Over the past year, I have argued vigorously that the high population growth policy embraced by the two major parties, business leaders, and most commentators – which will see Australia’s population increase by around one million people every two-and-a-half years – is likely to result in lower living standards for most Australians, as the nation pushes up against capacity constraints in infrastructure and Australia sees its fixed mineral endowment ‘watered-down’ by an increasing number of people.
My pessimistic view towards high levels of immigration is not based on the perception that “Australia is full” – after all, we are a large continent with a relatively small population – but rather a deep skepticism that Australia’s political system can achieve the required policy settings and investments required to accommodate large increases in the population without lowering the living standards of those already living here.
Indeed, one only needs to look at the dearth of infrastructure investment that has taken place over the past several decades as Australia’s population has boomed. Anyone that has spent significant time in one of Australia’s major cities will recognise that infrastructure has become stretched. Our roads are clogged and our public transport networks are overcrowded and lacking in scope, which costs all of us all in terms of lost productivity and reduced living standards.
Today, The Australian has published a scathing report on the widespread failure of the Council of Australian Governments (COAG) National Reform Agenda (NRA), which highlights some of the ways in which the federal political system in Australia is lacking to plan for and cope with growth:
FEDERAL and state leaders have failed to meet targets to lift economic growth and improve services for taxpayers, in a bleak verdict on the national reform agenda…
Ringing the alarm on stalled promises, the agency that monitors national reforms will warn today that Australians are not getting the boost to education, health and indigenous welfare pledged by governments five years ago.
The warning will come with a call for Canberra and the states to overhaul national agreements worth billions of dollars to get dozens of major changes back on track…
The council warns that the overlap between Canberra and the states has put increasing pressure on funding and a new approach is needed to prevent delays that drag down the nation’s growth…
Amid a renewed debate on economic reform since the federal election, the COAG Reform Council notes that the nation’s productivity plateaued in 2005 and has declined since…
While the Australian’s report does not deal explicitly with infrastructure, the issues are similar: namely an overall dysfunction in the political process that is being exacerbated by population pressures. It is also interesting to note that Australia’s productivity plateaued from 2005, just as immigration surged (see next chart).
The definition of insanity is doing the same thing over and over again, but expecting a different result. Given that our political system has time and again proven to be deficient in providing for the pre-existing population, why should we trust it to adequately accommodate an addition 400,000 people per year?
Instead, why not reduce the immigration intake back to historical norms and give the political system (and the rest of us) some room to breathe?
