ABC picks up anti-population ponzi narrative

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By Leith van Onselen

Yesterday, CBA senior economist Gareth Aird published an excellent report explaining how Australia’s strong population growth (read immigration) is actually reducing households’ living standards, and called for policy makers to place a greater emphasis on per capita measures of the economy, such as real per capita national disposable income (read report here).

This morning Aird gave an insightful interview on ABC’s Radio National program discussing these issues in more detail, which you can listen to above.

Some key quotes from this interview include:

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“When policy makers focus on aggregate growth rates, people at the household level can’t relate to that. It doesn’t mean a lot saying to someone that the economy is growing at 3% when a lot of that growth is just coming from population growth and selling more commodities offshore. When you drill it back down to the household level, it’s been a pretty tough five years for most households”…

“Given what has happened at the household level, it warrants a greater discussion at the policy level about the direction that Australia has taken with regards to immigration policy when you look at then how it impacts on the living standards of the existing population. I think things like traffic congestion, housing affordability, the unemployment rate, household income, they all need to be looked at in the context of immigration policy and population growth”…

“[Population growth] benefits businesses that can take advantage of an ever-growing population or customer base… ultimately businesses that have market power and scaleability do benefit from population growth”.

“If you look at the historical history there has absolutely been benefits from having strong population growth, but I think more recently we have seen some of the indicators suggest that those benefits are starting to wane, and unless there is a commensurate lift in public investment, housing affordability more broadly… [and] the rate at which the population growth in Australia’s biggest cities are expanding, then I think the benefits to running a strong immigration program are questionable in relation to what it is doing at the household level”…

“If both sides of government still want to run with the current policy around immigration growth then they must be looking at what it is doing to housing affordability, traffic congestion, other issues relating to public investment, otherwise you simply dilute the quality of the public infrastructure that you already have here, and you place further upwards pressure on house prices and traffic congestion”…

Brilliantly said.

While you are listening to the above interview, consider again the official population growth projections for Australia, New South Wales and Victoria:

ScreenHunter_15472 Oct. 14 10.28 ScreenHunter_15473 Oct. 14 10.29 ScreenHunter_15474 Oct. 14 10.29

This madness has got to stop.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.