This month’s chart shows the public debt to GDP ratio for all 171 countries covered by tradingeconomics.com that have public debt data. Public debt includes the debt of governments at all levels; not just central government. And we should note that many countries with substantial levels of public debt are creditor countries overall; it’s just that the government component of those countries’ economies offsets their private sector creditor status.

The highlighted countries here are all ones which New Zealand is familiar with.
The first point to notice is that there are countries with strong economies and countries with weak economies across the whole spectrum. The overall impression, however, is that countries that we look to as economic exemplars are more likely to be towards the left (higher debt) of the public debt spectrum.

New Zealand, at 25% of GDP, comes in at 139 out of 171 in the public debt league. The only OECD (developed) countries that have less public debt are Luxembourg and Estonia. The other counties in the 24% to 26% range are Peru, Bulgaria, Guatemala, Eritrea, Cameroon and Liberia.

Why do we want to join Kazakhstan, Algeria and Palestine, which are at the 20% mark? The governments of Canada and the United Kingdom, with public debt at 90% of GDP, have triple-A credit ratings. Their governments can borrow money at close to 0% interest despite their high public debt.

Japan’s government borrows from its people at 0%. Indeed Japan, with public debt at 250% of GDP, has plenty of ongoing public spending, including the Rugby World Cup and the Olympic Games. Japan’s government, like New Zealand’s, has a double-A credit rating.

Without public debt, the world economy would be in a state of complete collapse. If all governments were like ours, aiming for the bottom of the public debt league (right hand side of the chart), then this would truly be a race to the bottom.

Once upon a time we regarded market-work as a necessary evil, and we anticipated a future reward, in the form of a leisure-dividend. From the 1850s to the 1970s, the idea of a good life included the notion that there would be a release from market labour; indeed, this was considered the whole point of raising our productivity in work.

The leisure-dividend would be a release well before the ultimate release of death, a release that would enable us to give meaning and identity to our lives separate from the identity etched upon us through our occupations and careers.

Once upon a time we worked to live. We used to see leisure as a solution. Now we live to work. Has leisure become a problem? Or maybe our youth are grabbing their leisure dividends early, as older people forfeit theirs? Leisure now or never might be their motto.

This month’s chart shows that 90% of 65-69 year-olds were free from market labour, but in 2017 only 55% are enjoying such freedom. The decline started in the late 1990s, around the time that the retirement discourse shifted. Fulltime retirement came to be framed, increasingly, as an unaffordable indulgence. The likelihood is that the pattern will continue; in part because for some people the love of money has become greater than the love of free-time, and in part because low and precarious incomes force many people to live extended market lives.

For 55-64 year-olds, retirement peaked at 59% during the unemployment crisis of the early 1990s. After that, as the age of entitlement to public superannuation was raised to 65, a rapid decline in retirement set in. Now 25 years after the peak, only 22% of 55-64 year-olds are retired or otherwise out of work.

Neither of the older age groups increased their leisure after the global financial crisis. Rather older people clung onto their jobs, leaving those in their twenties to pay the unemployment price.

While people aged 25-29 enjoy less leisure now than before, the leisure they do experience would appear to be enforced; it is correlated to periods of high unemployment.

For 15-24 year-olds, their fulltime non-employment, which exceeded 50% from 2010 to 2013, shows what must be understood as a remorseless upward trend. Certainly it is not clear that young people need more education than they did in the past. Non-employment in this age group is now as high as it was in the early 1990s, when the young truly experienced mass unemployment on a scale comparable with the depression of the 1930s.

On the upside, some young people may be taking genuine leisure dividends early, on the understanding that the option of a leisure dividend later in life may be closed to them. Others may have dropped-out of any serous expectation of a 40-year-life of paid labour. The epidemic of mental illness among young people surely must be related to the rising proportion who see little hope of leading a life of economic independence. Older people clinging onto their jobs must have contributed to the reduction of opportunities for unexceptional young people to build careers.

So the general picture is one of older people foregoing leisure dividends. And of younger people foregoing economic independence and the responsibilities that such independence entails. Deep down they know that, as they themselves move into middle-age, they will be expected to produce but not consume the goods and services that their collective elders will demand of them.

In 2017, the popular vote for the parties supporting the government is just over 50 percent – as it has always been since proportional representation was introduced 1996.

Before 1996 it was another story. After 1951, only 1972 and 1984 showed majority popular support for the resulting government. However, there was a block of elections from 1925 to 1951 in which popular support for the government exceeded 50% (with a proviso around John A Lee’s Labour breakaway party in 1943).

Of the post-war FPP elections, popular support for the resulting government was especially weak in 1954, 1966, 1978, 1981 and (most of all) 1993.

We must note that Independents always played a role upto 1935, much as they have done in Australia this century. I have used light blue for conservative Independents (and for Christian/Conservative parties in recent years). And I have used dark grey for Labour-supporting Independents (and for New Zealand First in recent years).

Of particular interest among the earlier elections are 1928 and 1931. In 1928 the party that had been third in 1925 (United, the rump of the Liberal Party of John Ballance, Richard Seddon and Joseph Ward; and led, from September 1928, by the now 72-year-old Ward).

In 1928 Reform, the principal precursor of National, had more votes than United but was tied on seats (27 each). United was able to form a government with Labour support on confidence and supply. It was Labour’s first taste of power. The arrangement did not last; it was Ward’s death in 1930 that revealed that United without Ward was really a very conservative party. (The global economic depression took hold in New Zealand in the second half of 1930.)

In 1931, Labour had more votes than any other party, and had increased its vote. But Labour was well short of a majority. A conservative coalition of United (3rd place) and Reform assumed power. United’s leader (George Forbes) continued as Prime Minister. Indeed, in all three elections which Forbes contested as leader of his party (1925, 1931 and 1935) his party had come third. Further, Forbes was instrumental in the postponement of the 1934 election, a situation that we would not tolerate of Jacinda Ardern and her government.

The chart is necessarily presented, on two dimensions, in a binary format. We should not presume the popular opposition to these governments as a united opposition, given the presence of independent MPs and independent parties such as Social Credit and New Zealand First.

Social Credit (shown in dark green) was never in government until, in the 1990s, it joined the Alliance (shown in dark red). Likewise, New Zealand First (in dark grey) is, with one exception, shown as ‘opposition’ unless a part of government. In 2005, a New Zealand First vote was not a vote for a Don Brash National change government. In 2017 a vote for New Zealand First was either a vote for ‘change’ or for a ‘substantially modified’ status quo. The exception is 1996, where there was no status quo, as it was New Zealand’s first MMP election. So, in 1996 I have split the New Zealand First support between government and opposition.

The Māori Party formed from Labour, in opposition to Labour. In the public mind it was been widely seen as ‘brown National’, and it was on that basis that it was not returned to Parliament in 2017. So here I have depicted the Māori Party (from 2005) as pro-National. This acts as a counterweight to the depiction of New Zealand First since 2005 as pro-Labour.

There is nothing exceptional about the present governing arrangement. Indeed, it’s what most people (at least in the media) expected to be the outcome in 1996. Multiparty government is not only associated with proportional representation. It has also been the reality in the United Kingdom for most of this decade. And it is a common reality in Australia.

Will the new government last until the next scheduled election year? Probably. 1928 and 1996 provide examples of a governing arrangements that did not last, even though in each case the Prime Minister was throughout the leader of the same party. We have to go back more than 100 years – to 1912 – to find a case when a Leader of the Opposition became Prime Minister mid-term. The 1912 situation can and will happen again, probably in the next twenty years. It nearly happened in 1998.

 New Zealand does not have reliable regional population statistics. The intercensal estimates that Statistics New Zealand publish are based on the extrapolation of trends that existed before the most recent census; in this case, the 2006 to 2013 trend. Sub-national population estimates are heavily revised after each census.

Last week I showed how, in the preliminary vote count for the 23 September election, the Auckland electorates revealed lower than expected vote tallies, and provincial New Zealand much higher than expected. These results meant that the population of Auckland had barely increased since 2014, or that Auckland had a disproportionate amount of uncounted special votes. Now that the final vote tally has been released, we see that both of these possibilities are true.

In today’s chart, I have grouped all electorates into regional categories, with greater Auckland divided into three categories: Auckland National, Auckland Labour, and Auckland fringe. Auckland National is those electorates in the isthmus, North Shore, and Pakuranga/Botany which have had a National MP for all this century. Likewise, Auckland Labour, which covers mainly the former Waitakere and Manukau cities, plus Tāmaki-Makaurau. While in many ways, Mt Albert and Mt Roskill are now a better fit with Auckland National, I have nevertheless included them with Auckland Labour. Auckland fringe is Helensville, Upper Harbour, Rodney, Hunua and Papakura.

The other particularly interesting grouping is the provincial ‘North-Waikato-BoP’: Northland, Whangarei, Waikato, Coromandel, Bay of Plenty, East Coast, Taupo, Taranaki King Country.

The chart shows the percentage increase in votes in these groups of electorates, adjusted by the overall increase in voter turnout (from 77.9% in 2014 to 79.67% in 2017). Thus, the chart gives an estimate of the increase in voter-age population in each electorate grouping.

Auckland Labour shows the smallest voter-age population increase. However, the higher overall voter turnout is not reflected in some of these electorates, which contain many of our most disengaged young people. Some residences and schools in South Auckland are undoubtedly overcrowded, and with disproportionate numbers of children.

We note that Tāmaki-Makaurau showed a particularly low vote in 2017, while other Māori electorates showed substantial percentage increases. This is strong evidence of ‘brown flight’ from Auckland to the provinces.

Of particular interest is the Auckland National grouping of electorates, which is the principal territory of the 2012-2016 Auckland house price bubble. There is evidence of a substantial net outflow from these nine electorates; partly people moving out of Auckland, and partly other people not moving into Auckland who otherwise would have moved to Auckland. It looks suspiciously like ‘white flight’, with the recipient electorates being on the Auckland fringe, the wider Auckland hinterland, and probably wider provincial New Zealand (including the South Island).

Other metropolitan electorates also showed slower population increases than their provincial hinterlands. Christchurch, not surprisingly, shows much growth on its fringe and little growth in its suburbs.

Dunedin shows least growth in its northern electorate. Hamilton mirrored this in its eastern electorate. So did Palmerston North, and Auckland Central. (Hamilton and Palmerston North are grouped together in North Island large provincial cities.) Cities with growing proportions of international students are certainly showing much smaller increases in votes cast.

To summarise, the major demographic features of the 2017 election are the redistributions from city to fringe (and hinterland) in Auckland and Christchurch, the distribution of non-voting international students, and the increase in provincial Māori.

Last year I wrote that there is no evidence of disproportionate population growth in Auckland, and even suggested that a number of central Auckland suburbs may be experiencing population decline. (See Immigration, and Immigration and Auckland Housing.)

I have done a preliminary analysis of the electorate voting statistics. The election statistics are based on electorates drawn up on the basis of Census 2013 population distribution. Electorate boundaries were the same in 2014 and 2017.

In today’s chart, showing selected electorates, the yellow bars show a surplus (positive percentage) either if the electorate has an above-average voter turnout, or if population increased disproportionately since the March 2013 census. The green bars will be lower than the yellow bars either if the electorate has had slower than average population growth since September 2014, or if the electorate has more special votes than the national average.

The results clearly show that there has been a net population flow from Auckland to the Bay of Plenty region; a flow that picked up after 2014. There has been a similar net flow to the ‘N’ provincial cities, and to Oamaru (Waitaki) and Dunedin. And the depopulation of the far south (eg Invercargill) appears to have reversed.

These are just preliminary results. I will do a more comprehensive analysis next week, after the final vote count. Certainly special votes may be disproportionately in Auckland.

These statistics shown do give the lie to the commonly repeated claim that net immigration into New Zealand is disproportionately into Auckland. And they do support the many anecdotal stories about Aucklanders selling up and moving to the more affordable provincial cities and towns.

When the electorate boundaries are redrawn after the 2018 census, Auckland might actually lose an electorate.

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With half of the preliminary (ie non-special) votes being cast before election day 2017, we can glean a clear view about which parties’ supporters are more likely or less likely to vote early.

This week’s chart shows the percentage point differences in voter behaviour for significant parties. By ‘percentage point difference’ we mean the party percentage of election day votes minus the party percentage of advance votes.

The four parties which gathered a larger proportion of advance votes relative to election day vote were the parties of the left. They show up in the chart as negative percentage differences. While the bigger parties necessarily show more prominently in this chart, relative to their own voter base the pattern is just as significant in the Māori Party and Mana Party figures.

It is not clear whether the left as a whole feels a greater sense of urgency in casting their votes, or whether it is in fact people who want change who tend to vote early. What matters here, for the future, is that, as election night tallies progress the party percentages for the Left (or for change) diminish. Labour got 36.7% of advance votes, but just 35.0% of election day votes. Their overall percentage tally dropped between 8pm and 11pm on election night, to 35.8%.

What also matters is that the advance votes probably tell us the pattern of special vote distribution, given that many of the special votes were cast early by people with similar motivation to those of early voters. My expectation is that Labour will gain almost as many special votes as National, and that the Green Party will gain enough specials to get one more MP. New Zealand First, who just missed getting a ninth MP in the preliminary count, will probably keep all nine MPs currently allocated to them.

One point of surprise is that the Opportunities Party (TOP) received proportionately many more votes on election day. Does that mean that TOP voters were largely conservatives? Did Gareth Morgan collect votes from people who voted for Colin Craig last time?

In the Scoop report of the most recent (16-19 Sep) Colmar Brunton political poll, we see the numbers adding up to 112.3%. This innumerate reporting – a result of Colmar Brunton’s own reporting method – represents one of the biggest flaws of political polling. It de-emphasises the most important statistic, the ‘undecided’ vote. We sometimes forget that the whole point of election campaigns is for parties to convince undecided voters to vote for them. The final election result comes as undecided voters make up their minds. Good polling will show whether undecideds are indeed making up their minds.

Today’s chart reports the TVNZ Colmar-Brunton polls from July, with undecided (and refused-to-say) voters included. The chart sequences the parties with the National bloc (including New Zealand First) at the bottom, with the Labour bloc above. The most likely pivot point is the Māori Party, placed here between New Zealand First and Labour. Parties unlikely to make the cut are shown at the top.

If all the undecided voters do in fact vote, the critical percentage should be between 48% and 49%. In the most recent poll, the National bloc is showing at 45%, meaning that if 30% of the undecideds support National, Act or New Zealand First, then those parties will be in position to form a government. This should happen if enough of the undecideds are undecided between parties in that bloc. But if the main source of indecision relates to Green versus Labour, then most of the undecided votes will be votes for a new Prime Minister.

The chart shows clearly that most of the support gained by Labour after its leadership change came from the Greens and the undecideds. After that, some support seeped from the National bloc to the Labour bloc. The 13 September poll appears to have been a ‘rogue poll’ (overstating Labour). By definition, 1 poll in 20 will be outside the margin of error.

In mid-September, we saw an increase in the undecided proportion. It’s less clear whether this represents people contemplating a switch in intent from the Labour to National.

My sense is that the final result will be an average of the 6 September and 19 September polls, with undecideds slightly in favour of a change of Prime Minister.

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In 1939, Joseph Schumpeter published his magnum opus, Business Cycles. He emphasised three growth cycles, Kitchin (about every three years), Juglar (about every decade) and Kondratiev (about five decades). Of interest to us at present is the Juglar Cycle, with its frequency of about 10 years.

This month’s chart averages economic growth (adjusted for inflation but not population). It suggests a very definite problem around years ending in ‘8’. Most observers of New Zealand’s macroeconomic history would be unsurprised. The ‘8’ years, with a few exceptions, have been characterised in New Zealand by contractionary economic conditions.

Interestingly, the next lowest year is not an adjacent year (‘7’ or ‘9’); rather it’s the ‘1’ year. Indeed, if I was to do this exercise for the world economy as a whole, the ‘1’ year would probably be that with the least growth (notwithstanding the global financial crisis of 2008).

Next year is an ‘8’ year. And all the indications – except one – suggest that 2018 will be a repeat of 2008; in New Zealand and in the world. The exception is that interest rates are much lower than they were in 2007, and the monetary authorities in some countries have their heads around negative interest rates. This in my view means that the world economy should ride out 2018 more easily than it did 2008.

I’m less confident about New Zealand. In the 1930s, countries that had made liberal adjustments (in welfare especially, and in monetary policy) in the 1920s (eg United Kingdom, Sweden) did best. Countries that most practiced fiscal ‘soundness’ in the late 1920s – United States, France, Germany – suffered worst.

My sense is that New Zealand’s lucky run this century is about to unravel. If that unravelling starts next year (or even sooner, if too much real estate is offered for sale after the 2017 election), I am not confident that New Zealand’s public sector will be prepared to go into large-scale deficit spending. I’m particularly worried that a new Labour-led government might pursue debt-averse austerity policies in the event of a 2018 recession.

The last years in which Schumpeter’s three cycles had simultaneous downturns – globally – were 1931 and 1981. While 1931 was particularly bad in New Zealand, 1981 was surprisingly OK in New Zealand compared to the rest of the world.

My sense is that the worst of economic times will happen in the decade from 2025 to 2035. 2028 (or 2027) may be particularly bad in New Zealand, as 1927 was. The next eight or nine years are the ones that will be critical. We need a genuine contest of ideas. We should be prepared for the critical consequences of inequality, precarious living, spending collapses, and debt-deflation.

The world capitalist economy grows through a process of debt-leverage. Every 10 years sees a bout of deleverage; sometimes regional, sometimes global. The solution to deleverage in the past has mainly been to quickly re-establish the leverage cycle. It didn’t happen in the USA, France and Germany in the 1930s. After one of the ‘8’ years or ‘1’ years in the next decade or two, the traditional monetary reboot will not work. We need to have a Plan B that is better than the World War that followed the Great Depression of the 1930s.

This month’s chart shows the only factual measure of net immigration: total arrivals in New Zealand minus total departures. It measures annual net passenger flows as a percent of resident population, using monthly data. The most recent figure, for the year ending July 2017, shows a net inflow of 59,842; which is 1.25 percent of New Zealand’s resident population.

Net immigration is a very good indication of safe employment opportunities in New Zealand relative to opportunities elsewhere. It is generally well-synchronised to New Zealand’s economic growth cycle. This century has seen post-1920 peaks, in 2002 and 2014‑16. 2002 clearly followed the New York and Washington terror attacks in 2001. 2014‑16 also strongly reflects security and economic concerns in much of the rest of the world.

The chart marks the two most recent property booms in the Auckland (and subsequently New Zealand) residential land markets: 2003 to 2008, and 2012 to 2017.

The first boom is demarked by the gold spots, the second by the red spots. The general picture is that such booms are unrelated to immigration. In the first 21st-century boom, initial immigration appears to be incidental. As the boom progressed, net immigration fell and stayed low until 2009. This property boom took place under conditions of generally high (and rising) interest rates.

The second property boom got underway in 2011 at the end of a near-decade of low net immigration. Net immigration became significantly high only in 2014, well after the beginning of the Auckland property boom. This boom took place in a low (and sometimes falling) interest rate environment. Neither immigration nor interest rates serve as plausible explanations for the Auckland land-price booms.

When we go back in time, we see that net immigration closely reflects a stuttering economic cycle. In 1929‑30, there was significant immigration from Australia, where the global economic depression struck. This was more than two years before the summer of 1930/31 when it struck New Zealand. During the Depression, both immigration and emigration were very low. A construction boom in 1937‑38 restored high levels of immigration, especially workers from Australia.

New Zealand’s post‑war immigration peak was in 1952‑53. Immigration was also strong in the early 1960s and early 1970s. Robert Muldoon became Finance Minister from early 1967 to late 1972. Difficult years for New Zealand gave way to good years.

It is true that net immigration collapsed in Robert Muldoon’s first trimester as Prime Minister. This is when many later post-war baby-boomers (born in the 1950s) took the opportunity to enjoy their OE, while New Zealand got the world recession later than most other countries. Many of these people came back during Muldoon’s third term government, from 1981 to 1984. In those years New Zealand was continuing to liberalise (many liberal reforms – such as divorce laws, shop-trading hours, and open information – took place then). These were the years when returning New Zealanders contributed to growing movie-making, information technology, and restaurant-café growth. They were also years when New Zealand looked very pleasant from Thatcher’s new Britain and America’s experiment in Reaganomics.

Net immigration was negative during the period of the Lange-Douglas Labour government, a period of rapidly growing house prices despite emigration and high interest rates. Immigration resumed in 1991, when Australia had its financial crisis (ours began in 1987). Rising immigration in the mid‑1990s coincided with another residential property boom, though probably did not cause it. (Rising income and wealth inequality is in fact the root cause of land-banking mania. 1985 to 1995 was the period in which New Zealand transformed from an equal to an unequal society.) The late 1990s saw a general economic stasis, with changes in China and the USA eventually facilitating the growth boom of the 21st century.

New Zealand is a migrant nation. Immigration and emigration have always featured strongly in its economic and social history. Recent events are no exception. However, while New Zealand has a high population turnover, most people who have identified as New Zealanders remain Kiwis at heart.

What of the 2020s? I think that, for New Zealand, they will prove much like the 1920s. New Zealand will stutter as the world economy slowly implodes.

Analysis by Keith Rankin

This month’s chart shows that the performance by the Tories in the UK election was not at all bad. With a 42.34 percent share the Tories performed dramatically better than they did just two years ago (36.82%). Their nadir was in 1997, at 30.69%. Labour, of course, surged even more, gaining a 39.99% vote share; a share that, in New Zealand, Andrew Little could only envy.

This swing away from the nationalist parties (UKIP and SNP) was always going to happen. The nationalist tide is going out, and the Tories are securely in power in the UK until 2022. Jeremy Corbyn – human being rather than Crosby/Textor robot – is already older than Michael Joseph Savage was when he became New Zealand’s Prime Minister. Corbyn will be 73 in 2022 and 78 in 2027; by no means too old (cf. Pope Francis) but nevertheless an unlikely Prime Minister from 2022. More importantly, Corbyn’s presence and prescience may help shift the locus of western politics away from the public-austerity hole that liberal-democracy fell into.

In the absence of proportional representation, the Brits are realising that it’s a waste of time voting for a candidate who can come, at best, third in a constituency contest. They are adopting DIY (do-it-yourself) preferential voting; as New Zealanders have done in Epsom and Ohariu. The LibDems won seats where they were genuine contestants, despite their share of the nationwide vote continuing to fall. Only in Scotland did Labour people refuse to support their sitting SNP representatives, allowing many of these constituencies to claimed by Tory candidates, thereby denying Labour a historic opportunity to form a government.

Who would have thought that Labour could ever win in Kensington and Canterbury? Who expected decayed Middlesbrough and Stoke to switch the other way, from Labour to Tory? Votes for no-hoper candidates dropped substantially. Millennials – Brits in their twenties – became participants in the democratic process; unlike, in the 2000s’ decade, the now 30-something children of the baby‑boomers. Unpolled (until the exit polls) millennials took their “don’t forget us” votes with them, from the grit of Staffordshire and Teesside to the squats of London.

The shift to two-party politics happened in Northern Ireland too, with Sinn Fein nearly doubling its number of stay-in-Ireland MPs. Thanks to Sinn Fein, there are now only 642 effective MPs (deducting 7 Sinn Fein, plus the Speaker). The Tories in England and Northern Ireland have 327 of those, with the maximum opposition tally being 315. If the DUP (Northern Ireland Tories) abstain from any vote, it’s still 317 to 315, enough for the Tories to keep governing. If on some socially liberal measure, the DUP vote against the UK Tories, then the required votes will be found elsewhere.

We in New Zealand have had stable minority governments since 2002. I see no reason why governance in the UK will be much different, despite a mainstream media that struggles to make sense of twenty-first century realities and insecurities.

In 2001 UK voter turnout was 59.4%; it’s now 68.7%. Then the Tory Conservatives gained only 18.8% of enrolled voters (Labour 24.2%). In 2010, when the only possible outcome was a Tory-led government, the Conservatives got just 23.5%; Labour only 18.9%.  In 2017, however, the Conservatives got 29.1% of enrolled voters (Labour 27.5%).

I don’t see anything in the UK experience that suggests there will be a similar surge to Labour in New Zealand. Rather, all I can see is a pro-austerity anti-immigration platform, quota politics, a Green Party leaving the vacancy in the new-centre (the place where the Greens should be standing) to TOP (the new Opportunities Party), and an unwillingness from Labour to engage with the Māori Party.

The UK election was an interesting and positive portent for new politics in the 2020s. I expect New Zealand’s ‘really interesting’ election will be in 2020, not 2017. New Zealand needs new Labour, not ‘New Labour’.

The big unnoticed story of last Thursday’s Budget is the increase in New Zealand’s quasi Universal Basic Income (UBI), from just under $175 per week ($9,080 per year) to precisely $195 (annual $10,140).

It’s actually particularly pertinent that Stephen Joyce acknowledged, by including these ‘tax cuts’ in his ‘family assistance package’, that ‘raising the tax thresholds’ represents in fact a form of benefit increase. I call the unconditional benefit that is embodied within our tax scale, the Public Equity Benefit (PEB).

(I claim naming rights because nobody else has bothered to name this unconditional benefit that is implicit within traditional graduated tax scales. Also, the name ‘Public Equity Benefit’, which embodies the visionary concept of public equity, offers much more for the future than the prosaic alternative name ‘personal tax credit’. Language matters.)

From the chart, we can clearly see that the PEB is not a true UBI. Persons grossing less than $70,000 per year do not get the full amount. However, we can say that most people grossing less than $70,000 do receive some conditional cash benefits which, when added to their unconditional PEB, take their total weekly benefits to $175 (or more).

In a fiscal sense, the cost of topping up so that all adults’ unconditional and conditional benefits total at least $175 per week is minimal. (An interesting case, however, affects my teenage son. He receives a ‘student loan living allowance’ which represents the same amount of cash as a student allowance. In the future, he will be required to ‘pay back’ his quasi student allowance, by means of a tax surcharge. The logic of universal unconditional benefits requires that ‘student loan living allowances’ should be no more subject to being ‘paid back’ than the unconditional Public Equity Benefits which all salary/wage earners receive.)

An important feature of the 2017 Budget is that, in line with the announced increase in the unconditional PEB to (upto) $195 per week, there have been significant increases in income-tested cash benefits – Family Tax Credits and Accommodation Supplements – to many of those people who have been short-changed by present anomalies in these benefits.

The 2017 Budget represents a significant step towards the inevitable acceptance of a genuinely universal ‘basic income’. Once this conceptual milestone has been achieved, we will then be able to understand that inequality and poverty are largely a consequence of the present tax rate (33%) and the present ‘universal’ basic income ($175 per week) both being too low.

Raising the weekly ‘universal’ basic income to $195 is a handy first step towards reducing inequality without resorting to increased ‘redistribution’ (and all the tragic bureaucracy that targeted redistribution entails).

While reading a news-site recently, I caught a link to the following from ancestry.com: Do You Come From Royalty? While the article itself doesn’t actually mention “royalty”, it’s true that many people wonder if they are descended from someone famous or infamous (or both); say King Henry the Eighth, or King Edward the First (who reigned in 1300).

To determine whether you are descended from royalty, you don’t have to subscribe to Ancestry. Just do the maths. King Henry reigned 17 generations ago, while King Edward goes back 25 generations. It turns out that, 17 generations back each of us has 131,072 ancestors; 25 generations back we have 33,554,432 ancestors. (Of course most of these will not be unique ancestors, especially given that Britain had a reproductively active population in the year 1300 of about one million people, and that most New Zealanders have substantial British ancestry.)

My chart shows that, while the chance of an ethnically British person being descended from any given reproductively active British person in King Henry’s time is about four percent, the chance of being descended from any given such person in King Edward’s time is 100 percent (actually, a probability of one, rounded to 15 decimal places). Most of us will have King Edward – and most of his subjects – multiple times in our family trees.

The demography of the United Kingdom, the tangata whenua of Ngāti Pakeha, is of interest to all of us. I caught this chart (from chartsbin.com/view/28k), but it uses the wrong scale, as far too many of our published charts do these days. This scale problem is most significant with charts covering long time periods, and it leads to an exaggeration of the importance of recent data.

My chart uses the same data (extended to a population of 64 million in 2013), but uses a log-2 scale. This means that it shows doublings of population, rather than five-million-person increments.

Many demographic blips are missed in the early centuries, because estimates are very far apart. For example, it is likely that there was a significant population fall after the Romans left Britain in the fifth century.

What we do see is an acceleration of population growth in the (known-to-have-been) warm centuries at the beginning of the second millennium, followed by a huge decline mid-fourteenth century. This decline was the Black Death, which some of us will remember as the initial setting for Vincent Ward’s 1988 New Zealand time-travel Odyssey, The Navigator. (This movie might be due soon for a scheduling on Māori TV.) This plague is widely understood to have been a Malthusian crisis in Europe, an event triggered by pathogens arriving from Asia, but ultimately due to a mix of climate change and overpopulation relative to the economic capacity of the era.

The next population rise represents the impact of the transition to capitalism, the renaissance, and the first period of globalisation which began in the late fifteenth century. This higher growth rate continued in the United Kingdom until about 1800, interrupted mainly by the Civil War of the 1640s. It was in 1798 that Thomas Malthus published the first edition of his seminal ‘Essay on the Principle of Population’. This was in response to a widely-held viewpoint that population growth – virtually unlimited at then historical levels – was sustainable and beneficial to economic progress.

On the face of it, Malthus’ timing was very bad. Population growth accelerated sharply over the next decade or so, the early years of the industrial revolution. There are three main reasons for this acceleration. First, the growth of fossil fuels, as coal displaced (depleted) wood as an energy source. Second was the widespread adoption of the potato, a product of globalisation that originated in South America. Third was the incorporation in 1800 of Ireland into the United Kingdom.

In the middle years of the nineteenth century – the 1840s in particular – the United Kingdom experienced its second main Malthusian crisis of the millennium. The potato famine in Ireland combined with pandemics of cholera and tuberculosis in England, peaking in 1848 (although tuberculosis remained the number one scourge well into the twentieth century).

Recovery from Malthusian doom was due, this time, to the huge expansion of land inhabited by British (and other European) people. It was the beginning of the growth of the Neo-Britains such as New Zealand; the growth of the ‘anglosphere’. This expansion of British settlement helped population to grow rapidly within the United Kingdom. Food became much cheaper during this second era of globalisation, dating in essence from around 1850. Traditional large families suffered fewer deaths after 1850, and the British were much slower than the French to adopt contraception.

The chart shows that, in the United Kingdom at least, population growth slowed substantially in the twentieth century. World War 1 was part of this; indeed, it could be argued that this war was the third great Malthusian crisis of the second millennium. Overpopulation relative to global carrying capacity in the 1910s was very real, as the gains to British people from British expansion were surpassing their natural limits.

From the 1920s we had the new opportunities offered by electricity, oil and natural gas, antibiotics, and chemical syntheses of products that mimicked natural ones. (Important here in a New Zealand context is the role of topdressing fertiliser on pastoral farmland.) The result was another substantial increase in the carrying capacity of the world, including the United Kingdom.

Many of us sense that the next Malthusian crisis may be only a decade-or-so away. The good news is that the economic, accounting and technological ideas that may lead to the next post-Malthusian recovery are also present in today’s ‘outsider’ intellectual environment. The lesson of history, however, is that humankind will probably need to experience a substantial economic and demographic crisis before necessary solutions are actually adopted. During the 2020s, wilful blindness and alternative falsehoods will continue to prevail.

From 1979 to 1999, male and female net immigration were roughly on par; 11,000 males and 21,000 females over those 21 years. (Gross immigration was of course much more; these low net figures reflect high levels of emigration from New Zealand.)

From 2000 to 2016 – 17 years inclusive – there was a net inflow of 34,000 males and 157,000 females. Females prevailed every year except 2001, 2004, 2008, and 2015. While an important driving factor for the net data this century is less male emigration, other figures show that gross passenger movements of females exceeded males by 13,000 in 2016. In all other years from 1979, gross passenger movements favoured males by at least 86,000. In 2011, male passenger movements exceeded female passenger movements by 316,000.

I am surmising that large numbers of returning male New Zealand citizens are bringing foreign-born partners with them. And I suspect that many more females than males who initially came as students are gaining New Zealand residency, and staying on in New Zealand. This probably reflects the high success rates in education in New Zealand of female international students. (We might note here that recent net passenger movements of Chinese residents show a substantial excess of females – both arriving and departing – reflecting patterns that were established for Japanese and Korean residents from the mid‑1990s.)

It’s also interesting to note the high birth rate in New Zealand compared to many other countries. One of the most important contributions to new New Zealand demography is the numbers of children born in New Zealand to foreign‑born mothers. These children – authentic Kiwis – are certainly changing the face of non‑indigenous New Zealand.