Auckland can’t outrun the population ponzi

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By Leith van Onselen

The New Zealand National Government has released a joint report with Auckland Council setting-out preliminary views on improving Auckland’s transport system. From Interest.co.nz:

The report marks the completion of the second of three stages that make up the Auckland Transport Alignment Project (ATAP), a joint project between the Government and Council to agree an approach for developing Auckland’s transport system over the next 30 years,” Mr English says.

Mr Bridges says it has found that achieving a step change in the performance of Auckland’s transport system will require a range of interventions.

“It concludes that while ongoing investment in new road and public transport projects will clearly be needed, greater use of technology and in the longer term, road pricing – or directly charging for road use, will also be part of the toolkit,” he says.

“The final stage of ATAP will look at what additional projects could be brought forward in the next ten years to support Auckland’s growth. If the benefits of early investment in these projects are significant, there may be a case for the Government and Council to make extra funding available,” Mr Bridges says…

While achieving a more efficient and better utilised transport system is always a worthwhile goal, one cannot help but think that the Government’s and Council’s efforts will be futile as long as New Zealand continues to run a turbo-charged immigration program.

As shown in the next chart, which comes from the RBNZ, Auckland is already experiencing unprecedented levels of immigration:

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ScreenHunter_12899 May. 11 08.22

And according to the New Zealand Treasury, Auckland’s population is projected to swell to such a degree that it will account for 60% of New Zealand population growth until 2043:

This is a city that a multitude of New Zealanders and new arrivals want to make their home. It’s growing fast, and that doesn’t look like changing any time soon – indeed the city’s population is expected to grow by another 716,000 people over the next 30 years. Auckland is projected to account for around 60 percent of New Zealand’s population growth between 2013 and 2043, and to reach two million in the early 2030s. That’s as many as the total number of New Zealanders when the Queen took the throne.

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Auckland’s traffic congestion is already hideous, with the TomTom Traffic Index 2016 ranking Auckland the 40th most congested city from a list of 295 cities around the world, with Auckland having the second highest traffic congestion in Australasia after Sydney (ranked 30th).

It’s hard to see how the Government and Auckland Council could possibly outrun the constant flood of new residents into the city.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.