The evidence is clear: population growth and prosperity are NOT linked

By Leith van Onselen

This site has gone to considerable effort to demonstrate why high population growth (immigration), as advocated by Australia’s major political parties, is very likely  lowering the living standards of existing residents.

ScreenHunter_15215 Oct. 02 18.45

Since 2003, Australia’s population has grown by a whopping 22% – way faster than other advanced English-speaking nations and 2.5 times the OECD average:

ScreenHunter_15563 Oct. 18 16.52

Since the immigration flood gates were jammed open in 2003, Australia’s per capita GDP and disposable income has grown at an anaemic rate compared to the previous corresponding 12-year periods (see below charts).

ScreenHunter_15534 Oct. 17 15.59 ScreenHunter_15535 Oct. 17 15.59

And this comes despite growth in the terms-of-trade being most favourable across the most recent 12-year period (see next chart).

ScreenHunter_15536 Oct. 17 16.01

When viewed alongside qualitative measures like traffic congestion and housing affordability, which have clearly worsened as the population has exploded, there is a strong case to be made that Australia’s high population growth strategy is very likely lowering individual living standards.

Yesterday, I spent many hours crunching OECD macroeconomic data to determine whether there is a link between population growth and economic prosperity.

The first chart below is a scatter chart plotting the change in per capita real GDP against population over the years 2000 to 2015 across the 35 OECD member nations (Australia is shown in red):

ScreenHunter_15572 Oct. 19 17.17

As you can see, there is no statistically significant relationship between the growth in the population and per capita real GDP across OECD member nations.

The next charts delve deeper and plot the change in population against measures of productivity. As explained by the Productivity Commission (PC):

Productivity growth is a key source of long-term economic growth, business competitiveness and real per capita income growth. It is an important determinant of a country’s living standards and wellbeing.

There are two broad measures of productivity:

Labour productivity (output produced per unit of labour input) measures efficiency in the use of labour. Growth of labour productivity is the growth of output over and above the growth of labour input — it not only measures change in the efficiency of labour but also captures the value added from growth in capital (and more advanced technology intrinsic in the new investment) that supports increased output without increasing labour.

Multifactor productivity (output produced per unit of combined inputs of labour and capital) is the measure that comes closest to the underlying concept of productivity — efficiency of producers in producing output using both labour and capital. Growth of multifactor productivity is the growth of output over and above the growth of combined labour and capital.

The first chart shows the relationship between population growth and labour productivity growth across the 35 OECD member nations over the period 2000 to 2015 (Australia shown in red):

ScreenHunter_15573 Oct. 19 17.26

The second chart shows the relationship between population growth and multifactor productivity growth across 20 OECD member nations (where data is available) over the period 2000 to 2014 (Australia shown in red):

ScreenHunter_15574 Oct. 19 17.29

In both cases, there is no statistically significant relationship between population growth and productivity across OECD member nations.

Further, despite experiencing some of the highest population growth in the OECD, Australia’s productivity growth has been lackluster by comparison.  While this does not by itself suggest that Australia’s high immigration program has lowered productivity, it is nigh impossible to argue that it has raised it either.

Ultimately, the only real economic “benefit” that comes from running a high immigration program is via an improvement in Australia’s population pyramid as younger workers lower the average age profile and increase the ratio of working aged to non-working aged.  As explained by the PC:

Growth in the population can increase the size of the economy but does not, in itself, increase output or income per capita. Growth of per capita income is determined by changes in participation (referred to as ‘labour utilisation’ in figure 2.2), labour productivity, the terms of trade and in net foreign income…

ScreenHunter_15575 Oct. 19 17.40

However, any benefit to labour utilisation is only transitory: as the migrants grow old they too add to the number of retired people, thus requiring ever more immigration and an ever bigger population to keep the age profile stable (classic Ponzi Demography).

Against these transitory benefits are the costs associated with pressures on infrastructure, housing , the environment, and in Australia’s case, the dilution of its fixed mineral endowment, which is a key driver of our wealth and living standards.

In short, the broad macroeconomic data – both domestic and international – does not support the assertion that Australia needs to run a high immigration program in order to drive the economy and increase living standards. In fact, given the significant qualitative costs – for example, the degradation of the environment, the depreciation of natural resources and decline in individuals’ quality of life – there is significant cause to dial Australia’s immigration program right back.

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Comments

  1. Gen Y Home Buyer

    Gotta love data!
    FYI small typo in the paragraph “In both cases, there is no statistically significant relationship between productivity growth and productivity across OECD member nations.”

    I think you mean “population growth and productivity”

    Keep fighting the good fight!

  2. notsofastMEMBER

    Yes all true but you are looking at Australia in a microcosm and assuming that the borders that Australia has are strong enough to be sustained in the approaching global problems associated with population growing from about 7.5 Billion today to about 10 Billion by 2050 (no amount of free contraception carelessly thrown at the poor brown people of the world by benevolent hand wringing whites or even a global two child policy is going to stop this relentless march towards 10 billion people). Under pretty much all credible scenarios I can now see, where people are largely driven to migrate by income differences, quality of life differences and infrastructure differences between countries, I can only see western countries continuing to be increasingly significant destination countries for the foreseeable future.

    https://www.theguardian.com/commentisfree/2014/mar/05/the-boats-always-come-back-and-when-they-do-australia-will-have-to-draw-on-fresh-reserves-of-cruelty

    I also find this article compelling. That is to say that the way things are going in the world (think serious climatic disruption in some of the worlds most populated countries) in the future Australia will be required to absorb refugee flows in the many millions. In the future this article by David Marr will be seen as obvious and we will be forced to ask ourselves why we didn’t do more to answer some of problems including shutting down some of the now pointless inhumane policies in relation to Asylum Seekers (like offshore processing). I see in the future that many people in powerful positions within Australia will be unwilling to allow a future Australian Government to increase its levels of inhumanity to the levels required to stop the future people flow by unauthorised boats and in the future people supporting the continuation of these inhumane policies today will be seen as their own worst enemy.

    • I believe that the population ponzi through distorting domestic markets including exchange rates via non productive capital flows has reduced our ability to maintain security and sovereignty. The ability to manufacture is primary in this sphere but we have been reduced to colony status by our own greed. There is a price to be paid for this folly

      • Yep! Our ‘prosperity’ is directly linked to foreign debt and asset sales. The correlation would be very high.

    • I believe if the EU, USA, Japan et al didn’t offer so much support to their farming & other industries via all sorts of subsidies, tax breaks and other means their would be far less migration. Sure there have been other drivers the other major one would be China sucking most of the foreign direct investment funds out of places like Africa (which in turn has allowed more Chinese to become educated AND gain experience so they can migrate via tar front door). Economic mismanagement & corruption in migrants home countries don’t help of course.

      So just like the central banks have distorted financial markets with their policies so too have governments with their subsidises.


    • (no amount of free contraception carelessly thrown at the poor brown people of the world by benevolent hand wringing whites or even a global two child policy is going to stop this relentless march towards 10 billion people).

      That”s simply untrue – if Africa’s fertility dropped to 2.0 in the next twelve months, we wouldn’t see 10 billion in 2050. Indeed, the 10 billion is based on the assumption that Africa’s TFR drops from the current estimate of around 4.5 to around 3.0 in 2050 – if someone found a way to make it drop any faster at all, we also won’t see 10 billion people on the globe.

      The flipside is that if the handwringing whites were to cease their careless distribution of contraception and the result was African fertility dropped slower than UN estimates -or grew – we could see way more people on the globe.

    • On the one hand Australia has “asked for it” by getting involved in unnecessary wars. So you could argue we had a duty to Vietnamese refugees after our involvement in the war there and arguably also in Iraq. Afghanistan is less clear as we were an ally in response to 9/11, and that war had a clear international mandate in a way that Iraq didn’t.

      Nonetheless, there seems to be this pervasive idea that we owe the rest of the world citizenship because of various global turmoils. We don’t. The simple, hard fact is that having a controlled immigration program to Australia will also mean having a controlled refugee intake.

      Trump (an idiot) understandably gets a lot of flak for wanting to build walls and call Mexico racists. And Howard got a lot of flak for the “we will decide comment”- and we know that was just a cover for higher “official” immigration. But border control is no joke. When Rudd loosened the Howard border controls, the increase in boat arrivals was exponential. And we all saw the flood in numbers into Germany thanks to Merkel. Economically and socially, this represents a huge problem, not least because it creates a lobby group who think all their relatives and friends should be given the same opportunities.

      Let’s get this clear: just as there is a level of overall immigration that is good for the economy, beyond which it becomes counterproductive, so there is a level of refugee intake that is good for society, beyond which is socially divisive. II don’t know what that number would be but I’d guess 20,000 (out of an overall 100,000).

      Refugees are expensive. If you want to do refugees properly you need to give them the resources (language, training) to be able to get jobs and integrate into the economy. (We can discuss the more divisive question of “social integration” elsewhere but the fact is if you don’t integrate economically, it’s hard to integrate any other way). We also need to to the “micromanagement” of refugees better, and while it sounds harsh, the presumption should be that refugees need to prove they are genuine. And: at another risk of sounding harsh, just because you choose to fight a war and lose, that does not make you a refugee (I could list several groups here but don’t want to politicise an essentially economic concern).

      The refugee/ immigration policies in Europe over the last 20 years have been a disaster and we don’t want that to happen here (though maybe it’s happening already through legal immigration). I respect David Marr but he’s a lefty who never has to worry where the money is coming from and thinks the world is full of happy little pixies who will just all get along together.

    • Population policy is a global issue, in that you are correct.
      Australia has an opportunity to show global leadership with its own policy. Australia’s fertility rate is high by OECD standards and it is higher than Thailand and Indonesia for example. In what way is your reference to poor brown people helpful and not divisive?
      If Australia lowers its population growth, that will have a massive impact on emissions. If we allow Australia’s high consuming and high pollution population to continue to expand by ~350K pa, how is that going to provide any part of a solution?

      I cannot see that condemning poor people to a downward cycle of overpopulation and grinding poverty is a humane way to progress. Surely, providing voluntary, reversible and free access to family planing is THE humanitarian way to act. Rather then hand wringing about poor brown people, we should focus on the rich and high consuming people of any shape, size and colour, while offering an hand-up to those less able to help themselves.

      • Dear me. We have been below team lacment fertility now for the last 43 years. Our actual number of births has been decreasing over the last three years. Yep, fewer babies.
        Sorry if the facts do not suit your agenda.

      • Willy,

        Happily, the annual tally of births in Australia is in slow decline, but it is still about twice the number of annual deaths. The end result, on which I assume you are focusing in a rather confused way is that net births minus deaths, which was around 156,000 pa a few years ago, reduced to about 146,000 last year.

        Oh dear! You seem to have fallen for that old ‘replacement level’ (team lacment fertility sic) propaganda, so popular amongst immigration agents and other growthists. I’ve heard this complaint even from university professors, who should have a better grip on the maths, but seem to be blinded by dogma.

        Of course, it is well known that Australia’s fertility rate has been below 2 for many years, but its demographic profile is more like a pyramid that has swallowed a pig. The number of people in the breeding cohort between 18 and 38 years of age is much larger than the older cohort between say 68 and 88 years hence, Australia’s population would grow by about 1 million people over the next 7 years, even if net arrivals of all sorts from overseas was zero!

        Over the next 20 years, an aging cohort of baby boomers will see the number of deaths rise, so provided that fertility rates stay around 1.8 or even fall to more normal rates seen in other OECD nations, net births minus deaths will decrease and with any luck the organic rate of population change will be zero.

        To achieve a stable population under the current structure, permanent departures would need to be 150,000 pa more than permanent arrivals before Australia’s population could be stable. Sadly, permanent net overseas migration is still running at just over 180,000 pa (arrivals less departures), which is a fair way down on peak levels of over 300,000 pa.

        Outside of permanent arrivals and departures is the much higher level of ‘temporary’ arrivals, usually those on ‘student’ visas or 457 visas and the like. Sadly, this scheme is heavily gamed by vested interests Willy, as many so called student arrivals are attempting to become permanent.

  3. there is significant cause to dial Australia’s immigration program right back…….. to zero and wind down the million temp visas too. We then check to see if work is a better option for our youth than welfare which I expect is the case.

    Great post !

  4. Its gone too far to stop now. This country will continue to be sold out from under us – in the post office yesterday and person in front of me was applying for an Australian passport – they could not speak one word of English – not one, which made it impossible for the post office staff to help. Yet they had all the correct paperwork. Surely the ability to speak English is a basic criteria to secure citizenship in order to be able to contribute to society here?

  5. Yep. As I have been writing a on this site for around 18 months now: Zero immigration is the answer and that is not an attack on refugees.

    I am delighted to see MacroBusiness has increasingly agreed with me.

    It is good to see charts on the issue.

    Below is one of my comments from last year:

    naturaltrust
    September 16, 2015 at 1:59 am
    It will happen if we get rid of negative gearing. It will happen if interest rates rise by 3%. It will happen if we have a recession and there is widespread unemployment, my guestimate is 8% to 10%. It will happen if Australia’s population begins to fall.

    Reducing population is an excellent solution to high property prices. Reducing population will (1) increase productivity by allowing people to make use of excess buildings for new enterprise at a lower rent or purchase cost (2) Reduce pressure on Australia’s stressed natural environment (3) Create greater social harmony as people are less stressed about having to pay greater taxes and increased cost of living driven by property and ifrustructure prices. (4) Reduce the cost to government (and therefore taxes) by governments not having to provide more and more infrastructure for increased populations. (5) Increase funding available for education and for research and development due to cheaper property and lower taxes and easier business start up costs, Thereby allowing for new service/intellectual industry expansion flowing into increased living standards and high level exports. (6) Allow for existing or non-existent infrastructure to be upgraded since it has been ignored to a great extent while governments (and Land Tax proponents think we can trust them!) have not upgraded or initiated while they have been encouraging high immigration to provide a largely false sense of economic expansion.

    There are many more advantages to stabilising or reducing the Australian population and this is where we are better served by putting our efforts than by increasing Land Tax or most other taxes.

      • And I have not seen any mention of the changes in methodology, like the major change in 2006, which changed our population numbers and growth. How many other OECD countries inc temp via holders (longer than 12 months) into their official numbers do you think?

      • Great that we agree Leith.

        You have long been saying that immigration should be returned to historical averages.

        You would be wrong to say that is my view.

        I am glad to know that you now agree with me that the right level of immigration is zero.

        There has been no change in my position.

      • You are apparently retreating to unworkable neo-classical economic theory and practice that seeks higher GDP numbers , Leith.

        Unworkable in practice.

        Higher GDP numbers produced by average levels of immigration are essentially false. Higher GDP can be achieved by clearing land until it is dead and lifeless. At this time in Australian history any immigration essentially achieves the same result AUSTRALIA becomes increasingly figuratively dead and lifeless.

        Your call for long term average levels of immigration is a call for high home prices rents and high business property prices and rents, increased environmental degradation, increased social disruption through more crowding in residential areas, more degrading of farm and grazing lands, lower standards of living and poorer standards of health and happiness.

        That is your choice and not mine.

        Sent from my iPhone

    • I am delighted to see MacroBusiness has increasingly agreed with me.

      LOL. You’ve got that arse-about-face.

      I’ve been reading MB for 6+ years and they’ve been arguing immigration is too high – either implicitly or explicitly – the whole time.

      • As I wrote to Leith above, dr smithy:
        Great that we agree Leith.

        You have long been saying that immigration should be returned to historical averages.

        You would be wrong to say that is my view.

        I am glad to know that you now agree with me that the right level of immigration is zero.

        There has been no change in my position.

  6. ErmingtonPlumbingMEMBER

    With millions of Australians holding strong opions on and wanting to participate in this discussion, why isn’t anyone putting up the call for a Population Plebiscite ?

    Let the electorate decide the policy, if its all to hard for the Pollies to address.

    • That’s because everyone knows what the answer will be. Far better to pretend there is no problem. One makes more money that way.

    • I’ll second that!

      but, can you imagine how the Libs would frame the vote! it be like….

      Would you like to see our new immigration policy to allow:
      a. 300,000 net immigration into the country, or;
      b. 500,000 net immigration into the country?

      they’d completely obfuscate the issue at hand, as they do with many other serious issues like housing affordability and welfare (aged pension)…

  7. I feel politicians and the elites have their feeding fingers in their ears and really don’t give a toss about the negative impact that high immigration has on the majority.

    Why are we still bring in a way above average level of immigrants when unemployment and underemployment are still quite high?

    • bolstroodMEMBER

      Who is going to buy the Boomers houses in 20 years time when they (we) die? Or their shares and other assets?
      Who is going to buy all the over supplied apartments?
      Some how house prices MUST always increase, to keep the FIRE sector burning.
      Answer ; Mass Immigration.
      Too crowded? No school for the kids? trashed environment?
      Suck it up , cos the 1%ers have to keep making record annual profits.

      We have become Strangers in Our Own Land.

      Light up a pitchfork


  8. The evidence is clear: population growth and prosperity are NOT linked

    Actually, it is almost certainly the case, especially in respect of developing countries that there is a strong link between rising prosperity and reduced population growth, in the sense that rising prosperity reduces population growth.

    As has been noted here before, modern (urban) life is a contraceptive. Modernise sufficiently, and TFR almost surely falls below replacement.

      • Well yes, but more importantly, lower population growth leads to faster expansion of wealth per person.
        Thailand radically reduced its population growth rate in the 1970’s and was rewarded with a massive wealth dividend per person in the 80’s and 90’s. Meanwhile in the Philippines, which started fro more or less than same point in 1970, population growth rate only declined slowly and its wealth per person remained very low. Chicken and egg.

      • I think there’s another aspect to this too: the population ponzi is based on the idea that “we need young people to look after the old people”.

        Mind you my definiton of old people is “people who whinge about young people” (see: Bernard Salt)

        Declining population growth brings increased health per capita, part of which can go on preventative health care. Healthier old people means less draw on government resources, and rich people are healthier in general.

        There are times when I wonder if the population ponzi just isn’t flat out wrong- that an ageing bump in the population profile is a self correcting problem. The sad thing is, if we’d managed the mining boom that we just had properly, the money would be there in the bank to deal with the problem. Instead, all the mining companies got to avoid huge amounts of tax, and the tax that did get paid got pissed away on upper middle class welfare.

      • ajostu,

        There’s no shortage of whingers in any age group. The only difference is that retirees have more time on their hands to indulge.

    • St JacquesMEMBER

      Actually it’s a positive feedback loop. Rising prosperity leads to lowered fertility leads to greater investment per capita, which feeds even greater prosperity per capita, etc. The ideal long term goal should be a stable population at a level the planet’s ecosystems could handle easily, which is certainly way below the present global population, but such a goal cannot be achieved with today’s financial system…


      • The ideal long term goal should be a stable population at a level the planet’s ecosystems could handle easily, which is certainly way below the present global population, but such a goal cannot be achieved with today’s financial system


        That goal would be achieved easily if/ when the four or five largest African nations enter the positive feedback loop and get their TFR below replacement. Ethiopia seemed to be on the cusp of beginning that process until recent civil unrest, which seems to be unrelated to the financial system.

      • St JacquesMEMBER

        Totally agree Rob. China is closest to achieving that, Latin America and SE Asia are getting there and India is (too) slowly getting there. My point is about our current absurd, unstable ponzi financial system of private bank debt money. This is what is behind much of the push to flood developed countries with immigrants. We need a different system.

    • I have a book printed in the 1970s about “development in the 3rd world” and it says that PM Indira is trying to improve the per capita fortunes of Indians but the population growth is out of control and therefore any gain she makes is eroded by a rapidly increasing population.

      Yet AUS, NZ, Canada, USA, have a policy of having a rapidly increasing population via mass immigration!

      Therefore the average Briton and Aussie has become worse off!

      • adelaide_economist

        Yep.

        Indian population growth in 2015 was 1.2% (and primarily natural increase).
        Australian population growth in 2015 was 1.3% (and primarily migration – therefore a direct policy decision).

        Strong population growth has almost always been seen as an impediment in development economics, not something you deliberately induce. Makes you think.

  9. Population growth is the way to economic prosperity. If the government carefully selects who they allow to immigrate here, then everybody wins. We can see that in the food that we eat now, the more diverse cultural things, the lower costs that we pay for discretionary consumable items because our market place has more competition (e.g. Aldi, Cosco, etc). Once population growth stops, then the economy has no where to go, but down. Other OECD countries are already over populated and Australia is in a unique place with lots of space for even more well selected immigrants.


    • Other OECD countries are already over populated and Australia is in a unique place with lots of space for even more well selected immigrants.

      Other OECD countries either have declining populations (or are on the cusp of having declining populations) or are making a deliberate choice to pursue population growth via immigration. We’re not going to see OECD countries sending us migrants to relieve over crowding.

  10. And this from The Conversation, with my response.
    https://theconversation.com/western-australias-economic-future-remains-uncertain-after-the-mining-boom-study-67229

    o what was the purpose of the mining investment boom? Are we better off? Have real wages risen and is there more job opportunity in WA now than there was 10 or 15 years ago? Have living costs fallen? Has Perth become a better and more gracious place to live with a lower crime rate and more recreational opportunities. Do we live in a more equal society where opportunities for the lowest paid have improved?

    I think that the answers to these questions are almost universally no.

    The Dutch Disease experienced in WA saw population expand by 500,000 over the past 10 years and it has risen by 800,000 over the past 20 years. Providing the new schools, hospitals, police stations, stadiums, roads, rail, and utilities to service this rapid population expansion has effectively put the State into a massive deficit position, while housing pushes out into the surrounding precious bushland, destroying public amenity and habitat for native birds and other animals.

    Real wages have fallen and total unemployment is high. Housing costs have risen massively and even after the recent falls in rents and house prices, are still worse as a percentage of average income than they were prior to the unfortunate boom.

    Congestion on our roads and public transport lengthens commute times, reducing the time people can spend on recreation and with family, not to mention the lost productivity that also results. Yet the GDP loves congestion because it delivers a rise in the consumption of fuel and more wear and tear on vehicles as well as overtime for delivery drivers!

    Schools are full to overflowing with students in abundant portable classrooms while large class sizes reduce quality of education, and newly built hospitals are crammed to break point in a matter of months after opening as population growth overwhelms the best laid plans of city planners.

    And yes, the rich have become richer. Anyone with multiple houses has done well, though rising accommodation costs makes the whole community poorer on average. Those with savings have also prospered as global money printing schemes inflate the prices of equities, lifting the wealth of those with investments.

    Isn’t is time that we took a breath and actually tried to figure out what it is that we are trying to achieve here? How do we leave a better WA for future generations? Is that by digging up its finite, non-renewable mineral resources as quickly as we can and selling them cheaply to people who transform them into the consumer goods that we then import? Is it by continuing to expand Perth’s population in a completely uncontrolled way, with no limit and thus destroying its pleasant atmosphere, or should we be thinking about the optimum population level and ensuring that there are jobs for folks before they are invited to immigrate here from interstate or overseas?

    I’d be voting for better and not bigger WA with a focus on quality and not quantity.

    • Peter You are confusing a variety of issues. Our ‘Dutch’ disease has not been caused by digging up and exporting. It has been caused by just selling the businesses and the mines. Stop the insanity of the capital flows and the ‘digging up’ slows down automatically in a major way. We would have to save to invest – a much slower process.
      Second everyone ignores the HUUUGE impact on our living standards if we had not dug up the dirt (and we had not just borrowed a whole lot more than we have – over the 10 years probably in the vicinity of another trillion – if we could borrow -which, without the current policies on selling off assets at the fastest pace we can, would be impossible.
      So stop the damaging capital flows; get the dollar to a realistic level; stop the privileged and powerful getting compensated for any decline in the value of the A$; smash the banks’ stranglehold on the neck of the economy; raise interest rates so that we save and invest in our own country; and everything will automatically fix itself over a period of three or four generations.

      • An infection of Dutch Disease is caused by a rapid pulse of capital spending that is large with respect to the economy it infects (affects). This capital pulse increases demand for basic factor inputs such as labour and other capital goods and thus lifts prices for these scarce resources, flowing on to the services that support them such as accommodation, healthcare, education and hospitality services. In a gold boom, the price of shovels rises.

        Higher wages attract more people and the impact flows through the economy so that coffee price rises from $3.50 to $4.50 while the cups get smaller! Only those highly paid (usually imports) directly involved in administering and delivering the capital spending see any net benifit from the disease. Other with less bargaining power over wages see their living costs rising while wages don’t rise to match their disadvantage. Worse, those who engage in acquiring property during the bubble or who sell and repurchase can be left with negative equity or a paper loss on a property when the bubble bursts, as is now happening in Perth and Darwin.

        The sensible solution would be to stage and monitor investment in a way that does not require additional imported skills so that it does not inflate costs.

        WA has tried to expand government services to meet the bubble, but its revenue has not risen as fast as the need for spending, thus the state finds itself deeply in debt.

      • Peter
        Yes I agree with all that. However again despite all the digging up of dirt we have run CAD’s through the whole period. We have never produced enough to finance our consumption. We need mining and all the other industries to boot. The pricing of the resource is pretty obviously and issue.
        My opinion is that if you get control of the capital account then the rest will, to an extent anyway, balance itself. I do say ‘to an extent’ because the distortions have been running for 60 years and (again my opinion), are irreversible.

    • Perth is dog eat dog city… its become a horrible place to live. there are no jobs, beers (still!) cost $11 a jar, and you cannot get a decent meal at a restaurant for under $50 unless you go down a dark alley and pay in cash…

    • Now if we could just link them with better trains we’d be getting somewhere..

      What for? How does expanding Sydney help this nation? How does expanding Melbourne help the nation? How does creating an environment where people can get to more shops and coffee shops faster help? It just creates more debt.

      • Kipron does not understand these issues, Flawse. To him a bigger population is good because it will unleash a wave of prosperity though expanded services industries that earn us no export income (while the extra people accumulate more foreign debt). It’s tail wagging the dog stuff.

      • Thanks UE I keep wondering how anyone who reads here can miss that part of all this.

        Great effort on all this stuff!

    • Sustainable Australia would be a better choice if only more people knew about them. They’re articulate for a start and have policies that make sense, unlike some of Pauline and her senate friends’ nonsense. But at least she isn’t part of the Lib/Lab/Green Big Australia committee.

      • yes I know about SA party, have followed them for a while….I just think that Pauline has the traction and profile to make a difference – her recent results speak for themselves. I reckon we need to push hard for a Plebiscite on Population as someone suggested above!!
        #PlebisciteOnPopulation2016

  11. I am afraid that given the way things go the problem of overpopulation will be solved by some pandemic. The outbreak of Ebola in West Africa in 2014 claimed 11000 lives out of 27000 cases of infection. In addition to viruses we are facing antibiotic resistant bacteria strains in Western countries. The larger the number of people who move around the higher the likelihood of viral and bacterial mutations and infections.

  12. The OECD might cautiously agree

    “One study that looks at the impact of migration on economic growth for 22 OECD countries between 1986 and 2006 demonstrates a positive but fairly small impact of the human capital brought by migrants on economic growth. The contribution of immigrants to human capital accumulation tends to counteract the mechanical dilution effect (i.e. the impact of population increase on capital per worker), but the net effect is fairly small, including in countries which have highly selective migration policies. An increase of 50% in net migration of the foreign-born generates less than one tenth of a percentage-point variation in productivity growth (Boubtane and Dumont, 2013).”

      • St JacquesMEMBER

        So we’ve got an oversupply of doctors, accountants and lawyers which does nothing for our miserable export situation, while countries like India are drained of such people that they need desperately. And our IT exports are a pip-squeak relative to our nation’s size, while many of our most talented young people are leaving in droves, the ones with the ideas Panama loves to gas bag about. Nothing to see here. Move along.

  13. Over population will be solved by voluntary euthanasia. Checkout halfwit Denton’s crusade. Millennial’s and following generations will be programmed to top themselves when things get too hard. After all ‘no one wants to burden society’. The idea is being sold under the guise of repeated of stories ‘dying without dignity’
    If I had no soul I’d seek out shares in companies that manufacture efficient DIY death drugs. That’s my tip for future earnings over real estate. Harsh but true.

  14. As long as house prices keep rising most people appear to ignore the obvious….. the decline in living standards. They are temporarily compensated by the “wealth effect”. Society is breaking down slowly, year by year. Melbourne has been deteriorating for many years but we are constantly reminded that we live in the world’s most liveable city (true, for an expat on living allowances). We are becoming a first choice destination for immigrants from overpopulated nations who want first class access to our Centrelink. What a fabulous future we have created for generations to follow. Bloody disgrace.

    • Spoken by someone who has never tried to live on Centrelink – which is so paltry it is a bloody disgrace alright. To give you an idea of the relativities – I was on Workcover for a year, then the pension – and now I have a job, my income taxes alone would pay for three people on benefits. that is how great the income disparity is.

      I think your bigoted comments are a disgrace because they show no apppreciation of reality. Which is that the vast majority of immigrants work far harder than the complacent sitting population, and generally end up much richer.

      • Big country but they all want to crowd the cities. I have no problem with them coming but stay away from the city. As you point out- we are vast- a vast bloody desert. We don’t need them here. Great data out on Friday- losing full time jobs but replacing with part-time. Not looking good! Can’t just keep bringing in more people so we can keep building houses. Very lazy and very stupid. We are populating at the 9th fastest in the world amongst a bunch of 3rd world developing nations. Why? Because we are desperate for economic stimulation. The penny has dropped and people are realising that living standards are dropping.

  15. The construction of CRA House (“95 Collins St”) back in the early 60’s was the bellwether that heralded the beginning of the end for the gracious city that once was Melbourne.

  16. Leith on most thisngs I agree with you but on this ‘population ponzi’ I don’t. Autralia has a pitifully low population in comparisoin with its size, and needs to expand or one day it will be done for us. We are actually getting our new population on the cheap, on the very cheap – compared with say internal growth where children require massive investment ($1m each?) in order to become productive members of society.

    The truth is we have become a rather unpleasant opportunistic nation across the board, sucking our neighbours dry of their talent and capital. We are very far from ‘give me your tired, your poor, your huddled masses” the usual rubric for a brave new world, and one on which we also were founded.

    The comparative graph on population growth vs GDP growth – needs more thought but it is fairly clear that in the short term the withdrawal of resources to support new population should require a proportion of per-capita growth. Like much capital investment the payoff shoudl be fairly slow and lagged, – and more visible as ‘size of firm’ rather than ‘growth of firm’. As in business there is also the an accounting problem – when one invests in hard capital it goes onto the capital account, when one invests in human capital it does not and appears as a temporary fall in output as the new workers are trained. The same happens at the national level.

      • Perhaps – after all they are starting with less – but one tends to extrapolate from the large number of successful immigrants one meets. I sat on the plane yesterday next to a Chilean guy who arrived in Australia 20 yeards ago with nothing but a suitcase, has had three businesses and a regular job and now has four houses. One of dozens of similar cases I have met. Dont forget – one successful immigrant can pay the benefits of three that dont do so well (see my post below)

        Also – the article you refer to is only short term outcomes. Sure, I have also met dozens of immigrants that cant find work in their area of qualification, but – knuckling down and hard work eventually pays off, I like to think Australia remains the land of opportunity.