Salt of the Ponzi collapses into confusion

By Leith van Onselen

KPMG’s Bernard Salt – the self-proclaimed “unabashed supporter of a bigger Australia” – has penned another piece in The Australian spruiking mass immigration and claiming that the march toward ‘mega-cities’ will drive the nation’s productivity:

There will be more growth in ­Australia’s biggest cities over the next 30 years than in the biggest cities of the developed world.

In fact it is hard to identify any developed-world city that is projected to record a higher percentage increase in population than Perth, Brisbane, Melbourne and Sydney by mid-century.

The reason of course is the controversial policy of Big Australia, which lifted net overseas migration from around 100,000 per year to 180,000 per year. That transformation took place about a decade ago and, despite a few ups and downs, has remained in place ever since.

With more people coming into Australia, our biggest cities are tracking higher rates of growth…

Sydney and Melbourne are ­officially expected to accommodate another three million residents by the mid-2050s; southeast Queensland and Perth are ex­pected to add another two million each. These numbers translate into net growth of between 56 per cent for Sydney and 127 per cent for Perth over this period…

The single most important issue in city planning and visioning in Australia is addressing the logic of why our cities need to grow so far and so fast…

The reasoning behind Aust­ralia’s elevated levels of migration are varied. It is partially driven by the ageing of the baby boomers exiting the workforce, creating a labour vacuum that must be filled by younger workers…

It is also partially a risk-mitigation strategy, a demonstration of good faith, by the Australian people that we are prepared to share the bounty of this land with all races and creeds for generations…

And there is the logic that some level of population growth supports economic prosperity.

In June last year, Bernard Salt published population forecasts, which projected that the populations of Sydney and Melbourne could climb to 11 million by the end of the century:

ScreenHunter_13778 Jun. 30 09.25

Anyone living in the big cities should find these population projections truly horrifying. Sydney and Melbourne are already straining under 12 years of rampant population growth (immigration) and are ceasing to function properly. So, imagine how badly they would operate in the event that they roughly tripled in size. They would become a nightmare to live in.

Bernard Salt’s reasons why Australia should pursue a ‘Big Australia’ mass immigration program are also laughable.

Salt’s claim that “the ageing of the baby boomers” will create “a labour vacuum that must be filled by younger workers” is wrong on several counts.

Back in 2015, Salt warned that technological change will mean there are likely to be too few jobs to go around in the future:

What if by 2030 we don’t need 12 million workers; we needed only nine million? In such a world work retreats to knowledge enclaves such as Silicon Valley or to the privileged infrastructure-rich centres of Australia’s biggest cities.

How do we organise a society in which not everyone works yet where the number in the prime of their lives continues to expand?..

The question here and in the US will be the political ramifications from the development of a society where work and work-based remuneration may well be a scarce resource amid an expanding working-age population.

And last year, Salt estimated that up to half of Australian jobs could be at risk from digitisation, and again warned that technological change could mean there will too few jobs to go around.

Given that Salt believes that there could be too few jobs to go around in the future, why does he support mass immigration on spurious labour shortage grounds?

In any event, the Productivity Commission (PC) has comprehensively debunked the claim that immigration is required to prevent the population from ageing. Here’s a selection of quotes from the PC over the past decade:

  • 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”.

In short, trying to overcome an ageing population through higher immigration is a Ponzi scheme.  It requires ever more immigration, with the associated negative impacts on economic and social infrastructure, congestion, housing affordability, and the environment.

Salt’s claim that Australia must continue pursue a ‘Big Australia’ as “a demonstration of good faith” is a weak argument. Why does Australia’s immigration intake need to be so much greater than historical norms and so far above other nations?

Australia's immigration

And what about the interests of incumbent residents? Isn’t it the government’s number one job to look after them first and foremost?

This brings me to Salt’s final reason for mass immigration: that it “supports economic prosperity”. This is curious, because the PC’s own modelling has found that existing workers are made worse-off via immigration. Why? Because they experience lower wages growth than would otherwise be the case, in addition to suffering from greater traffic congestion, smaller and more expensive housing, as well as reduced overall amenity.

Salt conveniently left out the most enduring reason for mass immigration: that it supports his big business pay masters and allows them to generate lazy profits via an ever-growing base of consumers and debt. Immigration is a way to privatise the benefits from growth to the elite few while the costs are borne by everyone else.

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Unconventional Economist


  1. “It is also partially a risk-mitigation strategy, a demonstration of good faith, by the Australian people that we are prepared to share the bounty of this land with all races and creeds for generations…”

    So instead of bothering to defend ourselves we surrender our identity.

    • This is the harsh truth which some countries understand and we don’t seem to.

      In the broadest sense, we don’t owe the rest of the world anything.

      This idea that we need to accept huge numbers of people because otherwise other people will get pissed off is just ridiculous.

    • What you consider to be “our identity” is transitory. It was different in 1850, 1900, 1950, 2000 and you can bet your bottom dollar it will be different in 2050. So we are not surrendering our identity, it is just changing, like it always has.

    • In a sense you are right CEE…but it’s evolved from a common and shared base. Mass third world immigration has circuited that evolution to the point where identifying with its cultural relics is racist or non inclusionary etc.
      Another important note….the core reason migration to Australia occurs is because the western identity is one that draws “in” whilst the identity in other areas “repels”. Ask any Somali, Indian or mainland Mandarin speaker. When that alters and gets institutionalised- well then why come when it’s the same as where you are? What’s the NOM into Singapore or UAE?
      PS: I do appreciate the “draw in” incentive is through govt, the lowy’s, triguboffs, BCA and property lobby.

      • (Without bothering to check any facts), both Singapore and UAE have significant immigration, they just don’t have such a welcoming process around it, maybe that’s your point. Like Japan, too.

      • SIngapore NOM seems to be 80-100k per annum, obviously into a much lower starting population i.e. immigrants per 1000 head of population is about 80% higher than the equivalent measure for Australia.

    • adelaide_economist

      Yes and the problem with this magnanimous act by the Salts of this world is that he and his family aren’t suffering because of course they already have plenty of assets. Just like many of the wealthy neoliberals are happy to point to ‘raising masses out of poverty’ but it also just happens to coincide with them making out like bandits too. Why do I not believe they would be so keen on one worldism if they weren’t benefitting so grotesquely from it?

      If the goal really is to share our bounty, we’d be far more effective in upping the development aid budget by a large amount. I’m sure it would be better for humanity to give hundreds of millions basic education, medical care and clean water rather than spending the equivalent bringing a fraction of that number to Australia to help drive down wages and drive up asset prices for pre-existing owners of them.

      It would also (being fair and sharing the bounty of course) make sense to pay for this with taxes on windfall gains of property and financial asset owners. Not to mention supporting removal of restrictions on development in their leafy inner city suburbs. After all, they have done exactly nothing to earn it other than owning it prior to the migration flood.

  2. Bernard Salt exists to draw attention to Bernard Salt and his employer KPMG. Nothing he says is meant to be taken to be taken seriously. Everything he says should be taken with – dare I say it? – a grain of salt.

      • adelaide_economist

        But he does it so well. The smashed avo thing went on for ages. The discussion became a focus on Gen Y and their dining habits and lots of energy was spent defending them against his ridiculous diversion to what end? Meanwhile, an entire swathe of the Australian population continue to be locked out of housing due to policies deliberately tilted against them and nothing is being done to fix it.

      • And in doing so he shows up how much the political acumen of the LNP has declined since JWH got booted out.


        ‘lots of energy was spent defending them against his ridiculous
        diversion to what end?’

        Presumably juicing the Australian’s readership figures to enable it to continue its spurious claim to ‘relevance’.

  3. Given the massive unemployment that will happen in the future as a result of digital disruption, Australia is much better off having less people not more.

    One of the great things about this country is that it has never been overcrowded (as least until now) – if people want density than go an live in india, china, japan or brazil.

    We’ve got more natural resources per head of population than any other country in the world – why do we want to dilute this?

      • There are two types of people – those who have a basic or better understanding of arithmetic and able to apply it to real world situations, and the others for whom endless explanations of the numbers won’t ever sink in. Actually three – forget the rent seekers who know but are making lots of money.

  4. “The reasoning behind Aust­ralia’s elevated levels of migration are varied”

    Because no reason is strong enough to stand on its own, chuck a whole bunch of random things together in case people start producing counter arguments.

    • Salt is correct of course
      The reasons for Australia’s elevated migration levels are varied
      They vary from KPMG to NAB from REIA to HIA from PCA to CBA from REA etc

  5. “Salt conveniently left out the most enduring reason for mass immigration: that it supports his big business pay masters and allows them to generate lazy profits ” Marx said economic ideology was rooted in the ruling classes’ interests.

  6. Logic. He used the word “logic” twice. Lol.

    He’s not stupid, just corrupt. In an ideal world he’d be taken out into the public square and flogged with a whip for publishing crap like this. Sharing our bounty with all races and creeds, FFS. I’d like my three children to get a bit of a share of the bounty, ahead of 7 billion or so foreigners.

  7. This confirms the best way to make money in Australia is to be a property developer and become sexy.

  8. “Given that Salt believes that there could be too few jobs to go around in the future, why does he support mass immigration on spurious labour shortage grounds?”

    Because somebody has to pick his avocado’s

    • It seems very unwise to assume that Salt believes everything he writes. Maybe he believes some of it (by pure coincidence), but he’s too smart to believe all of it.

  9. Hey Leith, here’s a little meat for you:

    This paper establishes that, contrary to a range of theories including recent ones on demographicsbased
    secular stagnation, there is no negative relationship between between population aging and
    slower growth of GDP per capita. This is a major puzzle for several theories that have become
    very popular over the last several years.

    Anyone who uses the excuse of economic calamity, due to an aging population, as justification for ramping up immigration is simply wrong. You know, empirical evidence and all that.

    The paper concludes that the most likely reason for this “economic calamity” not actually existing is likely to be, drumroll, automation.

    Given the debt situation in this country, importing loads of people is simply importing a higher unemployment rate in the future as automation and deleveraging eat jobs.

    I’ve recently gotten into machine learning and have been assembling my first neural networks to perform a bunch of scientific analysis tasks. It’s no joke, way more jobs are under threat than people appreciate…

  10. We can only hope that those who read The Australian take no notice of Salt. Has he given any consideration to the fact that, apart from anything else, we are one of the driest countries on earth? Has he forgotten that a few years ago people were using buckets in the shower to reuse the water amidst constant reminders about water’s scarcity, but now that our population is so much bigger and set to grow so much bigger again, there is plenty of water for everybody. What happens if there’s a drought, or isn’t that going to ever happen again?

  11. Article says ” It is partially driven by the ageing of the baby boomers exiting the workforce, creating a labour vacuum that must be filled by younger workers…” However many boomers (And now GEN X) are getting pushed out a very long time before official retirement often for spurious reasons. Hence the vacuum that NEEDS to be filled with an immigrant. So now the company doing the firing is benefiting (in their accountants mind) by getting a cheaper and younger immigrant.
    Conversly the poor sap who had been made redundant is shunned by all similar companies who are either offshoring or taking immigrants only (iT jobs in particular, mine, my wifes) Have a deficit of 10-15+ years to make up before official retirement. So now the super fund is not looking too good and as it stands many of us are on track to become one of Mr Hockey’s leaners and take the new-start dole option several years before the state pension dole turns up.
    In other words these companies demanding more immigration are in fact becoming like our property ‘investors’, just a burden on society and a goverment/s thats fully in tune with that.