Demography

These sober findings put debates around New Zealand’s housing crisis into a different perspective. As bad as the housing market situation is today, there is worse to come if we do not unlock the supply side of the housing market now.

There is no shortage of issues in New Zealand that need to be tackled: the housing affordability crisis, or the challenges to our superannuation system, to name just two examples. But the opposition did not provide any game-changing policy ideas on either of them.

It is good to see housing high on the policy agenda. That is where it should be. As anyone with a stake in the housing market knows, there is a massive undersupply of housing. This is what is responsible for high and rising prices.

France and Spain give us a taste of what is to come in Europe in the coming decades. What comes across as a relatively theoretical exercise concerning pension levels in the distant future will become a reality within the next ten to twenty years — and not just in these two countries.

Make no mistake about it: New Zealand’s enduring economic viability depends upon the government’s ability to demography-proof public finances. And on living up to this task depends the Prime Minister’s historic legacy.

As our political and economic circumstances are among the best in the world, we need to fill them with life. The opportunities to create growth and prosperity are there, we now have to embrace the idea of a growing population to seize them.

In the strange economic world of the global financial crisis, the complexity of our problems is enormous and the challenges are manifold: public debt, unsustainable welfare systems, ageing societies – to just name a few. These would be difficult enough to solve in societies in which broad political discussions still happened and involved large parts of the population.

Australia’s population is growing, whether you like it or not. But in dealing with it, nothing would be more irresponsible than pessimism. The challenge is not to stop population growth but to find practical solutions to accommodate it.