy workers in Southland are Filipino. And if you go to a place like Gore, quite apart from the fact that the Roman Catholic Church is really booming, if you go into the schools, a big chunk of the school population are the Filipino kids. So you can see, in some regions, how it’s beginning to impact. But, of course, in many of our regions, we rely on temporary workers, so we don’t get those long-term benefits. I think what you need to do is be welcoming, you need to be clear about what jobs exist in regions, and you need to realise that immigrants do actually like their own food. They do speak a different language. You’re going to get a very different feel to your region or your community. Make that a positive.

JESSICA    You used the example of Taranaki before, where there’s going to be that tipping point. Won’t you end up with some of these regions, though, that are just slowly dying out, with the greatest of respect.

PAUL    Yes, and that’s always happened. That’s not a new story, but the demographic challenges that we’re seeing at the moment add a very significant additional dimension to that. So those regions are going to die in a population but also an economic sense. Do we let that happen? I think that’s the political question and the policy question. And the government have begun to recognise it’s an issue, but are we doing enough?

JESSICA    And that political question we may have to leave for the panel. Thank you very much for you time this morning.

PAUL    Thank you, Jessica.

Tune into NBR Radio’s Sunday Business with Andrew Patterson on Sunday morning, for analysis and feature-length interviews.

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