Population ponzi overruns Melbourne’s hospitals

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By Leith van Onselen

In the decade to June 2015, Melbourne’s population ballooned by 832,000 or 23%, with an average of 83,200 people flooding into the city each and every year, driven mostly via immigration (see next chart).

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Moreover, the latest population data for Victoria registered a whopping 114,865 new residents added to the population in the year to March 2016, again mostly via immigration, with the lion’s share of these residents flowing to Melbourne:

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And let’s recall the Victorian Government’s own population projections, which forecast a whopping 115,000 new residents for the state each and every year for the next 36 years, with Melbourne’s population projected to swell by 75% to 8 million, again with most of these new residents arriving via immigration:

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Those of us that live in Melbourne have experienced the effects first hand. Congestion is getting worse each and every year, with the city’s roads now choked with traffic much of the time. Users of the city’s public transport system are not fairing much better, with “crush loads” now a frequent occurrence.

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Melbourne’s public schools, too, are suffering from chronic over-crowding as they struggle to keep pace with the rampant population growth, with some students being forced to work on cushions on the floor and play in neighbouring parks because there simply is not the space to accommodate them.

Now, the collateral damage from Melbourne’s high immigration has spread to its hospitals, where emergency rooms are running over capacity. From The Age:

…leaked data indicates there has been no improvement in ambulance “ramping” and that this month hundreds of patients waited longer than an hour to get into an emergency department while under the care of paramedics.

The queues are tying up paramedics when they should be free to respond to urgent cases. Doctors say the problem persists because hospitals are too full.

…units were so busy that junior doctors were performing resuscitation on patients without the presence of senior clinicians – something that previously did not happen. Dr Giannios said crowds of people waiting for care can trigger agitation and violence, causing risks for patients and hospital workers.

“There are times when things get so chaotic and crazy, you wonder if you’ll get out alive,” said the doctor, who called for the government to fund more hospital beds and resources…

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So here we have yet another case of Australia’s dysfunctional population ponzi in action.

The Federal Government massively ramped-up immigration from 2004, which has lead to surging demand for infrastructure, housing, schooling and hospitals (among other things).

However, the states have been unable to accommodate this growth – due in part to incompetence, but also through lack of funding courtesy of Australia’s famous vertical fiscal imbalance, whereby the federal government collects most of the revenue.

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The federal government’s Intergenerational Report projected that Australia’s population would grow by an average of 394,000 people per year between 2016 and 2055, representing a further expansion of Australia’s immigration intake and nearly twice the annual level of population growth recorded in the post-war to 2003 period (see below chart).

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As illustrated by The Australian Institute, this level of population growth will require the building of an additional 61 public schools, 2 public hospitals, 25 residential aged care facilities, and 145,000 new homes each and every year:

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Ongoing population growth without adequate planning and investment means more time lost in traffic, more expensive (and smaller) housing, less services (e.g. health and education), and overall lower living standards.

The equation is that simple, but so often ignored by our politicians and policy makers.

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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.