TheAustralianPopulationResearchInstitute,ResearchReport,October2018

WhyDoWeHavea‘BigAustralia’?

StephenSaunders

TheAustralianPopulationResearchInstitute<tapri.org.au>POBox12500MiddleCamberwellVictoria3124Australia

Reportauthor

StephenSaundersisaformerpublicservantandconsultant.TheAustralianPopulationResearchInstitute(TAPRI)isanindependent,non-profit,researchorganisation.

ThankstoBobBirrell(mobile0413021126)andKatharineBettsofTAPRIforcommentsondraftsofthisreport.

ArticlespublishedbytheAustralianPopulationResearchInstitutemayberepublishedprovidedtheinstituteanditswritersareappropriatelycredited,andalinkismadetoourwebsite<tapri.org.au>.

Anyarticlesreproducedcannotbeeditedoranymaterialsoldseparately.

WhyDoWeHaveA‘BigAustralia’?

StephenSaunders

Executivesummary.....................................................................................................................i

Introduction:raisingpopulationgrowth....................................................................................1

Ourpopulationgrowthisexceptionalforarichnation..............................................................1

Highpopulationgrowthisnotmandatedforhighprosperity......................................................2

BipartisanpopulationstrategyhasentrenchedBigAustralia.....................................................3

TreasuryandgrowthinaggregateGDPdriveourpopulationpoliciesandprojections................4

Thepopulationgrowthlobbyprevailsoverenvironmentandelectors.......................................5

Environmentandelectorsareputatadiscount...........................................................................6

Thestatescovet,butunder-service,highpopulationgrowth.....................................................7

States’servicesfallshort..............................................................................................................8

Housingunaffordabilityhasbecomesevere.................................................................................9

‘Decentralisation’isthefondhope.............................................................................................10

Highpopulationgrowthdistortsoureconomicfutures............................................................10

BigAustraliadistortsfutureequalityconsiderations..................................................................11

BigAustraliadistortsfutureeconomicconsiderations...............................................................11

Conclusion:loweringpopulationgrowth..................................................................................12

CappermanentmigrationandreelinNOM...............................................................................13

Movetoapopulationpolicyoflessthan1percentgrowthannually........................................13

Budgetforpopulation’slonger-termcostsasrigorouslyasforitsshorter-termGDPboosts....13

Realignourpopulationtrajectorywiththeenvironmentalconstraints.....................................13

Inthenationalinterest,establishaproperpopulationdirectorate...........................................14

Controlthetemporaryskillshortageentries..............................................................................14

Movebeyondthe‘borderprotection’boasts.............................................................................14

References...............................................................................................................................15

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Whydowehavea‘bigAustralia’?

StephenSaunders

Executivesummary

Inpart,thisreportwaspromptedbyacasestudyofAustralia’s2011SustainablePopulationStrategy.Afteranimpressiveprocessandattractiveproduct,thenotableeffectwasanincumbentgovernmentre-endorsingthepreviousgovernment’sbigboosttomigration.

Henceaquestion,arethereunderlyingsocialoreconomicfactorswhichtendtoperpetuateacross-party‘BigAustralia’?Theanswermustbe‘yes’.Thisreportarrangesthereasonsforthisresponseundersixbanners.Inshort,theseareAustralianexceptionalism,populationstrategy,Treasury-GDPdominance,thegrowthlobby,states’compliance,andeconomicbiases.ThemainbanneristhattheTreasurypursuitofGDPgrowthdominatesourpopulationpoliciesandprojections.

Australianexceptionalism

Australia’spopulationgrowthrateismuchhigherthanworldorOECDnorms.OverseasandinAustraliaenvironmentalpoliciesfocusonclimatechangeandnotpopulationgrowth.Nevertheless,globallyitappearsthatmorenationshavepoliciestolowerratherthantoraisepopulationgrowth.Conversely,Australiaandcertainotherdevelopednationsaregoingforraisedgrowth.ButtheAustraliandiscourseglossesoverourexceptionalpolicyshift.Our21stcenturypopulationspurtisdefendedasinevitableornormal.Amongtherichnations,however,prosperityandlivingstandardsarenotpredicatedonhighpopulationgrowth.

Populationstrategy

TheBring-out-a-Briton‘PopulateorPerish’policywasafeatureofthepostwarreconstruction.Immigrationlevelsrecededoverthe1970s-1990swhiletheneo-liberaleconomicagendaadvanced.Bothmainpartiessupportedthemigrationpushoftheearly2000s.Thiscametobejustifiedvialabourshortagesoftheminingboom.Followingthegovernment’slead,TreasuryandthePrimeMinister’sDepartmentsteeredthe2011PopulationStrategyawayfromourhighpopulationgrowth.Thisevasionhasoutlivedtheminingboom,andcontinuestothepresentday.Immigrationremainshighand,untilrecently,seldomquestionedordiscussed.Our21stcenturypopulationsettings,deemedcriticalto‘GDPgrowth’,areremovedfromthepoliticalcontest.

Treasury-GDPdominance

TheGrossDomesticProduct(GDP)measureisrelativelyrecent.Itbeganitsirresistibleriseinthe1940s.Despiteeconomists’reservations,andrevisionefforts,theusualGDPformulationgovernsAustralianandotherbudgets.Inadefaultsenseonly,ourpopulationpolicyresidesintheTreasuryandisdedicatedtosupportinggrowthinaggregateGDP.Thoughour27-year‘EconomicMiracle’ofuninterruptedgrowthinGDPcontinues,thisgrowthisnowflatterandtheunderlyingcontributionofpopulationgrowthisvitaltoit.Largeclaimsaremadefordemographicandeconomic‘rejuvenation’throughBigAustralia.Thecrucialmigrationandpopulationplans,however,onlyappearas‘technical’parametersatthebackofthebudget.Ournational,state,andcityplanssimplyassumehighpopulationgrowthfordecadesahead.

Thegrowthlobby

Over1972-2006,ourpopulationgrewbyanaverageof210,000ayear.Butthataveragehastopped375,000,overtheyearssince.1AcrossthepoliticalspectrumadiversecoalitionbacksthisGDP-driven

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populationpush.Politicalparties,Treasury,theReserveBank,States,andindustryareprominent.‘Progressive’or‘green’voicestendtoalignwiththisdominantgroup.CountervailingscientificconcernsaroundourcarryingcapacityandStateoftheEnvironmentareatadiscount.Todaytheelectorateisshyingfromthedominantprogramofdemographicgrowth.Buttheirlegitimateconcernstendtobesidelinedorpatronisedbythepro-growthcoalition.

States’compliance

ThefederalbudgetgetsthemainGDPboostfrompopulationgrowth.Statesandcities,whilealsouppingtheirGSPs(grossstateproducts),pickupthetabforinfrastructureandservices.Thestatesareenthusiasticaboutpopulationgrowthbuttheircitizenscouldbeforgivenforthinkingthatthetabisshortpaid.Toooften,training,education,ortransportplannersare‘caughtshort’byrapidgrowth.Incongestedcitiesthathavesufferedworld-rankinghousingunaffordabilitymanysolutionsareonthetable–afterBigAustraliahasbeentakenoffthetable.Cityplansformid-centurybeginbynearlydoublingthepopulationandthenassumingthatothervariableswillfitin.Sometalkofchannellinggrowthawayfromthecitiesandintotheregionsbut‘decentralisation’hasneverbeenameaningfulsolutionforAustralia’spopulationgrowth.

Economicbiases

Underthelowermigrationofthe1970s-1990sGDPgrowthwasusuallypositive.Sincethe1980s,inequalityhasclimbed.ManyvotersandsomeeconomistsworrythatBigAustraliaitselfworksagainstwages,incomeorwealthequality,andhousingaffordability.Whichistosaythegainstothefewlookmoreassuredthanthegainsforthemany.Benefitstotheolderlookmoreassuredthanbenefitstotheyounger,ortofuturegenerations.Workingfrominternationalcomparisons,itlooksasthoughmassmigrationmaynotbethego-toprogramtoupdateoureconomyawayfromitsfocuson‘resources-and-services’andtowardsaninnovationeconomy.Nordofederalandstategovernmentsunderwritehonestinfrastructureplanstocoverthehighpopulationgrowth.

Inconclusion,theeconomicandfiscalgrowthmachinesdominateourpopulationpolicyanditspopulation‘projections’.We’veclimbedwellabovetheOECDpopulation-growthaverages.IfBigAustraliadoeslittleforequalityofopportunityorfutureeconomicpathways,whiletheenvironmentandservicesstruggleandelectorswilt,weoughttorevisitthelowerpopulationtrajectoriesthatappliedwithoutharmandnotsolongago.GiventheculturalandhistoricalrootsofBigAustraliathatmaynotbeeasy.Reformwouldmorelikelycomefrompolitical‘circuitbreakers’thanfromthebureaucracy.ThatiswhathappenedinNewZealand.Onepartybrokeranks,promisingtorealignpopulationgrowthwithinfrastructurecapacities.

InAustralia,vigorousbordercontrolpolicycoversforvigorousmigrationpolicy.2TheDepartmentofHomeAffairspursuesbothavenuesatonce.‘Stoptheboats’anddetentionprogramsdistractfromtheBigAustraliapolicy.Themigrationshortfallssince2016-17havebeenattributedtostrictersecuritychecksagainstbiggerandmoreconnecteddatabases.3

Theofficial2017-18intakeofpermanentmigrants,163,000,isstillveryhigh–just10-15percentoffsixyearsofrecordhighs.Thelatestannualnetoverseasmigration(NOM)figuresstandwellover200,000.Shorttomediumterm,theremaynotbeanydeepreflectiononourpopulationpolicy.Nevertheless,it’sjustpossiblethedisconnectionbetweenourpopulationgrowthandourcarrying(andservicing)capacitywilleventuallyproducearealpolicyshift.

Inthat,ourmigrationintakewouldturnbacktowardsthe70,000-90,000levelsof1992-2002.Also,wemightplacethepopulationtabunderaceilingof1percentgrowthayear,budgetforlonger-termmigrationimplicationsalongwithshort-termGDPboosts,reconsidertheenvironmentalconstraintswithaviewtosomethingmorelikea30mpopulationat2050,andestablishaproperpopulationagencywithitsownminister.AgracenotewouldbetoshiftourMigrationandHumanitarianplansawayfromany‘borderprotection’boasts.

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Whydowehavea‘bigAustralia’?

Introduction:raisingpopulationgrowth

Inthe1980s,theauthorcarriedofficialresponsibilitiesforOccupationalDemandSchedulespertainingtomigrantsinthethenLabourShortagecategory.Inthoseyears,theso-calledPopulateorPerishprogram4nolongermotoredalongintopgear.Ournaturalincreasegenerallymatchedorexceeded5theNOM.Whothenwouldhavepredictedtoday’sscenario?Highpopulationgrowthhasresurgedmorethanever.

WhenKevinRuddbackeda‘BigAustralia’,6nominallyhewasjustendorsingaTreasury‘forecast’7ofa36mpopulationby2050.Thefigureofspeechwassoonplayeddownbutthepolicieswhichweresettomaketheforecastarealitywentonunchanged.

Inthispapertheterm‘BigAustralia’istakentomean:AninordinateappealtohighmigrationandhighpopulationgrowthasheadlineandfutureeconomictoolswithlargerregardforGDPgrowthandsmallerregardforenvironmentalandsocialconsequences.

From1992-93to2000-01theintakeofpermanentmigrants(includinghumanitarianmigrants)averaged85,000ayear.Possiblyrespondingtothegrowthlobby,JohnHowardpushedtheintakeuptoover100,000by2002-038andnearlyto150,000by2006-07,asurgebackedbythethenLaboropposition.RuddwasinpowerbyNovember2007,butbyJune2010hehadbeendeposedasPrimeMinisterbyhisdeputyJuliaGillard.Shesaid‘Idon’tbelieveinabigAustralia’9andwrappedupthepopulationreviewtriggeredbyRuddandhisremark.ThoughwehadforatimeaPopulationMinister,TreasuryandImmigrationprevailed.The2011‘Sustainable’PopulationStrategy10containedaparcelofsuburbanandregionalpolicymeasures.ItalsoreaffirmedtheimmigrationandpopulationsurgeLaborhadendorsedwhileinopposition.11Before2007,ourNOMhadneverinhistorytopped200,000.12Now,thisfigureistheverylowestoneusedintherangeofABSpopulation‘projections’.

WhatfactorsmightcontrivetogiveBigAustraliaanenduringtugonbipartisanheartstrings?Mustitalwaysbeacentrepieceinoureconomicfurniture?Doesasecureandprosperousnationhavenootherchoicesandalternatives?Thispaperconsidersthesequestions.

Ourpopulationgrowthisexceptionalforarichnation

Atypicallyamongtherichnations,theAustralianpolicyisforyear-on-yearhighpopulationgrowth,withthecitiesandthelandscapecommendedtofitinasbesttheycan.

Muchliketheworldatlarge,Australiaisfocusedmoreonclimatechangethanpopulationgrowth.Butourhighpopulationgrowthismostunlikethatofmostotherrichnations.

Worldpopulationis‘only’growingaround1percentayear.13Closetoa100nationsareslowergrowing.Evenat1percent,therearedauntingimplicationsfortheworldsof2050and2100.Ratherthanworldpopulationlevellingoffat9-10bnbymidcentury,arecentrevisionsuggeststhepossibilityofcontinuinggrowthto11bnbyendofcentury.14TheUNitselfhassaidsomethingsimilar,inits2017revisionofWorldPopulationProspects.15Despitethis,theUN’s17SustainableDevelopmentGoalsdonotheadlinethepopulationissueitself.16

Inworldpolicy,asinAustralianpolicy,climate-changehasbecometheheadlineenvironmentalissue.Populationitself,habitatloss,landclearing,thesixthgreatextinction,oceanandwatercrises,andenvironmentalpollutiondon’thavethesameurgency.Australianbusinessispreparingforacarbontransitionandnotapopulationtransition.Despitedecadesofgreenhousepolicy,atmosphericCO2concentrationsarestillrising.17Aftera2000sdowntrend,Australia’sofficialCO2emissionscounthasbeenrisingagain.18

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AccordingtoUNWorldPopulationPolicies,19morenationshavepoliciestolowerpopulationgrowthratesthantoraisethem.Butnearlyhalfofnationsinthemore-developedregionsareratedashavingpoliciestoraisegrowthrates,partlyduetolowernaturalincrease.The‘raises’includemorethanadozenEUnations,plusJapan.Nearlyhalfofthenationsintheless-developedregionsareratedashavingpoliciestolowergrowth.

TheUNhasratedAustralia’spopulationpolicyasoneof‘nointervention’,despiteour21stcenturyupturn.Locallytoo,thereislimitedawarenessthatourhighpopulationgrowthisanoutlierinthedevelopedworld.20Nomajorpartysawfittoofferadefinitivepopulationpolicyatthe2016federalelection.Theattitudeisasifourhighpopulationoutcomesemergeself-willedfromtheTreasury‘estimates’andABS‘projections’–whenitwouldbemoretruthfultosaythattheyareactivelyplannedandmanagedbygovernment.TheABS‘projections’arefollowingthegovernment–muchmoresothantheotherwayround.

Gainsaying1990sAustralianAcademyofScience(AAS)concerns(seefurtheron),a2012AASthinktankrejected‘optimalpopulationsize’andsaw‘feweffectivemechanisms’tomanagenationalpopulation.21Actually,thepopulation-managementmechanismsofAustraliaandotherrichnations,ifnotexact,arequiteeffective.Over1972-98,Australiaoftenhadanannualpopulationincrementaround1percentoralittlemore.Anincreaseofover1.5percentwasquiteunusual.Since2006–intentionally-1.5percentormoreiscommon.

Comparedwithmigration,ournaturalincreaseisfairlystableandpredictablefromyeartoyear.ItdidnotrespondthatmuchupwardsuponTreasurerPeterCostello’sBabyBonus.Averagefertilityperfemalesitsjustbelowthe‘replacement’leveloftwoor2.1.Ourplannedmigrationintakeismorevariable,andourNOM.Governmentcanmanagetheformer.Insomerecentyears,immigrationhasnailedthemigrationplantothelastfewthousand.Misseslikethoseof2016-17(3percentofplan)or2017-18(15percent)areunusual.Whensuchmisseshaveoccurredtheyhavepromptedinjuredaccusationsfromthegrowthlobbyofmigrationbeinglowered‘bystealth’.

Asfaraspopulationgrowthisconcerned,NOMnowmattersmorethanthegrossfigureoftheplannedpermanentintake.Thisisbecauseitcountstheoverallsurplusofinwardoveroutwardmovements.Butitsnetfiguretendstotrackthegrossfigureofplannedpermanentmigration.Forexamplein2015-16NOMwas193,000andtheplannedpermanentintake(includingHumanitarian)207,325,andin2016-17NOMwas245,500andtheplannedpermanentintake197,308.Ifyoudoublepermanentmigration,usually,youwillroughlydoubleNOM.

ManagingNOMincludesmanagingthevarioustemporary-entrantcategories,includingStudents,WorkingHolidayMakersandpeopleonbridgingvisasand‘457s’(nowTemporarySkillShortagevisas).VariousreportsgraphtherisingNOMofabout2005-06onwards,ascomparedwithfairlyflatnaturalincrease.22TheaverageNOMfromJune2007toJune2017was222,400,comparedtoanaveragefor1982-2006of100,100.23The2018budgetNOM‘assumptions’sitwellonthehighsideoftheofficialmigrationplanof190,000.

Itmaybesaidthatgovernmentcannot,orevenshouldnot,managepopulation.Butournaturalincreaseisfairlystable,governmentcaneasilyplanthepermanentmigrationvisas,andactualarrivalsunderthispartoftheintakewillusuallycomeinclosetoplan.From1985through2017,tonote,thecalendaryearNOMhastoppedthefiscal-yearpermanentmigrantarrivalsinabout70percentoftheyears.

Highpopulationgrowthisnotmandatedforhighprosperity

Populationgrowth,asitispractisedbyAustralia,isnotnecessaryorinevitable.Bypolicyratherthanbydiktat,IranandThailandsteeredfrom3percentpopulationgrowthperannumdownto1percentandless.24(Iranhassincegonepro-growthagain.)Whileour1.5percent-and-upgrowthratesarenotthose

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ofcertainAfricanorAsiannationstheyarealongwayabovethemajorEuropeanorEnglish-speakingnationsintheOECD.

AroundtheOECDitisusefultodistinguishbetweenpopulationandgeography.Palpably,EUnationsandtheUShaveborderissues,worsethanours.Theyalsohavelowpopulation-growthrates.TheScandinaviannationsarebecomingmoreculturallymixed.Thishascreatedtensions.Theirbudgetmathseemsunlikelytofactorinhighpopulationgrowth.Withinlivingmemory,Australia(now25m)andSweden(10m)havehadnearlyidenticalpopulationsof7-8m.

For50years,GermanyandFrancehavegenerallyhadpopulationgrowth(much)lowerthan1percentayear.Theytoohaverefugeeandmigranttensions.Japanhashadpro-growthpolicies,butalsoloworevennegativepopulationgrowth.ToholdupGDPpercapita,itlookstoindustryandtechnologypathways,andutilisationoftheworkforce.AverageratesofannualgrowthinGDPpercapitabetween1990and2017wereverysimilarforJapan(1.1percent)andAustralia(1.2percent).25AmongOECDcountrieshighpopulationgrowthisnotmandated,forlivingstandardsandprosperity.26

Tokeepitspopulationgrowthtickingoveratrateslikeoursarichnationonlyhastoadoptaprodigalimmigrationpolicy.Already,we’veovertakenthe1998mid-range,or‘SeriesII’,ABSforecastforAustralia’smid-centurypopulation.27Thestrikingimpactofthe21stcenturypopulationpushwasnotforeseenthen.ButthispushhaschangedAustraliaandconstraineditsfutureoptions.

Thequestionis,forwhosebenefit?Inthisreport,themainoutcomeisgrowthinaggregateGDP.Therehasbeenlittleornobenefitforenvironmentortheelectorate.Onthecontrary,therehavebeencosts,costswhicharenotreckonedintheGDPfigures.Forexample,neithertheCommonwealthnorstateshavekeptupdutifullywiththeinfrastructureandservicerequirementsofrapidpopulationgrowth.

BipartisanpopulationstrategyhasentrenchedBigAustralia

Bothmainpartiesbackedtherevivedpopulationpushoftheearly2000s,whichcametobeenshrinedinthe2011SustainablePopulationStrategy,andhasoutlivedtheminingboom.

WhiletheoldPopulateorPerishpolicypredatestherisetoprominenceoftheGDPmeasure,thenewBigAustraliapolicypostdatestherisetoprominenceofneo-liberalism.

In1945,Labor’sArthurCalwellfearedforour‘islandcontinent’28andsoughtsustainedpopulationgrowth.WhilemanyEuropeanrefugeesarrived,Britishtypeswerepreferred.Inthatera,itwouldhavebeeninconceivablethatIndigenouslandrightsandnativetitlewouldeventuallycoveraboutathirdofthe‘empty’continent.Fordefenceanddevelopment,Calwellsoughtanannualrateofpopulationgrowthoftwopercent,halfimmigrationandhalfnaturalincrease.

Thisgrowthpolicycontinued,indeedintensified,upontheLiberalwinof1949.Sometimeafterpostwarreconstructionandthe1950sboom,arethinkorresetmighthavebeenexpected.It’struethatimmigration(asmeasuredbyNOM)29diddecelerateafterahighpointof140,000in1969.

Between1972and1998,butnotsince,NOMwasregularlywellunder100,000ayear(averagingaround81,000pa).30Annualpopulationgrowthwascommonlyaround1percent.In1975,atonepoint,NOMdippedunder15,000.

Bythe1980sguidingneo-liberalpreceptshadtakenwing.Fordiscussionpurposes,lettheseincludeideassuchas‘free’tradeandmarkets,assetsalesor‘recycling’,lowergovernmentspending,deregulation,privatisation,andausterity.Australianpolicymakersonbothsidesofnationalpoliticswelcomedelementsoftheseprecepts.NeoliberalismimpactednotjustontheCommonwealthgovernmentbutalsoimpactedonthestates(seefurtheron).Ifanything,theneoliberalagendaservestoencouragepopulation-andconsumption–thetwinfuelsofoptimismamongbusinessinterests.Itdoeslittletoencourageexaminationofthedistributionaleffectsofpopulationgrowth.Thepushtore-inflatemigrationbeganas

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earlyas200031andreallybitby2005.Atthattime,theLaboroppositionleader(KimBeazley)wasaself-confirmed‘highimmigrationman’.32Histhenopponent(JohnHoward)haslabelledhimselfidentically.33Pressedbytheminingboom,bothgovernmentandoppositionwereunitedonthe‘economicneed’formoremigrants.Thiswassaidtobeduetolabourshortagesandtrainingshortfalls.Theoppositionruedfallingcompletionsamongtraineesfortrades.Governmentpromisedmoremoneyfortechnicalcolleges,TAFE(TechnicalandFurtherEducation),thatis.

WritingwithKathleenMackie,thepresentauthor34sawtheRudd-Gillardpopulationreviewof2010-11asentrenchingatwo-partyaccordforrisingpopulationgrowth,drivenbythepursuitofgrowthinaggregateGDP.Though‘robust’migrationwastobeassumed,governmentalsoclaimeditcouldn’t‘predictordirectlycontrol’population.Theideaof‘carryingcapacity’wasrejected.

Perhapsmirroringtheeuphemismof‘climatechange’for‘globalwarming’,ministersfromtheoutsetspokeofpopulation‘change’and‘regionaldifference’.Treasuryofficialsweresecondedto,whatwasnominallyanEnvironmentDepartmentreview,andthendominatedit.Thereviewoverlookedthemajorpolicyshiftbythepreviousgovernment–alargeincreaseinplannedmigrationandaneardoublingoftheNOMfigures.Usefulinternationalcomparisonswereeschewed.TheIssuesPapershirkedtheissuesandthePrimeMinister’sDepartmentmassagedthefinalStrategy.

Thisunprecedented21stcenturypopulation-drive,withannualpopulationgrowthof1.5percentorhigher,hasnotbeendebatedorcontestedatrecentfederalelections.Norwasitinterruptedbythe2008GFC,orthewind-downoftheminingboomafter2012.From2012-13throughto2018-19,plannedpermanentmigrationvisashavebeenseton‘autopilot’at190,000ayear(ormorethan200,000whentheHumanitarianProgramisincluded).Actualarrivalshaveusuallyfollowedsuit.Therecentshortfallsaresurprising.

TreasuryandgrowthinaggregateGDPdriveourpopulationpoliciesandprojections

Inamannernotforeseeableseventyyearsago,GDPrequirementshavebecomethemaindriverofAustralianpopulationpoliciesandprojections-atnational,state,andcity,levels.

TheGDPconceptwasfarlessdominant,when‘PopulateorPerish’becamepolicyin1945.Now,thepursuitofgrowthinaggregateGDPdrivesourpopulationpoliciesandprojections.Andviceversa.

Calwellhadaddressedthepopulationquestionsoonafterthe1944BrettonWoodsmonetaryconference.Thiswastosetthe‘Kuznets’GDPonitsrapidcoursetobecomethe‘onestattorulethemall’.PostGFC,JosephStiglitzurgedashiftfromGDP‘fetishism’.35RobertGordonhasnotedtheflawsofGDPincapturingepochalUStechnologyandconsumershifts.36ButgrowthinrealGDPperpersonisstillhisbasicindicatorofimprovementsinlivingstandards.DianaCoylefearsGDPisproblematic,fora21stcenturyeconomyofinnovation,servicesandintangibles.37

Majorpowers,andthenquiterecentlyNewZealand,38havemadeeffortstoparlayGDPintofairerandgreenermeasures,ofeconomicactivitiesandcommunitywellbeing.ForothersgrowthinaggregateGDPhasbecomeanendinitself,ratherthanbeingoneofanumberofusefultoolstogaugetheeconomy.

Australiaboastsofan‘EconomicMiracle’nowyielding27yearsofGDPgrowth.A2003(ProductivityCommission)Miraclespeechdoesn’tdwellonpopulationgrowth.39PostGFC,JohnFosterclaimedtheMiraclewas‘highlycorrelated’withoutput-growthpercapita,notpopulationgrowth.40Whichlatterwemightwell‘stabilise’inviewofourfragileenvironment.

Bydefault,populationpolicy(whichistosaypopulationgrowthpolicy)residesintheTreasury.But‘population’isnotamajorpolicytopicontheirpublicwebsite.Nordotheyoffersubstantiveexplanationsofthepolicy.TheABS,however,documentsthepopulationoutcomesandtrends.Also,themigration

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programinHomeAffairshasgooddocumentationandastatedpurpose–‘tobuildtheeconomy,shapesociety,supportthelabourmarketandreunitefamily’.41

TheHumanitarianprogram(whichincludesrefugees)andprovidespermanentvisasiscountedoverandabovethegeneralpermanentMigrationprogram.Thiscenturythefirsthasnotkeptpacewiththesecond.TheHumanitarianintake,atlessthan20,000ayear,is1/10orless,ontopofcurrentpermanentmigrationorindeedofNOM.Richnations’humanitarianintakes,viatheUNHCRorotherroutes,areeversmall,ascomparedwiththeglobalmillionsofdisplacedpeople,manyoftheseinNearEastorAfricancountries.42

Governmentsinthemore-developedregions,asUNWorldPopulationPolicieshasalsoreported,aremuchmorelikelytobeworriedabout‘populationageing’thanaboutdisplacedpeople.Thus,Australiamightclaimthathighermigrationcanmanageitsagepyramidtowardmuchgreateryouth.TheReserveBankbacksthisclaim.43VariousProductivityCommissionreportsquerythelastingeffectsandtheoveralleconomicbenefitsofthis‘rejuvenation’.44Atthebaseoftheagepyramid,theBabyBonusdidnotachievea‘threechild’effect,astheTreasurerhadjested.

Withinthepermanentintakefrom1982to1997,butnotsince,Family-reunionmigrationdominatedSkillmigration.Since2011-12,SkillhastoppedFamilytwotooneorbetter.45But‘Skill’nowreferstowell-suppliedprofessions,muchmorethanskillsincurrenthighdemandwithemployers.46At2017-18,NationalSkillShortageswerenotinprofessions,butbuilding,auto,andtechnicaltrades.47Moreovermorethanhalfofthe‘skilled’permanentintakearesecondaryapplicants—spouseanddependentchildren.48Theyhelpboostthenumbersbutmaynotaddtoskills.

The‘buildtheeconomy’objectiveofimmigrationremainstrue,atleastinthesenseofpopulationboostingGDP.Over2005-13,ourannualpopulationgrowthrateof1.7percentisthehighestintheOECDapartfromLuxembourgandIsrael.49Similarpopulationsettingshavepersistedsince2013.

Ourmigrationandpopulationplans-criticaldeterminantsofanestimated3percentGDPgrowth–onlymaterialiseastechnical‘parameters’atthebackofthethirdBudgetPaper.50Here,NOMsof235,000(calendar2018)and231,000(2019)areassumed.Theresultingpopulationestimatesimply1.6percentpopulationgrowthfor2018over2017,2019/2018.

Thesemigrationhighshaveabsorbedfriendlyfire.ItturnedoutthattheHomeAffairsMinisterhadcanvassedaminorcorrectionwithpublicservicemandarinsandsomecabinetcolleagues.51Later,theTreasurersmotheredasuggested80,000cut.52Theunchangingmigrationplanof190,000ispresentednowasa‘ceiling’andnota‘target’.Toitweshouldaddaround15,000offshorehumanitarianmigrants.53Itremainstobeseenhowthisimpactsonthe2018NOMresult.

Highpopulationgrowth,indecadesahead,isstillgenerallyassumedinthenationaleconomic(orTreasury’sfive-yearly‘intergenerational’)reports.ThecurrentABSmid-range‘projections’forthemidcenturyaresimilartoorhigherthanthe36mofRudd’stime.Similarly,stateandcitypopulation‘projections’commonlytakeforgrantedthenationalplans(seefurtheron).

Thepopulationgrowthlobbyprevailsoverenvironmentandelectors

Goingacrossthepoliticalspectrum,abroadcoalitionforBigAustraliaprevails,overridinganyenvironmentalimplicationsorelectorateconcerns.

Sofar,theGDP-dominatedapproachtopopulationpolicyprevails.SupportforthisBigAustraliaisbipartisan,withreflexivebackingfromTreasuryandtheReserveBank.Othercentresofinfluentialsupportincludestateandcitygovernments,industry,thedevelopmentorpropertylobby,media(tosomeextent),manyacademicsandprofessionals,theAustralianCouncilofTradeUnionsandvarioussocialandreligiousorganisations.

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Thisisaloosegroupingfordiscussionpurposes,butitcanoperateasacohesivegroupinreallife.Acompactofindustry,unions,socialandmigrantservices,averredthatthepost-2011migrationlevelswerenotforturning.54The2017-18‘shortfall’inthepermanentintakeisnottotheirliking.

SupportersofpopulationgrowthmaybemotivatedbyadesiretoboostGDPgrowth-orsimplybyprofit.Othersupportersmaybemotivatedbyaperceivedpublicinterest,forexampleadesiretoincreaseculturaldiversityandsupportmulticulturalism.Similarly,the(advertised)motivesofthepoliticalpartiesmayleantowardeconomicgrowthandindustry,orsocietyandjustice.WhiletheLiberalandLaborPartieshavelongbeenpro-populationgrowth,uptothe1990s,theGreensofferedmoreofanalternative.Now,candidatesfromallthreepartiesseemtobemorepro-immigrationthanthevoters.55

Themediacoverageofthe2018budgetdidnotunpackthecrucialmigrationandpopulationsettingsfor‘GDPgrowth’.Stategovernmentreactions,whileconcernedwithwhat‘their’stategot,alsofitthisframe.However,asperthereferenceshere,theAustralianmediadoesofferbroadcoverageofsocialandeconomicissuesaroundpopulationgrowth.Bothcommercialandnon-commercialagenciesmayrunstronglycontraryeconomicopinionsonpopulation.56Such,however,maybeoffsetbytheeditorialorbyotherpieces.57

Graduates,academics,andcertainprofessionals,leanmoretowardsimmigrationthandoestheaveragevoter.58It’snotthatsurprisingifeconomistsordemographerswillcommonlyendorsehighpopulationgrowth.Urbanplannershavealreadypositionedthemselvesforthenational‘journey’to50mafter2061.59Notuncommonly,naturalandsocialscientistsbowto,or‘workaround’,thegovernment’shigher-populationpolicy,beingaversetochallengingitopenly.Inpracticaleffect,both‘progressives’and‘greens’aremorelikelytoalignwiththehigh-growthpolicies,ratherthanwithenvironmentalorelectoralconcerns.

Environmentandelectorsareputatadiscount

‘Mainstream’economicshasrevivedquestionsofpowerandequality,butithaslesstosayaboutpopulationgrowth.60Theenvironmenthasbeenabsorbedinto‘environmental’accountingandeconomicswhereittendstovanishfrompublicview.Inthedecadeto2015-16,itwasreckonedthatAustralia’sGrossValueAddedgrew28percentin‘chainvolume’terms,asagainstgrowthinwastegenerationof23percent,populationgrowth16percent,energyconsumption6percent,andgreenhouseemissionsminus13percent.61Whilethislookslikeaneconomicgrowthpatternlessdependentonresourceconsumption,itiswasteandpopulationintensive,andcongratulationsshouldbetemperedagainstthesoberingStateoftheEnvironment(SoE)reportsdiscussedbelow.

Uptoandincludingthe1990s,Australiamadedeterminedeffortstogaugeits(all-time)carryingcapacity.Thatis,thereasonablelimitsonpopulationandexploitationsoasnotto(further)degradetheenvironment.Therewasaparliamentaryinquiry62andanAASsymposium.63Thelatterputourcapacityaround23matthe‘low,stableend’.TimFlanneryventureda‘realisticmaximum’of20-30m,thoughthiswasnotthe‘wholestory’.64The23mishistory.Wehavealreadyhit25mandcurrentABS‘projections’putusover30matorbefore2030.

Inpurelybio-geographicterms,those1990sestimatesweregenerous.But‘carryingcapacity’,inthesepreciseterms,hasgoneofftheradarinmorerecentyears.Independentscientificviewsmaystillbefound,forexampleintheofficialfive-yearlySoEreports.Thesereportsimplythat,ifwinningsomebattles,we’renotwinningthegreenwar:‘ThemainpressuresfacingtheAustralianenvironmentin2016arethesameasthosereportedinSoE2011,climatechange,land-usechange,habitatfragmentationanddegradation,andinvasivespecies’.65Theinclinationtouseaccountingmanoeuvresasregardsland-usechange,tohelpusbridgeourinternationalcommitmentsasregardsclimatechange,shouldbenotedhere.66

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CommunitypreferencesaroundBigAustraliahavefluctuated.A1997parliamentaryreport67claimed‘consistentmajoritysupport’forlowermigration.Supportforlevelorhighermigrationappearedtobestronger,over2001-2009.68By2015,surveysindicatedthatahalfofusdidn’twantmorepeople,orthoughtthatAustraliawasgrowingtoofast.69

At2017,theresident-basedScanlonsurvey70stillhadlessthanahalfofuswantinglowermigration.Buta2017TAPRIvoter-basedpoll71has74percentsayingwedon’tneedmorepeople.Only54percenttranslatethattolowermigration,perhapsindicatingatingeofobligation.The2018voter-basedEssentialReport72has64percentwantinglessmigration,and54percentwantinglowerpopulationgrowth.Eventhe2018LowyInstitutepollhasfound,forthefirsttimeever,thatamajoritywantslowermigration.73

It’seasytooverlookthefactthatIndiaandChinahavenowovertakentheUKasourmajorsourcesofimmigrants.74Inthepoliticaltheatre,‘African’and‘Muslim’immigrationloomsmuchlarger.Eachofthesecomponentsremainsquitesmall,whetherviatheMigration,ortheHumanitarian,channel.Whileordinaryvotersmaybeconcernedatbeing‘thoughtof’asracist,75theirturningawayfromhigh21stcenturypopulationgrowthhasmoretodowithchronicissuesinurbaninfrastructureandservices,housingaffordability,theenvironment,andqualityoflife.

Thegrowthlobbycontinuestoargueforthesupposed‘rejuvenating’effectsofBigAustralia,76andpatronisesseriouselectoralconcernsasbeingreadilymanageable,oftenviainfrastructureanddecentralisationcure-allsthatthusfarhaveprovenineffectual.Withdifferingcosmetics,bothmainpartiesstillbackhighpopulationgrowthastheenginefor‘jobsandgrowth’.Byimplication,such‘growth’iswellplacedtomeetpresentandfutureneedsofordinary(andyounger)Australians.Theclosingsectionsquiztheseassumptions.

Thestatescovet,butunder-service,highpopulationgrowth

BigAustraliaisastartingpointforstateandcityplanningnarratives,withinfrastructureandservices(ordecentralisation)somehowexpectedto‘catchup’orkeepup.

Plannersandpossiblymanyvotersdisplaylittleinterestin‘carryingcapacity’,butour‘servicingcapacity’remainsapotentissue.Federalgovernment,thesedays,isthemainincomeandcompanytaxcollector,andderivestheimmediateGDPsugar-hitfromhighpopulationgrowth.Stategovernments,whilealsoboostingtheirGrossStateProducts(GSPs),pickupmuchofthetabforthenecessaryinfrastructureandservices.

Likethepoliticalparties,thestateshaveeyesforeachother.InacyclicalraceforpolepositionsinpopulationgrowthandGDPgrowth,they’vebeeneagertoofferbusinessencouragementandtaxbreaks.RarelywouldastateleaderpresumetoqueryBigAustralia,asBobCarrdidin2000,rightatthebeginningofthe21stcenturypopulation-push.Sydney’spopulationthenstoodataround4m,whileitsmedianhousepriceswerebelow$300,000.

Thepresent-daystateandcitypopulation‘projections’commonlytakeasreadtheramped-upnational‘projections’.Forexample,thenewcityplansforSydney,Melbourne77andPerth78areassuminganeardoublingofpopulationbythemidcentury.Nottobeoutdone,BrisbaneVision203179assumeda50percentpopulationhikeover2013-31.

Invokingconceptsof‘ThreeCities’and‘ThirtyMinute’Sydney,LucyTurnbull’sGreaterSydneyPlanembraceseightmillionbymidcentury,focusedaroundthreeseparatehubs.80PlanMelbournesaysthatJobs,Housing,andTransportwill‘need’to‘adapt’.Thegoalofeightmillionisthereupfront.

InserviceofGDPgrowth,highpopulationgrowthisthegiven.Thenaturalandurbanenvironmentandothervariableshavetoworkaroundit-ratherthanpopulationbeingmanagedtofitwithourrealistic

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infrastructurecapacities.Insuchanarrative,BigAustraliaissimplyassumedtobethecorrectchoice.Stateandcityinfrastructureandservicesaresomehowtocatchuporkeepup.

Meanwhile,therearecontinuinggapsorinequitiesintheprovisionoftraining,schools,hospitals,transport,housing,orotherinfrastructure.Thesegapsrelatetohighpopulationgrowth,theneo-liberal‘competition’andprivatisationdrives,othersocialoreconomicagendas.Ordinarycitizensaremoreaffectedbygapsinprovisionthanarethepoliticaleliteswhocausethem,andarelessabletobuytheirwayoutofthem.Theyoungeragegroups,thevulnerableanddisadvantaged,someoftherecentarrivals,orthoseinnewer‘stranded’suburbswithlimitedmetrotransitareparticularlyaffected.

States’servicesfallshort

Duringtheminingboom,whileboostingmigration,federalgovernmenthadalsoindicatedthatmoremoneywouldbeavailableforTAFE,inresponsetothe(state-based)skillshortfalls.Thathasn’treallyhappenedbutprivateprovidersoftechnicalandfurthereducationhavebeenencouraged,withmixedresults,includingreportsoffraud.81Highmigrationcanstillcoexist,withskillshortages,eveninthefaster-growingstates.

ThoughTAFEmakesthehardyardsofskillstraining,faithinTAFEcompetitionwithprivateproviderswentunshaken.Induecourse,thisdebouchedontotheVETFEE-HELPscandal.82

Thetrendofthepastdecadeisgrowing(Commonwealth)universityfundingandplaces,versuslowerstate-basedfundingforvocationaleducationandtraining(VET)places.83NationalVETandTAFEenrolments,saystheNationalCentreforVocationalEducationandTraining(NCVER),declinedabout6percentincalendar2017.AconcernoftheAustralianIndustryGroup(AIG)isthatreformsofthepasttwodecadeshave‘donelittletopreventdeclineinapprenticeshipnumbers,completionratesorperceptionsrelatedtoquality’.84NCVERhaslookedattrainingfutures,tokeepupwiththefourthor‘digital’IndustrialRevolution.85

In2017-18,87percentofallmigrantsselectedundertheSkillscategorysettledinSydneyorMelbourne,witheventheminister86concedingthiswasnotideal.Nonetheless,thisyear’sgeneralmigrationplanof190,000stillaimsfornearly130,000‘Skill’migrants.Asnotedabove,themigrationSkillLists(theMediumandLong-termStrategicSkillsList[MLTSSL]andShort-termSkilledOccupationList[STSOL])areexpansive.Theyattractprofessionswhicharealreadyingoodsupply,anddomuchlesstoattractcandidatesforjobsortradesin(regional)shortsupply.The2017-18NationalSkillShortagesgototradesratherthanprofessions.That’sreflectedintheShortageListsforNSWandVictoria–onceagainthestateswithstrongaggregateeconomicgrowth.TAFE‘reforms’inthesestateshavetakenonanominouscast.PerhapsVictoria’s(2018budget)TAFEpackageisaswingtheotherway.

NationalmigrationpolicyputswelloverhalfofNOMstraightintoSydneyorMelbourne,87withmostoftheremaindergoingtootherlargecentres.Butasnotedabove,populationpressure,however,isnotabigpriorityinCommonwealthfundingforinfrastructure,includingschools.Three-fifthsofthe$19.5bn(2018-19)‘Quality’Schoolsfundisreservedforselectiveprivateschools.Theseschoolsare‘transitioningover6to10yearsto80percentoftheSchoolingResourceStandard(SRS)’88withgovernmentschoolson20percent.89Thestatesaremeantbylawtofundatleast75:15,theotherway(ie75percentforgovernmentschoolsand15percentforprivateschools).They’rethefrontlineofschoolingpressuresfromrapidpopulationgrowth.

Butsell-offsormergersofstateschoolsonhigh-valuesiteshavebeencommon.Therisingdemandsforgovernment-schoolplacesinhigher-growthareasofSydneyandMelbournearesomehow‘miscalculated’timeandagain.90Queensland,finallyrespondingto‘enrolmentpressures’,isbuildingInnerBrisbane’sfirstnewstatehighschoolsin55years.91

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Australiahasmorestudents(one-third)in‘privateyetgovernmentdependent’schoolsthanalmostanyotherOECDcountry.92Bythemid2020scombinedCommonwealth-statefundingmaywellpushmany(ormost)oftheseschoolsover100percentofSchoolingResourceStandard(SRS),thatis,highdependenceongovernmentmoneydespitetheirnotionallyprivatestatus,93withmanyormoststateschoolsundera100percent.94WetrailonOECDschoolingequityandqualitycomparisons.Underthepresentpopulationandfundingregimes,thesegapswilllikelypersistorwiden.

Among41richernations,weratedlowerforQualityEducationandhigherforSustainableCities.SuchwastheUNESCOscorecard,forninechild-relevantSustainableDevelopmentGoals.95WesatmidfieldonGoodHealth,DecentJobsandEconomicGrowth,ReducedInequality,andResponsibleConsumption.Amongthehighest-incomenations,athinktankrecentlyscoredouroverallhealthsystemveryhighly,96despiteaccessandequityissues.AnalogousOECDhealth-systemcomparisonsaregenerallyfavourabletoAustralia.Butunderlyingthesefavourablecomparisonsareserioushealthinequalities,correlatingwithspatialandclassinequalities.

Asisthecaseforourpublicschooling,ourinter-cityandmetrotransitscrambletokeeppacewithpopulationgrowth.Wecar-commutelessthantheUS,butmoresothantheEU.Ourcitiesremainverycongested,byworldcommutingstandards.97Fromthe1980s,whenUScities(evenLosAngeles)andEUcitieswererethinkingmetrotransit,SydneyandMelbournetransitwerecontinuingtoinvestinfreewaysandso-called‘public-privatepartnership’tollways.

Afterthe1980s,Canberraenjoyedflourishingpopulationgrowthandroadsinvestment,versusstraitenedbusservicesandstaticorfallingridership.ThoughdubiousaboutCanberrarail,theurbanplannerPaulMees98alsoscoredCanberraasabigfail,incomparisonwithAustralia’sgeneralpickupinmetro-transitafter1996.The2016ACTelectionwasalmostasingle-issuelight-railpoll.Thelight-railplannowproceeds.Justifiedviaanticipatedpopulationgrowthandurbandevelopment,it’salsoacatch-uponpastpopulationgrowth.Australiancapitalcities’totalpublictransportpassengernumbers,thoughrecoveringsincethe1990s,werestilllowerat2013thantheywerein1945.99

Inthe1980s,aproposalfora‘VeryFastTrain’betweenSydney,CanberraandMelbournefoundered.Todayournationalpopulationis50percenthigher,andourinter-urban‘FasterRail’initiativeisexaminingthreemuchlessambitiousproposals.Melbournestillawaitsaraillinktoits1970airport,andMelbourneandSydneymetrotransitplannersstillget‘caughtshort’bypredictablepopulationgrowth.Changingplans,stretchedservices,andcrowdedtransit,arestaplesonthedailynews.

Perth,thoughcar-reliant,augmenteditsfreeways(nottollways)withtwobrand-newandsuccessfulheavy-railspines.Itsairportlinkproceeds.ButWesternAustraliadidn’tcashintheminingboom.Statedebtgrew,bysomemultiples,andremainshigh.Perthhasasupposedly‘droughtproof’population-growthformula,counteringitsrecent20percentdeclineinrainfall.100Thelongertermhaswrought80-90percentdeclinesinthestream-flowintoolderPerthdams101andinthesalt-suppressingnative-vegetationcoveroftheSouthWest.102MoresubtlythanSydney,Perthtoositsamongworld-rankedbiodiversity.TheSouthWesthostsaremarkable7,000vascularplantspeciesorabout35percentoftheall-Australiatotal.103Afullanalysisofthedauntingimplicationsofpopulationgrowthfortheprotectionofbiodiversityandtheavailabilityofwaterisbeyondthescopeofthispaper.

Housingunaffordabilityhasbecomesevere

Publicor‘social’housinghasshrunksincethe1980s.WehavehadOECD-toppinghousingunaffordabilityinSydneyandMelbourne.104ThereisaversiontolinkingthiswithourOECD-toppingpopulationgrowth–despitemostofNOMgoingtoSydneyorMelbourne.105Thepropertylobbyandthinktanks106say,don’tfretaboutpopulationgrowth,focusonmorelandforsubdivisionsandmorehouses.ButanANUsurveyover2001-16suggestedwe’dgenerallybuiltenoughdwellings,includingincities.107

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ThefederalLaboroppositionhashadpoliciestoreininnegativegearingforinvestorhousingaswellascapital-gainstaxdiscounts.There’slittledesireoneithersideofpoliticstobringeither‘official’ortacitpopulationpolicyintoplay,orindeed‘official’interestrates.Banksremainhighlyexposedtomortgages,thoughinvestor-lendingandinterest-onlyloanshavebeencurtailed.Whilesensitivetohousepricesandinequality,theReserveBankofAustralia(RBA)alsolionisesimmigrationandpopulationgrowthasa‘sourceofstrength’.108Itexplainshighhouse-pricesinSydneyandMelbourneintermsof‘zoningrestrictions’ratherthanintermsofpopulationgrowth.109ButNOMisabigdriverofthesecities’growthindemandfordwellings.De-zoningcan’tfixtheirhousingunaffordability.110

Thegrowthlobbyistsclaimtobegreatlyconcernedabouthousingaffordability.Butabigslumpincityhouse-priceswouldalsobeaworry.ThoughtheACTisaxingitsfirst-homegrants,NSWandVictoriahaveuppedtheirs,andtheirlargepopulationinjectionscontinue.Unaffordablehousingdisproportionatelyaffectsintergenerationalequity.Australia-wide,medianhousepricesinrelationtohouseholdincomesdoubledover1981-2015.111InSydneyandMelbourne,house-pricemediansreachedtenmultiplesofhouseholdincomes.112Thoughrealestatenowappearstobe‘offtheboil’inthesecities,alargeandhighlycentralisedmigrationprogramdoeslittlefortheaffordabilitycause.

‘Decentralisation’isthefondhope

Statesmighthopetoreduceinfrastructureandhousingpressuresbychannellingpopulationawayfromcities.Intheongoingnarrative,highpopulationgrowthitselfisnottobequestioned.Advocatesprefertheperennialhopeof‘decentralisation’,especiallyofmigrants.Migrantsshouldsomehowbepersuadedtosettleintheregionsratherthaninthemajorcities.Butgeographyand(European)settlementhistorysuggestthisprojectisunlikelyevertohaveabigimpact.

Regionalismwasthefirstandlastexcuseinthepopulationreviewof2010-11.ButasthefailedprojectsinitiatedbytheDepartmentofUrbanandRegionalDevelopmentinthe1970sandthefailureoftheproposedMultifunctionPolisinthe1980ssuggest,persuadingnewcomerstosettleenmasseinregionalareasisnotlikelytosucceed.Since1945Australiahasbeenexcellentatrawpopulationgrowthbutgetspoorgradesondecentralisation.Weremainoneofthemosturbanisednationsintheworld.Evenat1945,SydneyandMelbournehousedabout35percentoftheAustralianpopulation.Now40percentofus(andabout60percentofourtotalhousingmarketbyvalue)arefoundinjustthesetwocities,ofcloseto5mapiece.Around65percentofusliveintheeightcapitalcities,ofwhichsevenhugthecoast.113

‘Carryingcapacity’ornot,thisfitsthepicture,ofdryAustralia’sgeography,poorsoils,micro-scaleevolutionaryadaptations,andclimateandrainfallextremes.Itdidn’tfitwiththeNorthernAustraliaWhitePaper,114whichstokedtheoldgeographicalanxietiesofmakingabigcontinent‘safeandsecure’.Despitespecificregionalthreatsoflossofbiodiversitythroughextinction,thisPaperpromotedbroad-scaledamminganda4-5timeshikeintheregion’spopulation.

Canberraisrelativelyclosetocoastandstillcontinuesasourmaindecentralisationsuccesssincefederation.ArecentanalysisratesInnerSydney,BrisbaneandMelbourneasthemainwinnersfromtheprogramsince2013to‘decentralise’Canberra’sfederalpublicservants.115

Highpopulationgrowthdistortsoureconomicfutures

WillBigAustraliabebetterorkinderforusall?

AftertheGFC,ourbiggestboomofmodernhistory,and27yearsofaggregateeconomicgrowth,who’swinningfromBigAustralia?Whyisthegrowthlobbykeeneronitthanelectors?Focusingonequalityandopportunity,notthe‘racism’canard,whyare‘socialists’justaskeenas‘conservatives’?It’snotthateasy,tosortoutanywin-loseeffectsfromthepost-2000populationboom.Inanyevent,equalityofopportunitywasneverthemainpriorityofthegrowthlobby.

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Duringthemigrationlullof1972-98,growthinaggregateGDPwasvolatile,butitwasofteninthe3-5percentrange.Since1998,ithastrackedatorabitunder3percent.DialdownBigAustralia,andthestoryofthe‘EconomicMiracle’maybeatrisk.Keepit,andwefaceotherrealpresentandfuturecosts.

BigAustraliadistortsfutureequalityconsiderations

ThoughotherOECDnationshavegreaterconcentrationsofwealth,Australiaisarichcountry,amongthetop10percent.But,ifhousingisthekeytohouseholds’accumulationofwealththenourshasbecomemuchlessaffordable,andinequalityhaswidened.Wecan’tdirectlyassesstheimpactofBigAustraliaitselfbecausewecan’tstudysomeotherAustralia,thesameastheonewehavebutwithlowpopulationgrowth.ButsomeEuropeancountrieshavelowerpopulationgrowthandlowerinequalitythanAnglonations.Pikettysaw‘strong’demographicgrowthasapotentialequaliser-notexcludingmore-developednations.TheUNhassaidsomethingsimilaraboutstrongeconomicgrowthandlowerinequality-includinginless-developednations.Conversely,along-runstudysuggestshighinequalityfuelshighpopulationgrowth.116

Surveyingthepast30years,theIMFratedAustraliaandotherrichOECDnations,plusIndiaandChina,asshowing‘largeincreases’inincomeinequality.117WhileMSKeatingisnotinclinedtoputusamongtheworstofnations,heascribeswideninginequalitymoretoa‘hollowingout’inmiddle-leveljobsthantotheavariceofPiketty’stop1percent.118Decryingthefocusontheupperechelons,IPAhasportrayedAustralianincomeandwealthinequalitiesasquitelow.119

Theyears2004-14includethemigrationpushandtheGFC,andduringthisperiodtheOECDsawourhighestincomequintilegainingmorethanthelowest.120Theeffectwasstrongerinwealthterms.Overthedecadefrom2005-16,theABSreckonedthatGiniinequalitiesforhouseholdincomeandwealthhadgoneup,ifonlyatthemargin.121At2015-16,medianhouseholdnetworthforthefirst(lowest)quintilewasunder$50,000,around$500,000forthethird,around$2mforthefifth.

Whilesomemaybaulkattheideathathighimmigrationincreasesinequality,aCBAstudypointstostallingper-capitaincomes,wagestagnation,andhousingunaffordability.122MSKeatingadjudgedthatrealwagesandincomeshaveusuallykeptpacewithproductivity.Butthismighthavechanged,sincethepeakoftheminingboom,andtherearefutureconcernsforequalityofopportunity.Theinfrastructure,service,andhousing,disparitiescreatedbyBigAustraliahavebigimplicationsforinequalityandintergenerationalinequity.DespitethisyoungerAustraliansseemlessinclinedthantheirelderstoperceivemigrationasbeingtoohigh.123

BigAustraliadistortsfutureeconomicconsiderations

Butperhapsequalopportunityisnotyourpriority.Maybeyouprefertofocuson‘dynamism’and‘innovation’.Butitisstilldebatablewhetherourhighpopulationgrowthisagreatforcefortheseeither.

Migrantsandtemporaryworkerscanbringnewvigour,ideas,andskills.Studiesinmanycontextslinkmigrationandinnovation.Butourhighmigrationseemstobedrivenbythegrowthlobby’sbasicdesiresfor(housing)activityand(GDP)growth,morethanaddressinginnovationgaps.Evidenceforthiscanbefoundinlimitationsonventure-capital,entrepreneurshipbarriers,unbalancedinnovationsupport,poorbusiness-researchcollaboration,and(aspertheAIGandNCVERreports)our‘digitalstall’.Challengingoursupposedmulti-factorproductivityslump,Fosteralsoseestheultimatedriversofourfutureproductivitygrowthasbeinginnovationandentrepreneurship.124Inhisview,weshoulddomoreworkonthese,andworrylessabout‘wagecosts’.

Despiteitsfocusonskills,ourhighmigrationisnotnecessarilythemostimaginativemeanstoextendanddiversifyaneconomytraditionallybasedon‘naturalresourcesandservices’.Here,anothernodtoLAandCalifornia,aninnovative,worldtop-teneconomy,with40mpeople,inhighlybio-diversesurroundings.Thislookslikeacaseagainstcarryingcapacityandpopulationbeingaproblem.Butthereremainstark

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environment,water,wildfire,andpollutionproblems.Therearealsoinfrastructurestruggles,andinequalityishigh.125Theneedfortheirnewbullettraincapturestheheadlines,notanysupposedneedforpopulationgrowth.California’spopulationisgrowingatlessthan1percentayear,asisthatoftheUSasawhole.With4minLACity,and10mintheCountyentire,theLA‘SustainableCitypLAn’focusesonenvironment,economy,andequity–muchlesspopulationgrowth.

LikeAustralia,Californiaishighly‘multicultural’.AsinAustralia,theCaliforniaGreensshyawayfromdirectconsiderationofthepopulationquestion.However,thereisalsoalong-running‘CaliforniansforPopulationStabilization’group.Underlowerpopulationgrowthover2011-16,Californiaappearedtoimplementprogressivemeasuresforworkers’rights,safetynets,taxation,housing,whilemaintainingreasonableemploymentgrowthandgrowthinaggregateGDP.126

TheIMFisnotthefirsttosuggestthatautomationwillbekindertoeconomicgrowthandcapitalthantolabourorequality.127Howwouldour36mAustraliacomparewithCalifornia,Japan,andthemore-equalEuropeannations—allslowgrowinginpopulation?WouldhighpopulationgrowthleadustoEconomicMiracleII,withresearchandinnovation,abroaderpaletteofwinningindustries,companies,andexports,andenvironmentandopportunitysomehowpreserved?Orcouldwenotdobetteroverall,withouttheintenserelianceonaBigAustralia?

Forordinarycitizensatleast,itreallymatters,ifinfrastructureandservicescanever‘catchup’.Here,threeeconomicscribes(Holden,GittinsandVerrender)offerrecentvariationsonthesametheme.128WearasyouwillthekudosofBigAustraliaandtheEconomicMiracle,theyseemtobesaying,butalsoweartheveryrealbudgetaryimplicationsforinfrastructureandservices.

Thefirst(Holden),ifgenerallyfavouringmigration,seesnoautomaticper-capitarevenuebenefit:‘Thefederalbudgetshouldtreatthecostsandbenefitsofimmigrationsymmetrically,anditshouldfocusonthelong-runnottheshort-run.’Theothertwoarelesspro-migration.Buttheyalignwiththefirstasregardsthemarginaleconomicbenefits,andunder-fundedliabilities.

Recall,saysthesecond,carryingcapacity(Gittins).Themiraclefades,addsthethird,ifyoudivideGDPbypopulation(Verrender).Notso,theRBAmightcounter:weoutpacecomparatornationsonrealGDPpercapitagrowth.129ButtheconcernsoverourpopulationgrowtharedeeperthanpercapitaGDP–stretchedcities,strugglingservices,inequality,environmentalprofligacy,andourfutureeconomicbets.

Conclusion:loweringpopulationgrowth

IntheserviceofgrowthinaggregateGDP,national,state,andcityplansareonapopulation-growthtreadmillfordecadesahead.Butthenaturalandurbanenvironmentandtheelectorateareequallyworthyofastrongsay.

‘Lowerpopulationgrowthandlimitedmigration,’saysarecentmeta-analysis,130‘maycontributetoincreasednationalandglobaleconomicinequality.’InAustralia,perhaps,thereversedoesn’tapply.Withtheenvironment‘treadingwater’,thestatesstrugglingtokeepupservices,andelectorswearying,weoughttoreconsiderlowerpopulationtrajectories.

Othertaxandeconomicsettingsremainingsimilar,alessurgentpopulationpolicymightnotbetransformative.Butneitherwoulditbringruin.LowerpopulationgrowthcanmitigateStateoftheEnvironmentpressures.Andgiveusspaceforhonestenvironmentpoliciesthatdon’tsendusbackwards,onemissionsandStateoftheEnvironment.Lowerpopulationgrowthcouldmitigatethechronicinfrastructure,service,andcongestionissues.Andgiveusspaceformoreimaginativeandcreativepolicies,towardfutureprosperityandopportunity.

Shiftsineconomicorenvironmentpoliciescanspringmorefromthepoliticians,ormorefromtheofficials.Here,thesecondavenueisunlikely.Wereweevertochange,mostlikely,thatwouldhaveto

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comefrompoliticiansatthetop.Somehaverecommendedanationaldebateasastartingpoint,aninquiry,evenaplebiscite.These,too,arenotwithouttheirevidentdrawbacks.

UnlikeAustralia,inNewZealand,votersgotarealchoice.Labourwenttothe2017election,witha30-40percentmigrationcut.Afteryearsofrapidpopulationgrowth,theirplatformruedgapsin‘housing,infrastructure,publicservices,andintraining’.131Their2018budgetoffersGDPgrowth,buttimewillreveal,theextentoftherebalancebetweenpopulationandinfrastructure.132In2017-18,theirnetmigrantgainfellby12percent.Tonote,NZhasFinanceandImmigrationMinisters,ratherthanaso-namedPopulationMinister.

ForanyAustralian‘circuitbreakers’onpopulation,therewouldneverbeanidealtime.Wheneconomicgrowthisflat,thereispressuretoincreasepopulationinordertoboosttheGDP.And,itcanbeargued,topropuphousingactivityandhousingprices.Wheneconomicgrowthisup,asduringtheminingbooms,industrywillpressuregovernmentstoraiseimmigration,tocoverlabourshortages.And,itcanbeargued,tomaskAustralia’sparsimoniouspublicfundingoftraininginessentialskills.

Shortterm,itmaybe,thatthemild‘reduction’inmigrationof2017-18willbepushednofurther.Thatwouldleaveusonveryhighimmigrationlevels.Mediumterm,it’spossible,thattheimbalancesbetweenourcarriedpopulationandourcarrying(orservicing)capacitymighttriggerarealpolicyshift.Ifthatmediumtermwerenow,andreviewingtheprevioussectionsitmaywellbenow,thesemightbeimportantelementsoftheshift.SomeoftheseideasaresimilartothepoliciesoftheSustainableAustraliaParty.133

CappermanentmigrationandreelinNOM

WeoughttoputtheMigrationprogramunderaceiling,ofperhaps80,000-90,000,similarto1990slevels.ThatisnotsoalarmingwhenweconsiderthatthebulkofthecurrentNOMsettlesinSydneyorMelbourne,andrepresentswell-suppliedskillsnotshort-suppliedjobs.BudgetNOMassumptionsrun20-25percentaheadofthemigrationplan.NOM,too,couldbereeledin.

Movetoapopulationpolicyoflessthan1percentgrowthannually

Ifourunusuallyhighpopulationgrowthlevels,andmoreoverthecostsofourpopulationgrowthpolicies,werepublicisedmore,itmightnotbesoeasy,forourprimeministerstoraiseimmigrationnumbersatwill.AsCalwellhadhis2percent,weshouldmovetoaceiling(notatarget)ofratherlessthan1percentgrowth,closertoOECDnorms.Ascomparedwithpresentshares,morewouldcomefromnaturalincrease,lessfromMigrationplustheHumanitarianintake.Withalowergeneralimmigrationceilingwecouldadmitmorehumanitarianmigrants.

Budgetforpopulation’slonger-termcostsasrigorouslyasforitsshorter-termGDPboosts

Evenatlowerlevelsofpopulationgrowth,letusmodifythefederal(andstate)budgetpractices.Asvigorouslyaswebanktheshort-termGDPgainsfrommigrationandpopulationgrowth,weoughttobudgetforthelonger-termservicingimplicationsandcosts.Aspartofthis,agreaterbudgetaryreflectionontrendsinincomeandwealthshareswouldbewelcome.

Realignourpopulationtrajectorywiththeenvironmentalconstraints

Whetherornotunderthenameof‘carryingcapacity’,letusputtheenvironmentalparametersandconstraintsbackintoourpopulationplans.Iftheseweretakenatallseriously,wewouldseetheneedtoredrawour2050(not2030)populationplanmuchcloserto30m.

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Inthenationalinterest,establishaproperpopulationdirectorate

Briefly,in2010,thethenLaborgovernmenttacked‘Population’ontotheEnvironmentMinistry.In2018,‘Population’hasbeentackedontoa‘Cities,UrbanInfrastructure’Ministry.Butit’sstillbusinessasusual.Expertly,wedocumentourpopulationandimmigrationnumbers,ignoringourpopulationpolicyanditsimplicationsforenvironmentandelectors.Weshouldtrytosetupaholisticpopulationministryandagency,perhapsintheprimeminister’sportfolio.

Controlthetemporaryskillshortageentries

FromMarch2018,twostreamsofTemporarySkillShortage(TSS)replacethe457visas.Oneofthesestreamsstilloffersapathwaytoapermanentvisa.Again,ifweweretolowertheplannedmigrationintake,weshouldbeabletomanagetheTSSnumbers–andtheoverlyingNOMnumbers–withoutcreatingalargeoverhangvis-à-visplannedmigration.

Movebeyondthe‘borderprotection’boasts

Politiciansliketowrapthemselvesinpositiveaspectsoftheimmigrationprogram.Buttheir‘borderprotection’posturesareadistortionofwhoweoughttobe.IfweweretotakegeneralMigrationbacktowardsthehistoricallevels,weshouldatleastmaintainourmodestHumanitarianintakes,andphaseoutthepresentdetentionpractices.TheHumanitarianintake,takenonitsown,currentlyaddsratherlessthan1/10ofonepercenttoourannualpopulationgrowth.

15

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