Government ducks population gorilla

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ScreenHunter_02 Apr. 21 18.01

By Leith van Onselen

On Friday, I expressed frustration at how politicians of all persuasions talk big on issues like housing affordability and the environment, but then run contradictory policies, such as a high immigration program and birth incentives, which place additional pressure on Australia’s eco-system, as well as increase demands on infrastructure and housing.

Over the weekend, my frustrations grew when I discovered that the Government had delayed the release of the fourth inter-generational report until after the election. From the Australian:

THE nation’s next long-range economic report is likely to be delayed until next year despite an earlier government plan to release a fourth Intergenerational Report before the federal election.

The delay could spare the Gillard government from another election-year row over population growth after the third report revealed in early 2010 that the nation was on track to reach 35.9 million people by mid-century.

The Australian has confirmed that the busy government agenda and the coming election campaign will make it difficult to complete the IGR this year, despite expectations that it would be released three years after the last report…

Former treasurer Peter Costello issued the first IGR in 2002 and the second in 2007 under a Charter of Budget Honesty that promised the reports every three years.

Labor changed the timetable when it promised greater budget transparency in a reform called “Operation Sunlight” in 2008, when former finance minister Lindsay Tanner outlined a plan to release an IGR “at least once every parliamentary term”.

The government’s response to the review of budget transparency in 2008 agreed to the recommendation for an IGR every three years.

That led Mr Swan to issue the third IGR in January 2010.

Any delay to the IGR would leave the next parliament and possibly a Coalition government to decide when to update the report.

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To say that the delay in releasing the fourth IGR is disappointing is an understatement, as the issues surrounding Australia’s high rates of immigration and population growth are now likely to be swept under the rug by all major parties, and will not be debated prior to the election.

To make matters worse, should the Coalition win the upcoming election, its busy first term agenda is likely to push-back the IGR’s release even further into the future, stifling much needed analysis and debate. Indeed, Joe Hockey admitted as much to The Australian when he commented that “If we are elected we’ll have a pretty full dance card and I don’t want to put extraordinary pressure on the department”.

Admittedly, there are some extenuating circumstances behind the fourth IGR’s delay, with Treasury identifying a large statistical error in the 2011 census, which reportedly means the most accurate data for the next IGR would not be available until 2014.

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Nevertheless, given the potentially fundamental impacts on Australian living standards and prosperity, it would be nice for a change if Australia’s politicians would openly engage each other and the community on this issue, rather than assuming tacit consent. This is a democracy after all, and we need to have our say. And in order to do so, the facts and arguments for/against a substantial increase in Australia’s population need to be brought into the public sphere and debated.

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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.