Diffusing New Zealand’s looming race bomb.

In a feature article in last month’s Press (“steady as she goes,” September 15, D3, not online) Helen Clarke is quoted as saying National have “policies which dare not speak their name.”

Clarke does not elaborate on what sort of policies she is referring to, but her cryptic comment suggests these “policies” include National’s approach to race issues.

In 2004 National leader Don Brash tried to start a serious debate on current race relations between Maori and European New Zealanders when he argued in his Orewa speech that it was unsustainable for European and Asian New Zealanders to continue to subsidise a growing Maori population.

However, following National’s loss in the 2005 election, and the replacement of Brash with the Cameronesque PR man John Key, race was quickly swept back under the carpet.

Although Brash deserves some recognition for mentioning a difficult and important issue, the right liberal policies he prescribes are probably a maladaptive solution to the problem.

The main issue with race in New Zealand is arguably not poor race relations or race-based policies, as Brash claims, but a pervasive inability to acknowledge demographic imbalances.As the current ethic strife countries such as Lebanon, Israel, South Africa and France illustrate, different rates of demographic growth between races and cultures often lead to serious conflict.

Over the last hundred years, the Maori population has been growing at a faster rate than the European population, yet has been consuming a disproportionate percentage of taxes.

Despite, efforts to address historical grievances over land confiscations and the marginalisation of Maori culture, Maori still lag behind in terms of income, health outcomes, unemployment rates and education levels, as well having higher imprisonment rates. Added to this is the fact that the country’s growing Polynesian population also consumes a disproportionate share of health and welfare spending.

The response of both Labour and National over the past 17 years has been to increase immigration of educated workers from Europe, India and East Asia to expand the overburdened tax base.

Unfortunately, increased immigration has been a double-sword. Higher housing costs have meant fewer Maori and Polynesians have been able to afford to homes, thus increasing their dependency of welfare, and more European New Zealanders have left overseas, in part, because wage rates have failed to keep up with the increased cost of housing and education.

While Australia, Canada, and the United States also have problems with economically under-performing indigenous populations, their indigenous peoples form a much smaller percentage of their populations, so they are less of an economic burden.

With an aging white population increasingly dependent on the state for health and pension spending, there is likely to be increasing pressure on the government to reduce spending on low-income families at a time when Maori politicians are making increasing demands on the government to increase such spending and reduce immigration.

This situation puts the limited immigration supporting New Zealand First Party in a difficult position. Although rising commodity prices are making immigration restrictionism more economically justifiable, the country’s multi-cultural divisions appear to be acting as a significant break on productivity.

Money that previously went into long-term infrastructure development and research and development programmes is now going into such things as increased spending on law and order to manage an increasingly diverse population which is unable to manage itself.

At the global level, the majority of countries with high productivity rates, such as Korea and Japan, tend to be either culturally homogenous or, like the United States, are large enough to compete on economies on scale - New Zealand can’t compete under either criteria.

In the long run, the only solution out of this bind may be political union with Australia. In a combined Australian/New Zealand state, the Maori population would be less of a demographic threat to a European population of over 20 million, while New Zealand would not need to worry so much about skilled workers moving across the Tasman. Similarly, there would be less of an economic argument in favour of increasing immigration in order to expand the tax base.

Sadly though, it’s unlikely there is going to be any serious debate about this issue until the baby boomer generation starts retiring in about 5 years - by which time the government will be in a more fiscally desperate situation.