Dick Smith on the population ponzi

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By Leith van Onselen

Last night I re-watched prominent Australian entrepreneur, Dick Smith’s, speech (above) to the National Press Club in August 2014, which is more relevant than ever given the growing backlash over Australia’s world-beating immigration program.

In the speech, Dick Smith argues that Australia’s rampant immigration program is eroding Australia’s standard of living by diluting Australia’s resources base, adding to congestion pressures, reducing housing affordability, amongst other things:

“The cake is a certain size, mainly coming from our mineral reserves and our primary production from farming, and double the population, I believe everyone’s worth half as much”.

Smith also argues that endless population growth and immigration only benefits the capitalists – which get to enjoy an endless growth in their customer base – but leaves individual Australian’s living standards worse-off.

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He also slams Australia’s politicians, economists and media for ignoring the population issue, claiming that he has received minimal coverage from the press despite numerous requests, including to the ABC:

“It’s almost like a religious faith that growth, don’t even discuss it, it will just go on forever when it obviously can’t and I’m absolutely surprised at that”.

Smith blames Australia’s economic system – which requires endless growth in consumption and energy – for its growth fetish, and argues that it is “clearly not sustainable”. He calls for a new economic model based on improving living standards, and urges economists and government to pursue it:

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“Don’t worry Australians, I’m not going to stop growth, but we all know we can’t have it forever so let’s get the best experts to tell us how we move to a slightly different system that’s sustainable.”

He admits, however, that the main political parties are unfortunately unlikely to discuss it:

“The Prime Minister wouldn’t be game to discuss it, because if he doubted growth for one instant he’d be attacked by anyone… I would suggest to him that he says, look, we all know we can’t have perpetual growth in the years of resources and energy.

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Regular readers will know that we wholeheartedly share Smith’s views on population growth.

While expanding Australia’s population by more than 1 million people every three years is great for Australia’s business elites – who enjoy the fruits of an expanded market – it imposes real costs on the rest of us, who must endure increased costs of congestion, higher infrastructure costs, smaller and more expensive housing, lower environmental amenity, and minimal (if any) uplift in material economic well-being.

The politicians love endless population growth because it juices headline GDP growth (but not per capita growth), marginally delays (but cannot eliminate) the impact of an aging population, and appeases big business.

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We should not forget that Australia is ruled by duopolies and oligopolies, which see a rising population as an easy way of selling more goods and services. Big business also receives, through immigration, access to lower cost workers. And there’s less need to become more efficient when your customer base is growing inexorably. Rather, just sit back and watch the profits flow.

Take, for example, Australia’s banks and developers, who get the double bonus of not just having more consumers to sell to, but also extra demand for housing, which helps to support house values in concert with the urban consolidation policies operated by Australia’s governments.

However, while the big end of town is the clear winner from rapid population growth, it doesn’t wear many of the costs. That is borne by you and I.

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It’s a brilliant speech from a true Australian patriot. One wonders whether Dick Smith would have received greater coverage if he had given it today? Hopefully he is not too busy or jaded to re-enter the fold and use his profile to lead the assault against Australia’s unsustainable population growth and a ‘Big Australia’.

Check-out Dick’s population website here.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.