How do you plan for population growth that isn’t forecast?

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Some more on yesterday’s Auditor General Report attacking Melbourne’s population ponzi failure, via The Australian:

Experts warn that repeated failures by planners to predict Melbourne’s massive population growth risks causing shortages of maternity and childcare services in the city’s outer suburbs.

Research by the Urban Development Institute of Australia as well as Australia’s largest property advisory firm, Charter Kramer Keck, has found that figures compiled for the state government’s “Victoria in Future” report­s have been repeatedly underestimated when compared with actual Australian ­Bureau of Statistics figures.

Victoria’s Auditor-General called on the Andrews government yesterday to review its planning and forecasting procedures in light of the research findings.

In defense of Victoria, it is the feds that set the immigration targets which have driven most of the overshoot:

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Moreover, what kind of economic idiot would have planned for federal authorities to ramp up immigration directly into the labour market bust accompanying the mining boom adjustment? If you were remotely logical you would have scoffed at such. Yet that’s what we got because the feds are completely pre-occupied with supporting the housing bubble at all costs.

Having said that, one does wonder if some political calculus does not transpire at the state level, deliberately lowering population growth forecasts so as not to be blamed for unpopular high growth.

Either way, it all goes directly to the argument put by immigration boosters such Peter Martin, Rob Burgess and Saul Eslake that the falling standards of living resulting from the failure to plan properly for population growth is the key problem. How can it be planned for when there is no national population policy, no rationale for it beyond short-term politics and no co-ordination between state and federal authorities? This is a kind of population version of the endlessly frustrating vertical fiscal imbalance that dogs large swathes of the public sectors in Australia as it hands responsibility for certain public services to states but not the corresponding revenue mechanisms to fund them, driving immense inefficiency.

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Honestly, you could probably not find a national governance structure more intrinsically unable to cope with swift population growth than our own.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.