Dick Smith owns population bully boy Stan Grant

By Leith van Onselen

On Episode 4 of ABC’s The Link, presenter, Stan Grant, interviewed Dick Smith and a group of workers at a Sydney market to talk population growth.

Grant demonstrated that he is clearly a ‘Big Australia’ mass immigration advocate, believing that Australia must run one of the world’s biggest immigration Ponzi schemes in order for the economy to grow. But in the process, he showed that he doesn’t have a clue about economics, nor does he believe in limits to growth.

Some of the exchanges between Grant and Dick Smith, in particular, are worth highlighting and analysing:

Stan Grant: “Do you worry that we are losing these things – what it is that makes Australia the country that it is”?

Dick Smith: “Absolutely, we are going to destroy Australia as we know it today, if we are not careful…

Stan Grant: [Interupts] “That’s a big claim – destroy”?

Dick Smith: “Destroy it completely because one of the beaut things about this country is small population… There’s a thing called a stocking capacity. We now have about 24 million. The plan at the moment is to go to 100 million at the end of this century. That will mean there will be a helleauva lot of very poor people like America”.

Stan Grant: “Yeah but, you know, I’ve lived in Chinese cities where there are more than 20 million people. And they seem to be able to do it and they are now emerging as the biggest economy in the world”?

Dick Smith: “I travelled from the South to the North of China in a train and there wasn’t more than 2 kilometres of visibility the whole way. If you want to have over a billion people to our standard of living, you’ve got incredible problems because the fuel that we need to keep warm in winter and keep cool in summer is staggering and that’s going to be the problem of big populations”.

Stan Grant: “Are you trying to hold back the tide, Dick? We live in a globalised world where there is the movement of people unseen in human history”?

Dick Smith: “Never before has there been 7 billion people on this earth. We are in plague proportions… Japan and Germany… they are getting their populations in control… Australia has got the highest growth rate of any developed country in the world”.

Stan Grant: “But these countries have bigger populations than we do. Don’t we need the people”?

Dick Smith: “Our GDP per head [growth] is going down. We are going to end up like the United States…”

Stan Grant: “Whose gonna to buy the Dick Head matches, whose gonna buy the Dick Smith peanut butter and, you know, the Dick Smith vegemite”?.

Dick Smith: “These countries [Japan and Germany] have shown that you can live in balance. If you are telling me that the only way that you can have an economic system is with perpetual growth, then we are doomed. Because that ends up with a trillion people in Sydney, and that’s impossible. We’ve already got people living in highrise like termites. What about the free-range kid with the backyard and the cubby house?”…

Stan Grant: “Can you grow an economy if you limit the number of people. Whose gonna buy products?”…

“The economy grows when you have more people. More people, more customers, more opportunities for people. If we limit the population, aren’t we limiting our potential”?… “How do you grow an economy if you have fewer people”?…

Dick Smith: “I’m never talking about fewer people, I am just saying that you get to a sweet point and you can’t have endless growth in a finite world, Stan. You seem to not understand. All I am saying is let’s live in balance when we get to the sweet point”.

Stan Grant: “We know historically that our country has grown and we have become more richer when we have had more people”…. “Some economists are saying he’s mad. He’s mad because you need more people to grow the economy… Dick’s saying we should have 26 million people here at a time when a lot of respected economists – people who know this – say we should have around 50 million or more”…

It’s curious how Stan Grant keeps saying how the economy needs people to grow, while completely ignoring the fact that individual’s share of GDP growth has fallen through the floor since Australia’s immigration intake was increased massively in the early-2000s.

Here’s exhibit A: the big increase in Australia’s net overseas migration (NOM):

And here’s exhibit B: the trend decline in Australia’s GDP per capita growth:

Blind Freddy – but clearly not Stan Gran – can see that Australia’s economic growth is being driven primarily by mass immigration, but that everyone’s share of the growing economic pie is being reduced. How is this a good news story and an argument for ongoing mass immigration?

Stan Grant also completely ignores the costs of rapid growth, which are not captured in the “economic growth” statistics. You know, basic ‘lived experience’ stuff like spending longer stuck in traffic, being unable to board a train or find a seat, not being able to afford a decent home within a reasonable commute, or putting up with more pollution. All of these things are made worse by mass immigration, which is overwhelming our big cities’ infrastructure and housing.

Stan Grant would also do well to read what the “respected economists” at the Productivity Commission (PC) have said about immigration.

First, the PC has explicitly stated that immigration cannot stop the population from ageing, since the migrants themselves grow old:

• PC (2005): “Despite popular thinking to the contrary, immigration policy is also not a feasible countermeasure [to an ageing population]. It affects population numbers more than the age structure”.
• PC (2010): “Realistic changes in migration levels also make little difference to the age structure of the population in the future, with any effect being temporary“…
• PC (2011): “…substantial increases in the level of net overseas migration would have only modest effects on population ageing and the impacts would be temporary, since immigrants themselves age… It follows that, rather than seeking to mitigate the ageing of the population, policy should seek to influence the potential economic and other impacts”…
• PC (2016): “[Immigration] delays rather than eliminates population ageing. In the long term, underlying trends in life expectancy mean that permanent immigrants (as they age) will themselves add to the proportion of the population aged 65 and over”.

The PC’s Migrant Intake into Australia report also showed that the immigrants overall have experienced lower median income, lower labour force participation, and higher unemployment than the Australian born population:

The same PC report also showed that immigration lowers labour productivity and the wages of incumbent workers, as well as places increased strain on housing, infrastructure and the environment:

High rates of immigration put upward pressure on land and housing prices in Australia’s largest cities…

Urban population growth puts pressure on many environment-related resources and services, such as clean water, air and waste disposal… These higher costs are shared by all utility users…

Immigration, as a major source of population growth in Australia, contributes to congestion in the major cities… governments have not demonstrated a high degree of competence in infrastructure planning and investment. Funding will inevitably be borne by the Australian community either through user-pays fees or general taxation.

Other modelling from the PC also found that the benefits from increasing skilled migration accrue to the migrants themselves and capital owners, whereas existing resident workers are made worse-off. Here’s the money quote:

The increase in labour supply causes the labour / capita ratio to rise and the terms of trade to fall. This generates a negative deviation in the average real wage. By 2025 the deviation in the real wage is –1.7 per cent…

Broadly, incumbent workers lose from the policy, while incumbent capital owners gain. At a 5 per cent discount rate, the net present value of per capita incumbent wage income losses over the period 2005 – 2025 is $1,775. The net present value of per capita incumbent capital income gains is $1,953 per capita…

Owners of capital in the sectors experiencing the largest output gains will, in general, experience the largest gains in capital income. Also, the distribution of capital income is quite concentrated: the capital owned by the wealthiest 10 per cent of the Australian population represents approximately 45 per cent of all household net wealth…

Stan Grant should also consult the economists at MIT, which recently found that there is absolutely no relationship between population aging and economic decline. To the contrary, population aging seems to have been associated with improvements in GDP per capita, thanks to increased automation:

If anything, countries experiencing more rapid aging have grown more in recent decades… we show that since the early 1990s or 2000s, the periods commonly viewed as the beginning of the adverse effects of aging in much of the advanced world, there is no negative association between aging and lower GDP per capita… on the contrary, the relationship is significantly positive in many specifications.

Basically, Stan Grant needs to learn some economics and recognise that living standards are measured in per capita terms, as well as via qualitative measures that are not captured in the national economic accounts, such as congestion, housing affordability, environmental quality, etc. And continuing with a mass immigration program is a guaranteed recipe to make these measures worse and lower incumbent residents’ living standards.

Moreover, pursuing high immigration is a growth fig leaf for governments and associated rent-seekers to pretend they’re doing the job rather than pursuing the more difficult but ultimately much wider benefits of productivity directed reform. Stan Grant has unknowingly played straight into the growth lobby’s hands.

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