Australia Institute slams population ponzi

By Leith van Onselen

Chief economist at The Australia Institute, Dr Richard Denniss, has given a masterful interview on Sydney’s 2UE Radio, explaining in no uncertain terms why the drive towards a “Big Australia” is destroying Australian living standards:

“Since the Sydney Olympics, Australia’s population has grown by the population of Sydney. Australia is one of the fastest growing countries in the developed world and our infrastructure isn’t keeping up. It isn’t keeping up now and hasn’t kept up for the last 10 years, and it’s not budgeted to keep up in the next 10.”

“What politicians are doing is every year they announce record spending on this and a new that, but what they don’t point out is that on a per person basis, per person we are spending less on health, per person we’ve got less access to transport, per person the reason the queues in the hospital keeps getting longer is because we are not building hospitals as fast as we are growing our population. They all know it, they just don’t say it”…

“If you were going to invite a hundred people to your house for a party, you would probably put the food and the chairs out before they arrive. But, what we have done for nearly 15 years now is we’ve significantly increased the rate of population growth and we are saying “we’ll build rail in the future… we’ll build the hospitals in the future”. Yes, there’s no doubt that any minister can rattle a list of things they are planning to build. What they don’t say is that given that our population’s gonna grow by around 400,000 people this year, we are not building nearly enough hospitals and schools and roads to keep up with that. So, yes, there’s always a big pipeline, but what they are not telling you is that per person, the amount of infrastructure is declining. Per person, the amount of spending on health is declining”…

“If you want to double your population – and that’s our plan – we want to double our population – you have to at least double your infrastructure to maintain people’s standard of living… We’re talking schools, we’re talking hospitals, we’re talking trains, we’re talking roads, we’re talking police”…

“Population growth costs a lot… If you double the number of citizens then you double the number of teachers and double the number of nurses. It’s pretty simple math. But of course, you don’t have to double them if you gradually plan to lower the number of services. If you are happy for us to gradually lower the number of services in our health system, our aged system, if you are happy for congestion to gradually get worse, if you are happy for the amount of green space per person to decline, then you can do what we do. But the trick is at the moment is every budget – and all governments do this – every budget the minister says “I’m spending a record amount on health”. Well, of course you are, we’ve got a bigger population than we’ve ever had before. Every year has to be a record. But, their own data shows that on a per person basis, it’s just not keeping up”.

Brilliant. Couldn’t have said it better myself.

Little by little, Australia’s economists are coming out of the woodwork to publicly warn that high immigration is not an economic bonanza, and is in fact far more likely to damage Australian productivity and living standards.

If all we are doing is growing for growth’s sake, pushing against infrastructure bottlenecks, diluting our fixed endowment of minerals resources, and failing to raise the living standards of the existing population, where is the benefit?

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Comments

  1. If a larger population is so desirable, why is it that most of the people that are trying to migrate to Australia, are citizens of countries with larger populations than ours?

  2. Amen to all of the above brother
    Classic pollie response to criticism “We are spending more than the previous govt on X,Y,Z”
    Of course you are in nominal terms you apes, if you weren’t it would constitute a massive real cut.

  3. Its an illogical argument. Thats akin to saying that the aboriginal’s had a better standard of living before we arrived, just because there were less of them…

    The argument is not about immigration, but infrastructure. We are populated with Malcolm Frazier’s, i.e. who have all the power, but do nothing… population growth is essential for this country to grow, otherwise we will go backwards, aka most of Europe (and they had the benefit of several millennia of development).

    The fact is we don’t do enough infrastructure. We are not forward planning enough – we are being reactionary rather than being proactive…

    • “Its an illogical argument… The argument is not about immigration, but infrastructure”.

      Rubbish. The argument is about governments mindlessly going for the quick sugar hit – rapid immigration – without catering for that growth.

      Seriously, how can you pin the blame solely on infrastructure investment, or lack there of, when immigration places obvious strains on that infrastructure? They are two sides of the same coin.

      “…population growth is essential for this country to grow, otherwise we will go backwards”.

      You are once again confusing aggregate growth, which is meaningless, with per capita growth, which is what matters.

      “The fact is we don’t do enough infrastructure. We are not forward planning enough”

      Exactly. So why the hell would you want to run a high immigration policy? Show me the infrastructure and forward plan before going down the “Big Australia” path.

      • bolstroodMEMBER

        @UE
        “So why the hell would you want to run a high immigration policy”
        Because we are shit scared of the neighbours & want to fill the country up so we can “Defend ” ourselves.
        Oh…. & run a gigantic ponzi scheme & make lots of money….
        GO for Growth….. as we hit the limits of Growth…
        There is no end to stupidity of our policy dreamers.

      • bolstrood,

        The defence argument just doesn’t hold water, we grow to 50mil and Indonesia will be what? China what? Our defence isn’t a troops number game as we’ll always be out on a limb in the area, it’s tech that matters. Subs, ships and long range strike aircraft.

    • “The fact is we don’t do enough infrastructure. We are not forward planning enough – we are being reactionary rather than being proactive…”

      Right, so let’s stop the population ponzi until governments can show that they are able to provide the infrastructure that we need. They’ve completely failed us so far.

  4. notsofastMEMBER

    “diluting our fixed endowment of minerals resources”

    when talking about Australia’s endowment of mineral resources a word that needs to be included is “finite”. As time progresses extracting minerals in Australia is likely to become less and less economic as the best mineral resources are exploited and depleted. At some point in the future Australia and Australians is going to need to do something else besides dig big holes in the ground.

    • Excellent point, but right now Australia’s mineral resources are quasi-infinite relative to market demand. Just ask Andrew Forrest. The real question is where the public funds raised in the recent mining boom went and why weren’t they allocated to further develop public infrastructure? I’m guessing they went to subsidize Liberal tax expenditures instead so a fraction of the population could get wealthy off of increased demand for housing under a more open-door immigration policy. Is that the general theme that has been emerging?

      • bolstroodMEMBER

        30 years ago it was estimated that Australia’s coal reserves would last 800years at then extraction rates.
        2 years ago it was estimated that Australia’s coal reserves would last anther 80 years at then extraction rates.
        IO is a similar case.
        We sure got “better ” at extraction.

    • That’s correct NSF. The more people that live in any place, the less arable land, water, copper, gold, wave to surf there is per person in that place. We are all poorer as we populate to poverty. If rapid population growth and large populations were a key vector to prosperity, why aren’t Nigeria, Bangladesh, Indonesia or India leaders in personal prosperity?
      @Bolstrood, that old idea of populate the place so that others will not, is called mutually assured destruction. The idea that in the modern age, Australia’s defense depends on its citizens lining the coast with sharp sticks to ward of the invading hordes is so last Century! What you seem to be advocating is that Australia should overpopulate the place even more than it is currently, making it so environmentally degraded that no one would want to invade!
      Australia is already being colonized by wealthy foreigners who simply waltz up and buy the place. Time to enforce the laws there I reckon.

  5. BubbleyMEMBER

    “Come to my house for a bbq. You better bring some booze, food, plates and a gas bottle, ‘cose we dont have any. Maybe you should bring a barbie too”

    Welcome to Australia, 2015.

  6. Our biggest financial asset is our people. Migration is our saving grace. Demographics drive everything.

    Our long term outlook requires a growing younger population profile. Australia – as a result of migration (among other things) – has a great future.

    The next five to ten years (for mine) will be hard – R is coming & our demographic trends over the next ten years (ageing population & health expenditure increasing as a result) are a massive drag on our economy, especially without a magic elixir like a resource boom.

    But to call to stop migration is wrong. We need to change our tax system – away from property & towards business. We need to spend more on infrastructure and not the wanky stuff but stuff than matters – like water supply, sewerage, digital connectivity – it isn’t sexy but it is needed.

    And we all have to take a haircut. I often laugh, when my neighbours whinge about their rates going up $35 last year – whilst we are a restaurant & their entrée costs the same amount. And in the second mouthful, they want two free council picks next year plus an extra wheelie bin.

    It is about how we misspend our money. I don’t agree with you on this point, MB, our future depends on migration & attracting a young dynamic population. We don’t want to go down same path as many other western countries whose fundamental problem is that they are ageing & have no replacement population.

    • flyingfoxMEMBER

      We don’t want to go down same path as many other western countries whose fundamental problem is that they are ageing & have no replacement population

      Too late for that. Migration is not a fix for this in the long run. Also it is not just western countries but population growth rates have been plunging everywhere.

      What we need a model of society and economy sans population growth. This is what everyone will have to do. Why not innovate in that space and then let the market attract the young, skilled ones.

      • robert2013MEMBER

        It is shameful state of affairs when a human population cannot effectively perform one of the the most basic acts of life, that of producing offspring, It is disgraceful that our governments think it’s ok to import people to make up for our apparent unwillingness to reproduce. The are huge obstacles to raising children, most of which are the result of bad policy. The emphasis on Education rather than workplace training, high house prices, and costly regulatory regimes are just a few. It should be seen as a national crisis, instead it is roundly ignored.

      • flyingfoxMEMBER

        Agree to the extent that we don’t go around producing too many offspring. The world needs fewer, not more people.

      • Thanks for the reply

        As I have replied to MB (below), I am in the grow camp – but with appropriate caveats.

        We need workers. We need youth. Or we who remain, pay a lot more to keep our current lot. We cannot have less people & not pay more.

        True, regardless of our migration intake or rate of natural increase, we have to manage growth. We aren’t doing this well at all.

        This is really the whole crux of this discussion. We might need to slow down things – migration wise for a period – to help sort things out, but as a long term strategy I disagree with the go slow motif.

        I can be convinced otherwise, but I need to see substantial evidence.

      • We need workers. We need youth. Or we who remain, pay a lot more to keep our current lot. We cannot have less people & not pay more.

        Implicit in this statement is the argument that we cannot increase productive output without increasing population.

        On what do you base this premise ?

    • “But to call to stop migration is wrong”.

      Where have I called to “stop immigration”. This is a straw man argument. All I want is moderate immigration – similar to what occurred before Howard opened the flood gates in the mid-2000s – along with some decent bloody planning and infrastructure investment.

      The ponzi scheme Australia is running has nothing to do with boosting living standards – the opposite in fact – just as Dr Denniss has beautifully summarised.

      Besides. the Productivity Commission has shown convincingly that the ageing population is caused by longer life expectancy, and that rapid immigration can only delay (not solve) the problem.

      Australia needs a productivity agenda, not a ponzi (productivity-destroying) agenda.