Worried about the exodus? Well, Australia is, too. And get ready to worry some more. That was a strand of discussion at the annual Australia New Zealand Leadership Forum on Friday and Saturday.
The forum aims to underpin the government-to-government relationship by bringing together politicians, businesspeople, academics and commentators. Now in its fifth year, it nearly collapsed after Australian Prime Minister Kevin Rudd landed his summit to plot Australia’s future on the pre-set April date and then Australian co-chair James Strong was too distracted to organise his side.
Last minute action by Australian Trade Minister Simon Crean and stand-in co-chair Rod McGeoch rounded up ministers and a better-than-usual Australian business crew.
That, plus New Zealand co-chair John Allen’s search for a strategic dimension, got the forum back on life-support and even puffed in some oxygen. There now may be enough momentum to give it real potential.
That’s important here because this country has more need from the relationship than Australia, particularly in the single economic market process aiming to make it as easy for a New Zealand company to do business in Australia as here and vice-versa.
Nevertheless, the relationship is important strategically to Australia, as Rudd and John Howard before him have affirmed. Rudd is trying to reinject a strategic dimension to policy generally. Public servants used to implementing the often ad hoc policies of the later Howard years have been pressed to review, research and remodel policy with a future-oriented cast.
That coincides with Allen’s attempt re-energise the forum. In its first four years it was an awkward admixture of big-picture sweeps and working groups on the detail of ironing out trans-Tasman divergences in policy and regulatory settings.
Allen does not find enduring satisfaction among the nuts and bolts. He reads poetry for pleasure besides running New Zealand Post. He wants a strategic future for the forum.
So, bank the working groups’ successes — which essentially have been to speed up government-to-government actions — but also set longer-term sights. Some ideas that emerged: push on past the single economic market to a common border; a joint greenhouse gas emissions trading scheme; more cooperation on international trade challenges and opportunities.
Michael Cullen (who delivered a brilliant brief homily at the forum’s Anzac service) got the mood with a forceful push to put full reciprocal imputation of dividends back on the table. Australian Finance Minister Lindsay Tanner did not immediately flick it off as did Howard’s Treasurer, Peter Costello.
But the agenda went beyond country-to-country issues. Presentations included the implications of China’s hard-nosed style of soft-power diplomacy for “western” nations — a topic hardly discussed here — and the huge looming shifts in the world’s age mix.
It was in this context that the Australian angst about its exodus arose. A simple message for New Zealanders, who will hear much on this in this coming election campaign and probably for several after that, is that if Australasia is counted as a single labour market (which it is), the New Zealand exodus from Australasia as a whole is probably not hugely greater than Australia’s.
Put this in a long-term frame. We have had, Waikato University demography professor Ian Pool said at a conference two weeks back, a “demographic dividend” — that is, an expanding working-age population (ages 15-64).
So has the world and particularly China and India, the two giant “emerging” economies which have greatly expanded world production in the past couple of decades.
But, Bernard Salt of KPMG Australia showed the forum, this expansion is now slowing and in some countries, including New Zealand (from 2022), China (from 2016) and even India (from about 2050), will reverse into contraction.
The message: we will be scrambling for workers to fund the old age of the baby boomers, who have squandered the demographic dividend, and then generation X at the very time bigger, richer countries are also hunting for workers. It doesn’t help that in our sorts of societies boomers’ lifestyle fads have already compounded the problem.
As Pool puts it, we have perhaps a 10-year period of demographic grace. This dovetails with the maybe 10-year window of opportunity that I have argued here our terms of trade uplift gives us to step up to a high-wage economy.
The implication from Salt and Pool is that the working-age population will have to be replenished with over-65s. That is, you will expect to work longer.
Now think about the Tasman connection in this context — and in the context of dealing with a still largely unknown and unknowable powerful China.
The message is that the forum has work to do. Yes, about imputation tax and emissions trading. But, beyond that and far more important, to think through responses, as two closely entwined societies, to the huge world changes to come.