26 Feb 2018

Tim Hazledine - NZ's optimum population 2 million

From Afternoons with Jesse Mulligan, 2:30 pm on 26 February 2018

New Zealand’s optimum population was reached 70 years ago, a professor of economics says.

Tim Hazledine, professor of economics at the University of Auckland, told Jesse Mulligan New Zealand is over-populated.

“When I was born it [population] was about 2 million. If we’d stuck at 2 million then houses in Auckland right now would be about the same as they are in Invercargill right now - about three or four hundred thousand.”

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Photo: University of Auckland

And he doesn’t believe population growth makes us all better off. He says the opposite is true. 

“Economic growth would be higher per person because resources would be so much cheaper, we wouldn’t need to put so much of our incomes into housing.”

Although he says the population horse has now bolted, governments should not be “pro-natalist.”

“I certainly don’t think any responsible government should be pro-natalist; don’t subsidise babies, we’ve got enough babies in the world.”

The most recent variant of globalisation that has prevailed for the last 40 years hasn’t necessarily benefitted New Zealand either, he says. 

The developed world needs to think about manufacturing more at home again.

“We actually did better when there wasn’t so much globalisation. It’s funny to think of it but as late as the 1960s a third of our exports were wool that went to France and about three other countries.

“Dairy products went mainly to Britain before Britain joined the European Community so we’ve always been a trading country much, much more than any other country you can think of really for a 100 years.”

And New Zealand’s manufacturing capacity has withered in that time, he says.

“We had to diversify a lot more and our core manufacturing industries that we’d quietly built up through from the 1920s, they were basically knocked out of the water.”

Globalisation has offered us cheaper goods, but at a price he says.

“We’re all buying a lot of cheap stuff from overseas which is basically built on not paying the workers very much.”

Concerns over economic sovereignty in the original TPP trade talks were justified, according to Prof Hazledine.

“Sovereignty is important. Pharmac which is the New Zealand-owned government monopoly that negotiates as one and gets a very good price for drugs - there’s a lot of foreign pharmaceutical companies that would like to charge us a higher price.

“They may say: ‘this is unfair to us, unfair to free trade.”

Prof Hazledine says there are other more important problems global treaties could tackle besides free trade.

A tax treaty for example to avoid corporate profits “sloshing around the world looking for a tax haven.” Which he says has been a “race to the bottom.”

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