Australia’s destructive march towards mega-cities

By Leith van Onselen

Back in July, the Victorian Department of Environment, Land, Water and Planning updated its population projections, which forecast huge growth in Victoria’s population to 10.1 million by 2051, with Melbourne’s population climbing to an insane 8.0 million by 2051 from 5.9 million as at June 2015:

ScreenHunter_14066 Jul. 17 17.20

And the lion’s share of this population growth is projected to come from net overseas migration (NOM), which is expected to ramp-up over time:

ScreenHunter_14065 Jul. 17 17.19

It is worth pointing out that in the 55 years from 1960, Victoria’s population increased by 3.1 million from 2,888,290 in 1960 to 5,996,385 as at 2015, representing growth of 56,500 people per year.

Under the Department’s projections, Victoria’s population is projected to increase by 4.1 million to 10.1 million people in just 36 years, representing annual growth of 114,000 people per year – roughly double the prior period’s annual intake.

Commenting on the results, Peter Seymour from the Metropolitan Planning Authority claimed that the rapid population projections does not mean that Melbourne’s livability will be reduced:

“I think that Melbourne’s doubled in population since the ’60s and is probably a more liveable city now than it was in the 1960s,” Mr Seymour said.

“Now all we’ve got to do is make sure in the 2050s we’re a more liveable place than we are today.”

Earlier this month, the New South Wales Department of Planning & Environment released their population projections, which forecast that the state’s population would rise to 10.5 million by 2041 from 7.7 million as at 2016:

ScreenHunter_14920 Sep. 13 15.35

With an increasing share of this growth coming from net overseas migration (NOM), which is forecast to account for 69% of the state’s population increase in the five years to 2041:

ScreenHunter_14921 Sep. 13 15.38

As shown above, Sydney is expected to account for most of the state’s population increase.

The next chart shows the projected annual increases in population, with Sydney’s population expected to rise by an average of 85,426 people per year over the next 20 years:

ScreenHunter_14923 Sep. 13 15.43

Commenting on the projections, Planning Minister Rob Stokes claimed they were a “symptom of Sydney’s success”, and “the growing pains of a great global city”. He also said that Sydney faced a choice between “a Shanghai route or a Barcelona route in terms of the shape of our city”.

KPMG’s Bernard Salt recently published population forecasts of his own, which projected that the population’s of Sydney and Melbourne could climb to 11 million by the end of the century:

ScreenHunter_13778 Jun. 30 09.25

I find these population projections truly horrifying. Sydney and Melbourne are already straining under 12 years of rapid population growth and are ceasing to function properly. So I hate to imagine how badly they would operate in the event that they roughly tripled in size. They would become a nightmare to live in.

Australia’s population has already reached a sufficient scale and is now big enough to void the need for continued mass immigration. This way, we could begin to repair our infrastructure deficit and the strains caused by rapid population growth, not worsen them.

The key question policy makers must ask when considering a “Big Australia” agenda is: would it improve the living standards of the existing population? If the answer is “no” or even “ambiguous” then caution warrants cutting Australia’s immigration intake to more sustainable levels. Immigration should not be used as a lever to artificially pump-prime economic activity for the benefit of big business and the property industry.

Do we really want our children and grandchildren to grow up in an Australia where most live in cramped apartments and a backyard is a luxury? Do we really want to raise battery kids rather than free range kids?

Where is the plan to cope with this population explosion, and why is it desirable? And how do our politicians propose that our big cities accommodate this never-ending flood of people without adversely impacting existing residents’ living standards?

The case for a “Big Australia” has never been made, which is why Australia desperately needs to have a national discussion about population policy before the situation gets too far out of hand.

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Unconventional Economist

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith is an economist and has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

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Comments

    • Is it interest rates? Is it nice low interest rates that promote growf?

      Or that other centrally-set parameter – free land supply?

      • You mean a free supply of ex-fringe land is something that is sometimes denied by bad central planners. Generally it goes along with mis-management, and the consequences of the mis-management are a significant pretext for imposing the land rationing policies.

        On the other hand, better management often goes along with the rapid growth, with new municipalities literally being incorporated for new master planned communities – ensuring something resembling genuine competition between municipalities. Freedom of entry of new suppliers to a market is a crucial element in true competition, otherwise all you have is an oligopoly. Local government is mostly like a natural oligopoly, the system in some States of the USA that breaks this stranglehold, is pure genius.

        Local government everywhere in this day and age, has lost its direction regarding its core responsibilities, they have lost control of their costs, and they make “new development” a scapegoat for their problems, rather than focusing on undoing “mission creep”. The central planning they then adopt, is the biggest and most destructive mission creep of the lot.

        Time will tell whether the USA’s rapid-growing, “competition in local government” cities will turn decadent one day along with the rest of western civilisation – until then, they have to become increasingly noticeable as performance outliers.

  1. The estimates of Brisbane are way off. By 2101, it will link up with Gold Coast and Sunshine Coast for about 8-9m.

    • What have central planners anywhere succeeded in doing by targeting density, apart from dire increases in traffic congestion, average commute times, and housing unaffordability? Across the data set of cities globally, there is no clear correlation between density and performance of any kind. Apart from a correlation between density and housing unaffordability. All the systemically affordable cities happen to be low density; forcing increases in density always pushes land prices up faster than density increases, making everyone pay more and more for less and less space.

      There is very little difference in congestion delays and average commute times across the data set of low density US cities versus medium-high density European cities. The outlier-high cities are London and Stockholm. There is no low density outlier-high city.

      Some of that author’s density calculations appear to be skewed against reality, almost certainly due to where the “urban area” boundaries are drawn and what low-density zoned areas at the “fringe” have been included. Auckland, NZ has been defined by Demographia, the Lincoln Institute, and the Bertaud’s, as having a density somewhere between Toronto and Brussels. I do not trust this author’s finding; even visually, Auckland is an obviously crammed city. One contributor to this is an outlier-low proportion of its surface area devoted to streets – refer to the UN Habitat Program report, “Streets as Public Spaces and Drivers of Urban Prosperity”. It may appear to have less “dense housing” than some European cities, but it has more of its surface space “built on” than they do. An article in the NZ Herald last year also found that on the Isthmus comprising Auckland central and its suburbs, there were just 7 properties remaining with 1/4 or more of section – all the rest long since subdivided and infilled.

      • Skippy, your reply seems to be intended for some comment other than mine, I can’t see any relevance to my comment. Or anything on this thread, for that matter. Anyway, rate swaps and derivatives are not any more inherently destructive than insurance; if the insurance industry made some massive mistakes with pricing the risk of some event that then occurred, they would be in trouble too. The problem in 2008 was that the risk of a proper house price crash had not been priced in, and that was largely because there had not been such a crash for decades. On the other hand, there had not been house prices bubbling to median multiples of 12+ as in several Californian cities, which if it was not for them, “2008” would have been just another typical cycle end in the US economy. And those cities had chokes on the supply of additional land to the urban economy. The heroes of “The Big Short” specifically targeted mortgage-backed securities from California, there was no point targeting much else.

        Economies can be got into dire trouble by urban land market distortions, period, regardless of derivatives and swaps. In fact historically the severity of recessions correlates to urban land price volatility and financial markets are a red herring. This holds good for the 1929 era and the many chronically repetitive cycles preceding. Automobile based addition of abundant potential land supply to urban economies solved a BIG problem for several decades.

      • Hay Phil….

        Its in relationship to local and state government budgets and how they were geared to income expectations wrt extremely complicated financial products. If you need me too I can drag up all the particulars, it covers the whole gamut of infrastructure and other public services, including public servants wages.

        That went poof.

        Disheveled Marsupial… the perspectives by Kline and Mirowski’s description of Disaster Capitalism would seem applicable…

      • I would add that your perspective that the “Big Short” is some sort of authoritative reading on the subject matter is misplaced e.g. the shorters actually acerbated the problem as they increased the momentum swing wrt the correction. Lest we forget the “Big Short” was a popular novel and not an academic introspection of events to increase book sales. I would juxtapose Yves Smiths “Econned” for a more nuanced perspective with the attendant rigor in delving into the topic matter.

        Further more the land had little to do with it, nor did historical norms, as securitization created an investor demand pull seeking both yield and cash flow expectations. I think the court cases against JPM alone make that evident, your applying apples and oranges here, what occurred historically has completely different environmental factors.

        Yet at the end of the day the RE dramas only made a much more fundamental aspect wrt underwriting and risk assessment, to a wide swath of credit issuance, open to polite discourse.

        Disheveled Marsupial…. you seem to be operating on the purview of someone like Peter Schiff.

      • There weren’t derivatives in the 1920’s.

        There weren’t derivatives in Spain in the 2000’s. Which economy is in the bigger mess still, the USA’s or Spain’s? Does Spain have some powerhouse growth cities and States bouying up the national aggregate? This happens to be connected, in the USA, with the stable-price land supply cities and regions.

        Peter Schiff knows nothing about urban land values and cycles. He is a gold-standardista.

        “The Big Short” by Michael Lewis was NOT a “popular novel”, your ignorance is showing.

        Derivatives as deployed to advantage by people who saw through the house-price insanity, was little more than a separate “gambling market”. The people who took the long side were losers through their stupidity. I agree that this needs regulation, but the principle is basically “insurance” and need not be harmful.

      • It matters not if there was OCC derivatives in the 1920s, as they had their own equivalent of incoherent mathematical level of corruption and as stated before land was only a small percentage of that entire credit event e.g. to state that all credit events are fundamentally driven by land is not historically accurate or are you arguing tulips et al were. It seems your entire premise is only based on land or property and completely dismiss everything else.

        Anywhoo I will defer to this example and await your response –

        “I hate to give any attention to Michael Lewis’ The Big Short, since the wildly popular book told a fundamentally misleading story of the crisis which sadly has become conventional wisdom. And it wasn’t just harmlessly inaccurate; it directed public and even lawmaker attention away from the real drivers of this debacle.

        Absent the actions of the subprime shorts that Lewis lionized, the US would have suffered a S&L-level housing criss (which at the time was seen as a serious blow to the banking system and the economy), not a global financial crisis that came perilously close to taking down systemically important capital markets firms around the world. And let us not forget that the way in which the financial system was rescued represented the greatest looting of the public purse in history.

        But the fact that the movie based on the book is now out and getting a lot of attention in the media and even among people I know, it seems necessary to remind readers how the book has done a great disservice by deceiving the public. And that includes influential members of the public; Politico reported that “‘The Big Short’ has been mentioned at least 15 times on the Senate floor and in press conferences and committee hearings.”

        In fairness, Lewis did a good job of explaining in laypeople’s language how out of control the subprime market was and how CDOs worked. But he was hardly alone on either account; Gillian Tett’s Fools Gold has a terrific primer on CDOs, and there were plenty of other fine accounts of the lunacy in the subprime market (but in fairness, some of better long-form treatments, like All the Devils are Here, by Bethany McLean and Joe Nocera, were published after The Big Short, and thus lost the “first/early mover” advantage). Greg Zuckerman’s The Greatest Trade Ever is a much more comprehensive overview of the subprime short, and was released a good four months before The Big Short, but lacked its novelistic style, in particular, the reliable Lewis formula of “oddball outsiders take on the Establishment and win big”.”

        http://www.nakedcapitalism.com/2015/12/debunking-the-big-short-how-michael-lewis-turned-the-real-villains-of-the-crisis-into-heros.html

        Disheveled Marsupial… I would like to point out this is not a pissing contest, but, an exploration in determining fact from for profit narrative…

      • Skippy:

        “…in the 1920s, as they had their own equivalent (to derivatives) of incoherent mathematical level of corruption and as stated before land was only a small percentage of that entire credit event…”

        Oh, I get it. You are just making stuff up to try and confuse genuine observers who want to understand this subject better, probably because your ideology is uncomfortable with the conclusions that can be drawn from the facts. Either you are just making stuff up out of sheer unwillingness to ever bother to study the facts themselves, or you know what the facts are and you are deliberately lying in the service of some agenda.

        To say that land was only a small percentage of the 1920’s credit event is either a blindly ignorant bluster or a deliberate lie.

        So is the claim that there was anything similar to derivatives at that time. So are your claims about Michael Lewis. Lewis did NOT “lionize” subprime shorts; as with his earlier book, “Liar’s Poker”, he deplores the widespread confusion of the public at the hands of wide boys in the finance sector. His articles about house price bubbles are superb, especially the one on Ireland. He is a valuable investigative and informative writer on issues that need “a public look behind the smoke and mirrors”.

        I do hope he turns his attention to the smokescreen and red-herring stooges who infest the subject of urban land and its supply, of which there are several exemplars among the commenters on this site (in contrast to the estimable main article authors). Australia is going to pay dearly for being mass suckers for this stuff, and sadly it is not alone in that. I expect a Michael Lewis article, if not a book, dedicated to Australia in particular – it has about it, that it had the negative examples of other nations to be warned by, but believed that it was possible to be “different”, really possible to ignore gravity forever. The story of Icarus comes to mind.

      • Phil…

        Do try an evidence base approach and retort accordingly to the information I have proffered, your emotive non evidenced based approach filled with superlatives is a poor substitute.

        Disheveled Marsupial… you have not, so far, attempted to actually provide an argument contrary to the one I have offered, but run off into the fog about suppositions as informed by a well known elitist narrative novelist that has a penchant for blending a bit of fact with embellishment for book sales….

        PS… Oh now I understand your one of those Texas template people…. my bad….

      • Look who’s talking! I’ll leave it to the audience to work out who is the snake here.

        PS: it is not so much a “Texas template” as “decades of macroeconomic stabilisation, increase in home ownership, improvement in housing standards, elimination of extractive rent and wealth transfers in urban land, in almost all first world countries, coinciding with automobility”. Texas just happens to be the one place that has continued refining the concept even while nearly everyone else was suicidally abandoning it. But several US States still have cities that match or exceed Texas cities housing supply elasticity.

      • Phil…

        You have still not not responded to my objective points above but dance around them.

        Here let me respond in kind… shit is cheap in Texas because noone wants to live there and wet backs are cheap labour, so in order to get people to move there they have to lie… its like the modern version of Greenland or Dubai…

        Disheveled Marsupial…. lol my brother whom is a dyed in the wool republican with military service in two branches relocated to Montana because it suxed….

      • Skippy,

        The definitive data on land value fluctuations is to be found in Phillip J. Anderson, “The Secret Life of Real Estate and Banking”; and in Louis Winnick (1953) “Wealth Estimates for Residential Real Estate”. You could learn a lot from the latter’s comments on the role of automobile based development, and the former’s comments on the significance of urban land in economic cycles.

        Charles Kindleberger, Manias, Panics and Crashes: (p103)
        “Real Estate Loans, not failed stock broker accounts, were the largest single element in the failure of 4800 banks in the years from 1930 to 1933”
        (Andersons’ comment) “….it was the decline in urban US property prices (a non-monetary cause) that was the real killer, because of credit-creation and poor real estate lending…”

        Anderson: P247 “…The causes and effects of the 1920’s stock market boom and bust are still much debated today…Historians and market forecasters would do better to turn their attention to the concomitant real estate boom and bust…A land price collapse has far wider implications than a mere stock market crash. They are not in the same league…”

        Anderson P355 “…The crisis at the end (of the cycle) always comes in an environment of rising interest rates…Such events only bring a downturn because so much credit was created in the first place to finance the purchase of government-granted licenses, the largest of which is land value……The credit tightening is most dangerous when prices have been permitted to rise to unaffordable levels….”

        Yes, yes, Houston is such an awful place, that is why it grows at 10 to 20% per decade; California was cheap in the 1950’s and 60’s so it must have been awful then and it must have become utopia since then, to cause the high property values, it can’t be anything to do with land use regulations. Liverpool and Sunderland must be utopias, to explain urban land prices dozens of times higher than Houston. We have had this discussion a zillion times before and I am acutely aware of the contemporary plague of bottom-feeding scum who are intellectual enablers of fiscal child abuse. Of course such people will never repent in the face of facts and reason.

  2. ” He also said that Sydney faced a choice between “a Shanghai route or a Barcelona route in terms of the shape of our city”.”

    Well if he wants to go the Barcelona route he should stop now.. Greater Barcelona and Sydney aren’t much different in population size or density as its stands. Both are quite pleasant and livable. Shanghai, by contrast, is a monotonous concrete jungle as far as the eye can see (outside the historic area of the Bund which is home to only a tiny elite fraction of the population). I note that the plans for Sydney also forsee the areas inhabited by the elite (in Lower North and Eastern suburbs) to remain much as they are with only very low population growth, while the rest becomes a rapid growth, high density hell hole.

  3. “Do we really want our children and grandchildren to grow up in an Australia where most live in cramped apartments and a backyard is a luxury?”

    Apartments are much more environmentally and economically sustainable than everybody having a backyard. It’s a much better use of space, especially this is important around key transport hubs. Apartments are increasingly energy efficient and can provide both amenities / employment in the form of shops and maintenance staff.

    Well designed apartment blocks often have quality green space around them, so the point about battery kids is a bit over the top I think.

    I do think we need a plan to better handle population growth, this should involve more investment in rapid transport, and better patterns of quality urban planning to achieve liveable medium / high density areas throughout our big cities (looking at you, eastern suburbs). Immigration levels are fine, we just need to build more, and build better to make the most of it.

    • Agree 100% with that Kipron4747. If anything we should be stabilising population *and* densifying at the same time.

      • Definitely! There’s no reason we can’t have both. And now that the genie is out of the bottle it’s really the only route forward.

    • It’s the “well designed” bit that seems to challenge us. Also, for apartments to really work for families, the entire city needs to work around that. Neighborhood free play centres. Many more and better parks. You know, community instead of castles?

    • Kipron4747,
      You talk a lot of crap. You are the sort who would spend all day arguing that a bike is better than an SUV and that WE ALL SHOULD RIDE BIKES ALL OF THE TIME.

      At this stage of my life I would prefer a house with backyard to a unit, however I strongly support the building of excellent units for other people to live. I like competition. I like the idea of all those concrete-lovers getting out of my way and leaving the decent backyards to me. I also like the idea of a great cheap unit being available to me. I might buy a few and keep them for a rainy day.

      The problem with unit construction in Sydney is that the supply is choked resulting in exceptionally high land price. This outrageous land price prevents developers from creating excellent units that you allude to. They are forced to cut every corner and concrete every square inch to turn a profit after land cost.

      I would like to see a situation when an old person in a rundown house with backyard decides to buy one of the recently built units next door to him, but is worried that the market value of his house and backyard will not be enough to pay the market price of the excellent new unit. His children might have to chip in to help him. That would be a successful housing market.

      • “You talk a lot of crap.”

        Sorry to disappoint but I speak from experience. You think Sydney’s apartments are a squeeze? Haha. You haven’t seen anything yet. Have you been to Tokyo? A 1 or 2 bed apartment in Sydney is mansion-sized by comparison to what you get in Tokyo, and also costs a lot less relative to incomes.

        “At this stage of my life I would prefer a house with backyard to a unit, however I strongly support the building of excellent units for other people to live. I like competition. I like the idea of all those concrete-lovers getting out of my way and leaving the decent backyards to me.”

        You’re welcome to your backyard, but you’ll have to go out to the suburbs where space is at less of a premium.

      • You think Sydney’s apartments are a squeeze? Haha. You haven’t seen anything yet. Have you been to Tokyo?

        Ah ha Dutch Benchmarking!

        Look how good we have it! I have found somewhere worse.

        How dare you tell me to lower my standards just because you have been somewhere worse. You take your low standards back to where you came from. I want things to improve for humanity. Housing was better and now it is getting worse.

      • Sorry to disappoint but I speak from experience. You think Sydney’s apartments are a squeeze? Haha. You haven’t seen anything yet. Have you been to Tokyo? A 1 or 2 bed apartment in Sydney is mansion-sized by comparison to what you get in Tokyo, and also costs a lot less relative to incomes.

        Why is this a desirable state ?

        Japan, at least, has the excuse of being tiny and full of people to justify cramming people in like sardines.

        Australia is enormous, and empty. Every household in the country on a 1/4 acre block is equivalent to about 1/8th of Tasmania.

      • “You take your low standards back to where you came from”

        I can feel the misplaced resentment from here! I’m from Sydney, thanks.

    • Environmentalists in the 1970’s were mostly about sustainable WAYS of living, including “off grid” and “back to nature”. And technology. This still is a perfectly rational course – the frenzy of forcing people to live like battery hens is a fraud driven by the major owners of city land. How much higher does the price of land in a given central area rise when captive renters are forced in there in their droves? Note that Hong Kong, 26,000 people per square km, has a de facto house price median multiple of 15 – 17 while Atlanta, 700 people per square km, has one of <3. Guess what is the difference in the value of a given unit of land?

    • Nonsense. Its by no means clear that denser living is more environmentally friendly. Such analysis always rests on a bunch of heroic assumptions that never play out.

      Australia is a vast country with enormous amounts of habitable land. Why box yourselves in for no reason?

      Can anyone point to a city of greater than 4M that provides a great environment for its citizens?

    • “Well designed apartment blocks often have quality green space around them, so the point about battery kids is a bit over the top I think.”

      Yeah ….. and there are SO many of these around aren’t there.

    • Looks like you’re fighting an uphill battle against the troglodytes Kipron4747. The fact is we don’t have a choice. You can’t have 50 million people living in McMansions with two SUVs in the garage 20km from anything. It just doesn’t work.

      • Yes, I suspect most people here wouldn’t be very good at playing Tetris: trying to have one column per tile is the best way to lose fast. You have to stack them!

      • You can’t have 50 million people living in McMansions with two SUVs in the garage 20km from anything. It just doesn’t work.

        Why ?

        That’s ~25 Brisbanes.
        Or a ~130 Canberras.

        Or something in between.

  4. reusachtigeMEMBER

    The more people the better in my opinion. It will give greater choice and increase the pool of good lookers. I’m all for it. Bring it on!!

    • Yeah Reusa, however, you do have to fear the day when everybody around you is beautiful. And when everybody around you is beautiful, nobody is 😀

      • Impossible. According to the Law of Real Estate, ugliness is directly proportional to the square of the distance from reusa’s residence.

  5. Your political masters have decided that citizenry is better sold than respected.
    In our case ” yesterday is another country ”
    Get ready to become expats i your own country.

    Went to an induction for a our 5 year old at Ermington P.S. 60%plus chinese. (Perhaps a few Koreans)

  6. I think our dear leaders need to do a study tour of Asia and it’s mega cities. This would be at a backpacker standard mind you, so they can truly experience what life is like in cities with 12+ million people.

    A week in say Jakarta and then a short hop over to Manila should allow them to experience the joys of congestion. Certainly need to arrange meetings all over the city so they can get the full monty.

    A few days in Beijing and then Shanghai should round things out quite nicely.

    Where’s the political party that can keep race out of the population discussion and help those already here put a voice to their falling standards of living due to insanely high population growth.

    • Houston and a few other US cities are showing the right course to becoming a properly functioning megacity. Adding master planned communities with their own “local government”; a low, flat urban land price curve ensuring maximum location choice for all and maximising co-location efficiencies as employment disperses; and a good solid rate of intensification in the central area where it is needed, driven by genuine demand, cluster development, and lack of “site banking” and rentier gouging opportunities.

  7. TailorTrashMEMBER

    “symptoms of success” …..” The growing pains of a great global city ” ……….what drivel ! ……..how about we have plans to preserve what were great Australian cities
    for the Australians whose homes they are ? …………what is it with Australian politicians ? …..they get elected to represent their local constituents and their intrests and well being and then get all bloated in the head and start thinking ” global city ” …….and “China China China ” …(of course they are bought and paid for and need to keep they money comming in to fund their safe tenure in Parliment ) …small wonder Pauline is in the senate ……her maiden speech to night might let off a few fire crackers ………

  8. The urbanization of employment (especially tertiary educated employments) is a global phenomenon so good luck stopping further urban growth.
    Now we’re lucky in Australia that we do have a lot of available land surrounding our Mega cities where several million families could all live on acre plus blocks. What we need to do is make these extra urban areas actually preferable to a skybox in Sydney or a dogbox in Melbourne. IMHO this starts with making the extra urban schools much better. There’s a joke amongst teachers marking the HSC exams, that it’d make the job much easier if the HSC exams were simply pre-sorted by postcodes, because in the end analysis that’s all they find that exam marking achieves. Reality is that the top 100 high schools in the state never really change they just swap positions on the list. Practically every student from these top 100 schools will achieve a high Atar and qualify to go to one or other of the sandstone group-of-8 unis.
    Lets compare this with the results from the forth largest urban area within NSW (Coffs Harbour). Coffs has 4 public high schools and ALL score in the bottom 20% of the state for HSC Atar’s. Year in year out same result same top 20% same bottom 20% and it’s all easily predicted by postcode. It’s rare for any students from those bottom 20% schools to ever achieve an atar that’ll get them into a sandstone uni, instead they routed directly to the myriad of rip-off for profit degree/diploma/certificate factories that dot the landscape. It’s all very predictable…but you know what it’s all very easily changed.
    Imagine we all simply decided to create and properly fund / staff an excellent high school in Coffs. It’d cost maybe $3M pa to run and be producing top 100 school results within 6 years. Guaranteed,…. the kids there aren’t stupid they’re just dealt a really shitty hand when it comes to education…unfortunately this feeds-back into the local economy and before long everyone and everything under performs….That pretty much describes Coffs today.
    IMHO If you ever want to make extra urban Australia attractive you need to start with the schools.

    • China Bob, my son attends a public high school not too far from Coffs. They don’t teach IT past year 8, and they think this ok. True!

      • A friend from Coffs tells me that most of the kids in the area will graduate high school without ever achieving Math skills above year 7 level, so I guess year 8 IT is an improvement on that, a sad but true tale.

      • It’s encumbent on the parents too.

        I personally will be ensuring my son is exposed to coding/analytics/engineering thinking outside school by dint of what I do.

        I am 2 hrs north of Coffs also in a regional area and sure as hell won’t leave it to the school system to future proof him with a reasonably fungible and transferrable skill base, as well as an ability to master things.

      • @Superunknown…No argument from me, the parents have to also care. However this is also a big part of the self reinforcing feed back / forward loop, which delivers caring parents to the Sydney RE monster.
        Those parents that do care about education know these statistics and understand the disadvantage that they are creating by sending their kids to under-performing regional schools. My friend tells me horror stories about his son’s English teacher (for year 11 /12 advanced English) the woman only showed up for class half the time, was totally spaced out on Oxycont pain killers (for a back injury), never handed back assignments and was completely clueless about the Essay refreshment process that was necessary to achieve band 5/6 results for the HSC. You can add to this the fact that many of the students will never even really try in the exams…you hear stories of half the class not even turning up for the HSC exam…This matters because it adversely effects the Atar raw score adjustment process. Result is even the best students from regional Australia get punished for the under-performance of their school friends.

    • My point is that even as an experiment for $18M total expense, we could do this experiment. $18M is the cost of 18 Sydney homes. Succeed and you could expand the Urban pull area for top 100 schools by several hundred square kilometers enough area for more than 1M homes. Of course by never trying we fail to expand our “desirable” living areas and guarantee that the $1M price per house Sydney price is $2M within 10 years….I sometimes wonder if that outcome shapes every decision within the matrix. Any decision that would / could prevent the doubling of Sydney RE prices is roundly rejected ,and for good reason because 80% of the states population just don’t want to kill this golden goose they call Sydney RE.

    • So true, Bob. Why are the regions starved? Couldn’t have anything to do with feathering the nests of political donors whose rent seeking interests are located in major cities by any chance?

    • Bob, do you have any data that has tracked the postcode lottery over time ?

      I’m curious to see if/how it has changed. Because I am thinking back to the mid-90s when I finished high-school and our little town (Yeppoon) state high school had four OP1s and from memory another half dozen or so got an OP2 or OP3. Admittedly we were an unusually high-performing year, but even in the years before and after there were TEs of 990 and more OP1/2/3s.

      If I’m reading your comment right this is pretty uncommon these days ?

      • I don’t know that much about Qld or Vic education, I get the feeling that the education outcomes (city vs regional) are not as clear cut in Victoria and I’m clueless about Qld.
        As for NSW these are real results, I’m doing what I can personally by funding several scholarships, a friend in the region gives me a list of names for high achievers, that will benefit from a better education, and I do what I can to enable this outcome. Unfortunately this usually means the best and brightest get stripped from the local state school system, and sent off to private school Sydney…this is the polar opposite to that which is needed…but what can you do?

    • China-Bob

      “The urbanization of employment (especially tertiary educated employments) is a global phenomenon so good luck stopping further urban growth.”

      Do you mean the SUBurbanization of employment growth?

      Peter Gordon et al have been noting this re the USA, for decades. There are also papers confirming the trend, by Alex Anas et al, and one by Glaeser and Kahn.

      In Australia we have Ross Elliott tracking the trends, and they are undeniable.

      http://thefingeronthepulse.blogspot.co.nz/2016/08/peak-cbd-part-ii-more-on-where-urban.html

      • This is “THE” path by which cities can gain the agglomeration benefits of mega-city overall size, but the citizens can happily function within geographical sub-portions of the whole. As long as the growth is free and of the kind I am pointing out in other comments here, that keeps the land price curve low and flat, so there is maximum location choice for all, and maximisation of co-location efficiencies. All the cities with outlier-high average commute times, such as London, suffer direly from a “pricing out” effect or a spatial sorting of the population on the basis of “ability to pay”, which swamps other inputs that would be more efficient.

  9. Here, and thanks to UE and HnH the ‘immigration problem’ goes by its ‘right name’ Population Ponzi, and being a Ponzi it can and will go into reverse. I hear the murmur of anti Asian racism from students at the school and these are no doubt a reflection of talk at home. It is ugly but it should be remembered its both Australians and the newcomers that are being conned in the longer run.

  10. And yet you continually argue that we don’t need fast rail. As a Xer who is priced out of Sydney I would move to Newcastle in a flash if there was a fast train. If the crash doesn’t happen I’ll (along with all my freelancer friends) will be moving anyway pretty soon . . .

      • That Newcastle IS already more than a commuter town it what appeals to me about it. If we had fast rail it would stop suburban sprawl (like on the Central Coast/Lower Moutains) of people who can’t afford Sydney but still need to access it. Towns like Utrecht in the Netherlands or Birmingham, Bristol, Rugby etc that are within an hour of major cities are much more defined when there is quick access as people are not stranded somewhere between the two.

    • Felixfrost,
      The alternative would be to put your computer, phone and desk in a removalist truck and take it permanently to Newcastle. Then put your elite sack-of-shit boss in a taxi and move him there too.
      Much cheaper than building a fast train.

      • Except that I have many bosses. And need to travel to them occasionally. I have friends who have moved out of Sydney and tried to keep their businesses going – but they are now saying after 5 years or so their clients are dropping off because remote access isn’t as good over the long term.

  11. I find population estimates beyond maybe 20 years a bit like economic projections [predictions] 5 to 10 years out and any VaR more than 3 to 6 months in normative terms….

  12. It is a great pity that the rise and rise of the City State – which is another term for the MegaCities – is based not on rational function or design, but it is an expression of a broken economic model from past centuries. None of our leaders is saying that given the changes in energy, internet, jobs that the MegaCity may not be a good way to run a civilization. Quite the opposite – they see the Megacity as the immutable constant and whatever comes our way will be jammed, somehow, into that model. Slums, social dysfunction, debt, waste and corruption – anything to avoid rocking the boat.

  13. Ever increasing NOM seems a ballsy assumption in a time frame where the populations of countries like China are expected to shrink sharply and even population growth in India is likely to have fallen sharply.

    • Increased wealth and certainty in meeting basic needs plus a few niceties does highly correlate to reduced birth rates, except for a few outlier traditions.

    • If you have issues with the Chinese you can always talk to them, and if you do it in the right way, they are usually pretty responsive (i.e. you’ll the response you want – that’s the benefit of the group collective culture and the fact that they usually don’t like rocking the boat).

    • When the Australian Catholic University was asked if it had plans to introduce more affordable accommodation, it had no comment
      Nice. Why do we give those scoundrels tax-exemptions again? Given billions in tax and can’t be bothered to comment on an issue of great public interest. Jesus would be spinning on his cross.

    • Minister for Innovation and Better Regulation Victor Dominello noted it was an issue of vulnerability, not affordability, and said students could find cheaper accommodation further down the train line, instead of “simply choosing to live in battery hen accommodation”

      Help me out here Victor where exactly further down the train line?

  14. Diogenes the CynicMEMBER

    The Perth numbers are ridiculous – with the climate changing our lower rainfall means no water into dams and aquifers are drying up. We can barely support the existing population’s water consumption, note 2 desal plants now supply 50% of water needs for Perth. We could of course build more desal plants but than seems kind of backwards right?

  15. With that net immigration the AFL clubs are going to have to have a draft or else some clubs will have too many supporters. Hopefully the very capable Victorian govt is managing this emerging crisis.

  16. There’s already so much traffic in inner Sydney any time of any day, how will the additional people get around?

    If you take a look at fast growing cities like Shanghai, Beijing, Seoul or even in Europe like Moscow – all of them have massive subway systems which dwarf our shitty one – but what’s more, all are massively expanding their subway system (MASSIVELY) to cope with population growth. All this is being done in just a few years.

    Meanwhile, it takes 10-15 years to plan out, design and build 10km of track and 5 stations here. What chance do we have? We are a country that is chronically incapable of meeting our infrastructure needs.

  17. The key question policy makers must ask when considering a “Big Australia” agenda is: would it improve the living standards of the existing population?

    The measure that proponents use is whether the country’s average GDP/person is increased by bringing in a working person who is assumed to be working when he/she gets here. Of course this improves average GDP/person in a population where only half of people are working but it completely ignores the fact that a working immigrant usually won’t be working for the rest of their lives and will usually want to have children who won’t be working for their entire lives either.

    So the measure used for evaluating economic benefit is blatantly biassed and shamelessly misleading.