Ken Henry warns on unplanned population growth

By Leith van Onselen

In July last year, Ken Henry raised the alarm on Australia’s excessively high population (immigration) growth, noting that “our population is growing at a rate that exceeds the capacity of traditional models of planning, building and pricing access to the nation’s infrastructure and housing”.

Then in December, Dr Henry returned to warn us that Australia’s break-neck population growth will crush living standards unless Australia’s governments embark on a massive infrastructure building program:

With Australia’s population expected to grow by 400,000 people every year, Dr Henry also said Canberra lacked the sense of urgency required to ensure sufficient new infrastructure is built to maintain the quality of life for the existing population.

“My observation in Sydney, in Melbourne, today is that people already think – with very good reason – that the ratio of population to infrastructure is too high,” he said.

Australia will need to construct a new city every year as big as Canberra or Newcastle to accommodate the expanding number of people, he said. Or, every 5 years,

Australia would need to build an entire new city from scratch for 2 million people; or an entire new city as big as Melbourne every decade.

Without such action, there will be more congestion, longer commute times to work and increasing problems with housing affordability…

Today, Dr Henry has returned with another warning about excessive population growth, again calling for better infrastructure investment and planning. From The AFR:

“Australia’s business leaders have to accept responsibility for ensuring that strong population growth, and the investment opportunities that go with it, lift economic and social opportunity for all, without damaging the quality of the environment we pass to future generations. That means that we have to take an interest in traffic congestion, housing affordability, urban amenity and environmental amenity, including climate change mitigation and adaptation”…

“If we want modern and efficient infrastructure, then we are going to have to take an interest in the design of our cities, we are going to have to take an interest in regional development, and we are going to have to take an interest in the planning of new urban centres”…

Absolutely spot on. The Intergenerational Report projected that Australia’s population would grow by around 400,000 people per year, mostly via immigration, for the next 35 years:

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Where is the national plan to cope with this growth? How will Australia’s governments and businesses ensure that incumbent Australians’ living standards will not be eroded by the associated pressures on infrastructure, housing, the environment, and the dilution of Australia’s fixed mineral endowment, which is a key driver of our wealth and living standards?

That said, while Dr Henry has clearly identified the problems, his solutions should also include reducing immigration to sustainable levels to ameliorate all of the pressures that he identifies above. It’s not just about managing infrastructure/housing supply. Demand matters too.

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Leith van Onselen

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