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Bigger or Better?

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Would you rather be 30% wealthier retaining the liveability of your area or 38% wealthier with much more crowding?

By Ian Lowe

A number of commentators and interest groups extol the need to increase Australia’s population, but how well do their arguments stand up to scrutiny?

I was provoked to write a book about the population debate when Kevin Rudd calmly told Kerry O’Brien that he believed in “a big Australia”. His off-hand comment created a storm. One insider admitted: “The focus groups went ballistic”.

The fundamental reason is that most of us living in or around our major cities accurately perceive that our quality of life has steadily declined as urban populations have grown. And all the important environmental indicators are getting worse as a direct result of the increasing demands of our growing population.

The water has been muddied by widespread misconceptions that “we aren’t replacing ourselves”, “our population would decline if we didn’t bring in migrants”, “our ageing society is a problem”, “we need migrants to fund the pensions of older Australians”, and “population growth is good for the economy”. I set out to identify some facts that could inform the debate.

First of all, we don’t have a problem replacing ourselves. Each year about 100,000 Australians die and about 250,000 babies are born, so the population would grow by 150,000 per year, or about 400 per day, if there was no migration. The birth rate has increased since the Howard government offered financial incentives to have more children, but the so-called “natural increase” – births minus deaths – has never been less than 100,000 a year for several decades.

Of course, we do also bring in migrants. Each year some people leave Australia and others arrive. The significant figure is the net migration – the difference between numbers arriving and leaving. With political decisions this varied from year to year between 20,000 and 200,000, averaging about 100,000 – a similar figure to the “natural increase” – until the Howard government dramatically increased inward migration to well over 300,000. There has been some tightening of the scam of “education” schemes that were really back-door visa programs, but the annual net migration is still about 250,000 per year.

The balance of our immigration has also changed. Historically the largest group of migrants were from the UK and Ireland, but last year for the first time more migrants were of Chinese background. Overall, more migrants now come from the Asian region than from Europe and North America, so migrants are more visible on the streets, on public transport and in our institutions.

Adding together birth rate and migration, the Australian population is now growing by about 400,000 per year, or another million every two-and-a-half years. While Kevin Rudd celebrated that our population could grow to 36 million by 2040, on current trends it will be even larger than that so we are right to be asking whether that sort of growth is manageable. In fact, infrastructure in our major cities is not keeping pace with the growing population, so our material living standards are declining steadily.

Perceptive economists actually predicted and quantified this problem 25 years ago. US economist Lester Thurow argued that the average life of built infrastructure like roads, water, sewerage and transport systems is about 50 years, so the annual bill for replacement would normally be about 2% of the total capital invested. If the population is growing by 2%, the infrastructure bill is the normal 2% replacement plus an extra 2% for the new people – or 4% of the total capital. So quite a modest rate of growth, less than the average in recent years in south-east Queensland, actually doubles the infrastructure bill.

But the revenue base will have only grown by 2%. Faced with this problem, Thurow predicted, governments would be forced to sell public assets and put together improbable public–private partnerships to try to meet the impossible task of funding the infrastructure required to accommodate the growing population. That is exactly what we have seen in Australia in recent years.

One reason for the unpopularity of Queensland’s Bligh government, leading to its recent loss of office, was its fire-sale of public assets to fund infrastructure. A second problem was that even those desperate measures did not solve the problem, so roads became more congested, public transport vehicles became more crowded and so on.

Ironically, the backlash against the Bligh government brought to power a Coalition administration headed by Campbell Newman, who as Lord Mayor of Brisbane ran up a huge public debt in an orgy of road-building to try to dilute the public disquiet about growth.

The claim that we have a problem of an ageing population is completely false. The number of us over 65 is increasing, but that doesn’t inevitably mean we are an increasing burden on the medical system – the reason we are living longer is that we are healthier. When I was young, it was unusual to see anyone over the age of 30 still playing cricket; today there are enough over-60s cricketers for there to be a national competition.

United Nations statistics show that we are comparatively young for an affluent country. We rank 43rd in the world in a listing by average age; we are not just younger than European countries but also younger than Canada, Cuba, Hong Kong and Singapore. About 19% of Australians are over 60, while the average for Europe is 22%, western Europe 24%, Sweden 25%, Germany and Italy 26% and Japan nearly 30%. At the other end of the age scale, 19% of Australians are under 15 compared with an average of 16.6% for the developed world as a whole and 15% for Europe.

In any case, even if we did have an ageing society, migrants are typically about the same age on average as those already here – and they age at the same rate!

The economic question is more complicated. There is no doubt that population growth makes the total size of the economy greater, but there is vigorous debate among economists about whether it increases wealth per person, which is the factor determining whether you and I are better off. The general view is that there is a small net benefit, but this needs to be offset against the negatives of more crowded roads and public transport, less access to open space and recreation areas, and so on.

A calculation by the Queensland government is typical: average household income is projected to grow from about $50,000 per year to about $65,000 in 2030 if growth is tightly controlled, or to about $69,000 if the present pro-growth policies remain. So the question we should be asking is whether you would rather be 30% wealthier retaining the liveability of your area or 38% wealthier with much more crowding. I suspect many people would opt to maintain their lifestyle rather than take the extra money.

Surveys regularly show that the majority of Australians do not support the current high level of immigration. The debate is confused by an inflated emphasis on the relatively small numbers of refugees arriving by boat – about 6000 in a typical year out of a total migrant intake of over 300,000 – but it is clear that the majority are worried by the rate of growth. So who supports it?

When I analysed the debate, I found there are some obvious vested interests that support rapid growth: the property industry, the retail sector in general and some parts of it in particular. There are also some professions with a strong leaning in that direction; economists generally believe unlimited growth is possible, and the media tend to demonise anyone who questions rapid growth.

The choices we are making now are determining what Australia will look like in 2050. If we continue to encourage large-scale migration and a high birth-rate, the population will be over 40 million and still growing rapidly. Holding migration down to around 100,000 per year or lower and phasing out incentives for larger families would enable us to stabilise the population below 30 million.

There is no more important issue for an informed public debate.

Ian Lowe is Emeritus Professor of Science, Technology and Society at Griffith University and president of the Australian Conservation Foundation. His new book, Bigger or Better? Australia’s Population Debate, is published by University of Queensland Press.