CommSec primes the population ponzi

By Leith van Onselen

From CommSec this afternoon comes the following statements on Australia’s population (immigration) numbers, released by the ABS:

Population growth is healthy although in recent quarter it has eased – largely due to a slowdown in migration. Importantly population growth is still amongst the fastest across the OECD nations and as such more people coming to Australia means greater demand for houses, cars and retail items. Clearly faster population growth is good news for builders and retailers.

Some people aren’t convinced that faster population growth is a good thing. It is all about striking the right balance. If we need more workers and we can’t get them locally, it makes sense that we bring them in from abroad. It is vital that supply and demand for workers is brought into balance.

An ongoing lift in migration is also positive from a longer-run point of view in that it flattens out the ageing profile. We will need more in the way of younger people over time to support the growing ranks of pensioners.

So, high population (immigration) growth is unambiguously positive and CommSec can see few downsides?

Where’s the mention of the strain on Australia’s already deficient infrastructure stock, nor the costly infrastructure investments that will be required in a futile bid support the rapidly growing population?

Where’s the acknowledgement that rapid immigration can actually lower productivity by diverting investment away from productive areas (see this morning’s post), let alone through the costs of congestion?

Where’s the concern that younger Australians are being made to live in smaller and more expensive housing, often further away from the CBD, as more people flood into our major capital cities?

And where’s the admission that more people means less resources per capita, and a growing population means that Australia must deplete our mineral resources faster, just to maintain a constant standard of living?

As to CommSec’s claim that “it is vital that supply and demand for workers is brought into balance”, I agree. But given that unemployment is at a 12-year high and trending up:

ScreenHunter_6723 Mar. 26 09.55

And underemployment is at a record high and rising:

ScreenHunter_6724 Mar. 26 09.57

Surely by CommSec’s own admission, the immigration intake should be lowered to bring the supply and demand for workers back into balance?

Then there’s CommSec’s claim that immigration is required to offset the costs of an ageing population. The Productivity Commission disagrees, finding that immigration’s effect on Australia’s age structure is only modest and temporary:

…several studies, including some undertaken by the Commission, indicate that policy-induced changes to Australia’s population are unlikely to significantly affect the ageing trends.

Improvements in longevity are the major cause of population ageing over the long run. In recent projections, Commission researchers estimated that an increase in the long-run total fertility rate from 1.85 to 2.10 births per woman — even if it could be achieved — would be associated with only a 1.1 percentage point reduction in the proportion of people aged over 65 by 2051.

Similarly, substantial increases in the level of net overseas migration would have only modest effects on population ageing and the impacts would be temporary, since immigrants themselves age. The Commission has estimated that an increase in annual net migration from 150 000 to 300 000 would lower the proportion of those aged 65 or over by less than 3 percentage points by 2044-45. As an illustration of the challenge, the Commission showed that delaying an increase in the dependency ratio by 40 years would require a net migration-to-population ratio of 3 per cent per year, leading to a population of around 85 million by 2044-45.

It follows that, rather than seeking to mitigate the ageing of the population, policy should seek to influence the potential economic and other impacts.

What will be CommSec’s solution in 30 years time when the current batch of migrants grow old and require taxpayer support: an even larger immigration intake to once again offset population ageing and an even bigger Australia (100 million here we come!)?

As I said this morning, if all Australia is doing is growing for growth’s sake, pushing up against infrastructure bottlenecks, diluting our fixed endowment of minerals resources, and failing to raise the living standards of the existing population, what’s the point?

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  1. Implement a Long term temporary migrant scheme. Allow workers to come here for up to 10-15 years and then send them back to their home country to retire when they stop contributing economically. Maybe a few ethical issues to think through but might work.

    • I thought that half the reason people came here was to enjoy retirement with the benefit of our relatively generous health and retirement welfare schemes.

    • “…Maybe a few ethical issues to think through but might work…..”

      Very good, nice and dry.

      • Its done in other countries. A possible way of addressing the demographic aging issue without everending population growth.

    • This scheme was a disaster in Germany. You have millions of Turks who feel like citizens and have their whole lives in Germany but cannot get citizenship and feel alienated and angry as a result.

  2. I guess in light of the ABS demographic print the Collective Vested Interests of Australia need to get a copy of that ‘For Dummies’ book and carefully study the chapter headed ‘Attracting new suckers entrants long after the good times are over’

  3. ceteris paribus

    Well put, UE.

    The whole immigration concept is being driven by an amoral Neo-liberal philosophy, which neglects the value of man and worships only short-term profit.

    We want to pick the cream of world workers, already healthy, educated, trained and work ready to drive productivity and reduce labour costs. Ideally, we would like to send them back from where they came (457s) when they age, hopefully have spent most of their money here during their working years.

    We want to shortcut the natural cycle, the work of building for greatness. We don’t see education, childcare, health, training and family support as anything but consumption and costs. Heaven forbid we see such services as investments, both economic and life-fulfilling.

    The corporate industrial complex wants to grab benefits for free and externalise all costs. It is not a builder, it is a thief.

    But the greatest blind spot of the industrial complex is its self-defeating short-termism. Because from its investments, its care and its effort will come its invaluable treasures.

    I am not against immigration at all. I support sustainable, balanced immigration, both for nation and the new citizens we receive- but never just for the cash benefit of an industrial elite.

    • We want to pick the cream of world workers, already healthy, educated, trained and work ready to drive productivity and reduce labour costs. Ideally, we would like to send them back from where they came (457s) when they age, hopefully have spent most of their money here during their working years.

      This analysis suggests we want to take everything we can from immigrants, and give nothing back, expecting they will continue to come here just ‘cos Straya’s f cking awesome.

      Eventually, people are going to get sick of that, and go somewhere that treats immigrants with dignity – maybe Japan or France.

      • “Eventually, people are going to get sick of that, and go somewhere that treats immigrants with dignity ”

        When will Australians be treated with dignity instead of being told what we want? The vast majority of Australians do not want more people.

      • Yeah – the risk I see is that the Libs end up making their true feelings too obvious.

        Immigrants probably have more pressing goals in coming here than making friends with Aussies (tho presumably that is at least preferable) but that doesn’t mean they will stand for being spat on.

      • They may not want immigration but they also dont want falling house prices or higher taxes. Time and again the voters choose short term gain and then moan about the long term pain.
        We have the government we deserve and only have ourselves to blame.

    • Yep,

      Guest worker programs in Australia are as odious as they were in Germany post WW2 and everywhere else where importing temporary workers is fish of the day.

      If we want skills and brains and talent from around the world or offer humanitarian entry offer them residency and an unambiguous path to citizenship.

      If some come and then choose to return home that is at least their choice.

      • It would still be their choice to come to Australia with the full understanding they would not be offered citizenship.

        I work as an expat outside Australia with the understanding that I will be unlikely to receive citizenship and no long term ambition to stay here. I am sure there would be a lot of skilled people willing to come to Australia under similar conditions. Just need to be upfront about it.

    • Not just a neo-liberal issue, the socialist elite think they are saving humanity but crushing what made our nation great. Anything to boost their ego and stroke their arrogance.

      • Socialists are morons.

        I once read a study that said something like “of the seven aspects to any issue, socialists miss 4 of them”.

        These idiots are so smug but yet it’s proven they have no clue what’s broadly going on. Politically kill socialists before they kill us.

      • You can use whatever dumb label you want. All politicians are in it for themselves and vested interests. I think the current rabble are doing a fine job of trashing this so called ‘great nation’. Great in what context.

  4. Population growth advocates should be labeled what they are. Disgraceful treasonous fucking liars.

    • haha! too right in all your subtleness !

      Exceeding the carrying capacity of locations around the world will lead to all kinds of social unrest, and eventually all out warfare and chaos

  5. What will be CommSec’s solution in 30 years time when the current batch of migrants grow old and require taxpayer support: As if they give a fuck about 30 years. It’s all about reporting seasons.

  6. Most countries import their cheap labor and try to get their own earning from value add roles.

    In Australia people get paid shit loads for jobs that can be filled for a third of the price from migrants and then borrow 7 times their income to buy a home


    • Not to mention these wages are artifically propped up by “award wages,” basically whatever a committee thinks they should be paid. Meanwhile, white collar workers get no such price floor and can be beaten with sticks. Hence plumbers make more than IT professionals.

  7. When they sign the TPP and TiSA Australia will haemorrhage thousands of jobs. This will be on top of a slow down in economic activity as China goes further off the boil. The population ponzi will collapse as a result. No point going to a country where there are no prospects.

  8. I think there is another very important driver for the population ponzi other than being able to sell more baked beans, something that I don’t hear mentioned on this site or elsewhere. That is, people pouring into Australia strokes our collective ego and makes us feel important. I think this is just as powerful as the unsophisticated urge to pile up more dollars via importing more people and my reasoning for saying this is that when you look at a lot of the public spruikers for the ‘Big Australia’ you realise they aren’t going to get rich from it. So there must be something else driving their misty eyed reaction to a growing population. I put it down to this; if you are well over 40 like me you grew up in a country that seemed unimportant and far from the rest of the world (when I first moved overseas in my early 20’s I remember fellow Australians would often big up Australian achievements, I did this as well but then I was fairly immature). Things have changed, its a global economy and a sign of having made it in this globalised economy is that people want to come and live in your country so you must be important. I would say that suggesting we don’t need extra people threatens this newly found feeling of being important and its the the public population spruikers that would feel more immediately threatened than lazy business people.

    • Yeah, there is a real cargo cult mentality behind it. “America has a big population, America is powerful and important. If we have a big population we can be like America” seems to be about the extent of the reasoning.