Peter McDonald vs Peter McDonald on mass immigration

By Leith van Onselen

Vocal mass immigration supporter, Professor Peter McDonald, gave a presentation earlier this week at Melbourne University on immigration/population policy, whereby he argued that a net immigration intake of around 200,000 people a year is required to offset an ageing population and maximise per capita GDP. Below are the key charts that McDonald displayed to support his conclusion, which is based on modelling he conducted with Jeremy Temple for the Department of Immigration and Citizenship in 2010:

As you can see above, Peter McDonald claims that Australia’s GDP per capita would be 12% higher in 2053 under current mass immigration settings versus zero net overseas migration, which is “due only to the impact of migration on age structure” (i.e. more workers relative to non-workers).

Of course, anybody with a sliver of common sense knows that such a demographic dividend can only be temporary, since migrants also grow old. Therefore, they too will add to the pool of elderly Australians further into the future (i.e. after 2053), requiring an ever larger intake of migrants to ameliorate population ageing and an ever larger population – classic ponzi demography.

But don’t take my word for it. The argument was also made by Peter McDonald who co-authored a parliamentary research paper in 1999 (above) which concluded that it is “demographic nonsense to believe that immigration can help to keep our population young”, claimed that “levels of annual net migration above 80 000 become increasingly ineffective and inefficient in the retardation of ageing”, while also recommending “a population of 24-25 million within 50 years”:

There is no question that immigration, at least the first 80 000 immigrants, provides a worthwhile reduction in the extent of ageing of the population. However, immigration cannot ‘solve our ageing problem’. Substantial ageing of the Australian population over the coming decades is absolutely inevitable. To illustrate the lack of power that immigration has in relation to our age structure, we investigate the levels of immigration that would be required to maintain the proportion of the population aged 65 and over at its present level of 12.2 per cent. In doing this, we maintain the fertility and mortality assumptions of the standard but allow annual net migration to change.

To achieve our aim, enormous numbers of immigrants would be required, starting in 1998 at 200 000 per annum, rising to 4 million per annum by 2048 and to 30 million per annum by 2098 (Table 6). By the end of next century with these levels of immigration, our population would have reached almost one billion… The problem is that immigrants, like the rest of the population, get older and as they do, to keep the population young, we would need an increasingly higher number of immigrants…

It is demographic nonsense to believe that immigration can help to keep our population young. No reasonable population policy can keep our population young…

Levels of annual net migration above 80 000 become increasingly ineffective and inefficient in the retardation of ageing. Those who wish to argue for a higher level of immigration must base their argument on the benefits of a larger population, not upon the illusory ‘younging power’ of high immigration…

There is an upper limit to annual net migration. We argue that there were difficulties in the late 1980s when net migration rose for just two years to over 150,000 per annum. While it is not possible to be prescriptive, a sustained net migration level of 120 000 per annum is at the high end of what Australia seems to be able to manage.

Fast forward to 2018, and Australia’s population has already breached the “24-25 million” limit 31 years early courtesy of a mass immigration program that is around 2.5 times as large as young Peter McDonald’s recommended level.

It’s worth noting that the Productivity Commission also fully endorses young Peter McDonald’s claim that it is “demographic nonsense to believe that immigration can help to keep our population young”, noting the following over the past 13 years:

  • 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, since as stated by young Peter McDonald, it requires “an increasingly higher number of immigrants”. So why has old Peter McDonald ignored this truth?

It’s also worth noting that McDonald’s and Temple’s 2010 model only looked at the impact of immigration on per capita GDP, while ignoring all other pertinent issues:

At the same time, increases to migration add constantly to the population and this increases the burdens associated with the provisioning and servicing of a growing population. This gives rise to the question of balance. At what point do the disadvantages of increased population outweigh the advantages to the economy of increases in immigration? This is a very large question and is beyond the scope of this report. Instead, this report examines one component of this question. Is there a point where further increases in immigration lead to substantially lower marginal increases in the growth of GDP per capita? (p. 19,  emphasis added).

Anyone worth their salt knows that per capita GDP is a very poor measure of wellbeing, since it ignores vital issues like the degradation of the environment, the depreciation of natural resources, worsening inequality, and declines in individuals’ quality of life (e.g. traffic congestion and having to live in smaller and more expensive housing).

In this regard, the Productivity Commission is blunt, noting that “GDP per person is a weak measure of the overall wellbeing” in its 2016 Migrant Intake Australia report:

While the economywide modelling suggests that the Australian economy will benefit from immigration in terms of higher output per person, GDP per person is a weak measure of the overall wellbeing of the Australian community and does not capture how gains would be distributed among the community. Whether a particular rate of immigration will deliver an overall benefit to the existing Australian community will crucially depend on the distribution of the gains and the interrelated social and environmental impacts.

Interestingly, the final paragraph of McDonald’s and Temple’s 2010 reported concluded with the following warning that if infrastructure doesn’t keep pace with population growth, then both productivity and living standards will suffer:

While this report argues that immigrants will be important to the construction of productive infrastructure in Australia, if increased immigration proceeds without investment in new infrastructure, especially urban infrastructure, the result could be reductions in productivity through increased congestion and inefficiency. Thus, a plan relating to Australia’s future levels of immigration must be coordinated with policy for urban infrastructure especially housing, transport, water and appropriate energy supply. With constant fertility and net migration at 180,000 per annum, Australia’s population would rise to 35.9 million by 2050. This is a large increase and most of the additional population would be settled in the existing cities all of which are already under strain from infrastructure shortages. (p. 45)

Given that Australia’s infrastructure has unambiguously failed to keep pace with mass immigration, and that traffic congestion (among other liveability indicators) has unambiguously worsened, surely this renders McDonald’s claims about the benefits of mass immigration null and void?

Moreover, how does Peter McDonald square his purported economic benefits of mass immigration against Infrastructure Australia’s projections of worsening traffic congestion and reduced access to jobs, schools, hospitals and green space as Sydney’s and Melbourne’s economic and social infrastructure fails to keep pace with an expected population of 7.4 million and 7.3 million people by 2046 (see below tables)?

Clearly, young Peter McDonald beats old Peter McDonald hands down when it comes to assessing the merits of mass immigration.

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Unconventional Economist


  1. Did old Peter M honestly give a presentation with the first few charts above, where the ONLY TWO SCENARIOS presented are 200K NOM and ZERO?

    So no other options? No 70K, 100K, 150K?

    What a weak tool.

    • A real concern though… even if we reduced immigration to 100k, which most people agree with, we are demographically top heavy!

      Need to resurrect Howards tax breaks for families, minor impact to the budget. Puts Australia on a demographically stable footing. Because at the moment we aren’t!

  2. Well done Leith!

    The corruption of Peter McDonald.

    I doubt per capital GDP is going up. And there is no need to give “skilled” immigrants an Aussie passport. Dubai rarely gives out Emirati passports and the workers have to go back when they get old – it is not Dubai’s responsibility to look after them.

    • Jacob, must disagree with your comments. Why it’s not “Dubai’s” responsibility to care about the migrants after they served? Is it OK just to discard somebody who gave years of life, health etc to build the society for a tiny amount of cash? Another question is who are Aussies? Can you define which time period of immigration defines somebody as Aussie – is it limited only to those who invaded this land 100 or 200 yrs ago? I am not in favour of this mass immigration ponzi scheme, but I can tell you for sure that Peter is on of the most honourable persons I’ve ever met. M

      • JojoyubbyMEMBER

        Back in the time, temp worker were tax free. That m’s why it’s not Dubai s responsibility

  3. Great piece of analysis.

    Funny how Prof Smiley McDonald’s change of heart came after the Scanlon Foundation (funded by property developer Peter Scanlon who’s been making a killing from mass immigration) began to pump funds into his “research”. Clearly there is nothing here to see – especially if you are blind.

    Malcolm Turnbull once named Smiley as Australia’s best demographer. And we all know that we can take Malcolm’s recommendations to the bank….perhaps the same bank pumping debt into the concrete dog-box economy?

    • I know not why Turnbull was so desperate to remain PM. He reportedly almost quit after he got replaced by Abbott on 1 Dec 2009 anyway.

      Turnbull is certainly a complete fool – first he got fooled by Godwin Grech and now he got fooled by ScoMo:

      He asked how many want a leadership spill and 45 votes came forward, so Turnbull thought all 45 votes are in favour of Dutton. The reality is, 5 of those votes were from the ScoMo camp. So Turnbull resigned and Dutton only got 40 votes.

      How Morrison played everyone

    • Hi Clive. Can you provide any actual details of how Scanlon Foundation (Peter Scanlon) funds Prof Peter McDonald? It would explain a lot. McDonald referred to Prof Andrew Markus during his talk – as someone providing more reliable survey data on attitudes to NOM than others! And the link for Markus to Scanlon is very obvious of course; but not for McDonald to Scanlon.
      As said would really love to know some detail on any McDonald – Scanlon connection.

      • Hi Martin,

        Andrew Markus holds the Pratt Foundation Research Chair of Jewish Civilisation and his snout is is well and truly in the Scanlon trough. How McDonald managed to become a “demographer” with a degree in commerce is a mystery. But this is one very interesting dude, as are the times that propelled him to be the Big Australia demographer with a lack of an open record concerning his funding relationships.

        My suspicions were raised by how difficult it is to tie down the source of his funding. This is not usually that hard for researchers. A swag of cash was suddenly injected into an outbreak of “research” on “demography” that just happens to be fully supportive of mass immigration as the floodgates were opened and the concrete started to be poured into the dog-box formwork in 2006/07.

        The main event was this document funded by Scanlon where he was the cheer leader for Big Australia. That seems to be the moment that McDonald got his snout into the funding when he was at ANU.

        This is where it began and where the action is today. What you have to realise is that when you are the head of a department you effectively pull in funding for others. So it seems no coincidence that Dr Liz Allen got her start at ANU in a strange relationship where she is a social researcher who did a PhD in demography when not actually being in the demography department. In fact, her PhD has nothing to do with demography and cannot be found online. I smell a rat, but that rat got a job in demography at Melbourne University.

        This first Scanlon-Funded document was an interesting milestone for the Big Australia lobby. They ran conferences and were also deeply embedded in the workings of the Productivity Commission (PC). I remember this well as one of Australia’s most eminent reproductive scientists was trying to get a spot on their gig warning of the perils of population growth that he’d highlighted with UNESCO in other countries. He was essentially de-platformed and it became well known that a coup was being worked on and that policy decisions had effectively already been made. One of his concerns was the perils of having a young immigrant population. Conflict could be pretty much predicted in other nations by the same young demographic and high birth rate. Another issue was was ecological footprint, but no-one wanted to hear.

        You have to see the context, CSIRO ecology had been given the bullet. Universities were now dependent upon mass immigration to fund themselves. The leading ‘global warming’ R&D was shut down by Abbott and co. Ecologists have not been invited to “demography” conferences funded by developers for 2 decades. There are no ecologists left in any government institutions who are charged to look at these issues in any serious and objective way. They were also defunded and re-structured. The public sector now lines up behind government policy and rolls over.

        In the Productivity Commission document they got an economist to speak for environmental issues. Even though this might have seemed “safe” if is interesting to read the first and last words of his paper:

        In 2011 Harry Clarke wrote:

        “…business groups, and particularly the housing industry, clamour for higher migration to boost demand and to grow the economy….

        Refreshingly honest, but so too were his parting comments:

        “…there are a host of social arguments on the immigration issue that have been ignored here, mainly because they are beyond my competence. Even if the environment is comprehensively priced, there are plausible non-economic reasons for restricting population growth.

        These would not be discussed. Of course McDonald was there with his ANU hat on pushing for mass immigration as a labour market strategy:

        It was here that the the ‘Asian and Australasia Society of Labour Economics’ got it’s start at ANU. It is always informative to look at who sponsors societies of this type and I was genuinely surprised to see the following (below) – a virtual gaggle of federal agencies, the ANU and the ABS with its name up in lights. It is here that another well known mass immigration loon now known as Prof Raja Junk-Economics got his foot in the door:

        Previously I’ve never seen so many federal agencies sponsoring a conference – and one that seems heavily tilted towards mass migration in this case. They were even sponsored by the Centre for Research Analysis of Migration – a UK based organisation.
        This society seems to have emerged from ANU at the Research school of Economics in 2017 but is once more silent on its original sponsorship:

        Hence it appears that ANU has made a run on the business of “policy development” with its local clients being Canberra-based bureaucrats – and the links run deep. No doubt this is an academic money spinner that seems to have developed a co-dependence on government departments. No wonder that McDonald became Turnbull’s favoured “demographer”.

        Overall, it seem to me that the Big Australia push largely began at ANU, was championed by Peter McDonald and involved a strategy document produced buy Scanlon funding and worked hand in hand with the Productivity Commission agenda that was the way to bypass democracy and consultation with the Australian people. McDonald’s funding arrangements are opaque, but there is no doubt that Scanlon funded his hobby horse early on. A lot more digging has to be done to tie down the relationship between Scanlon, McDonald, Allen, Willox and Markus. Clearly they provided the justifications that a government, both ALP and LNP, wanted to hear – and still does. The entire process was corrupt as it resulted in a very significant public policy decided by an elite. It is well worth digging into the grubby exchange of funding and putting ANU under the microscope. I’d love to know how the ABC decided that Dr Liz Allen was one of Australia’s more notable researchers in demography. Coincidence? I’d also like to know how McDonald, Willox and Allen end up as the 3 talking heads on the 4 Corners program on Big Australia. Another coincidence?

        Something stinks more than the average banker’s crotch. This stuff is rancid. Shame that we have no investigative journalists left in Australia.

        Hope this helps.

  4. Young Peter McD didn’t have a mortgage and wasn’t long housing. Old one either has a mortgage or is long IPs or both.

  5. This just shows that one can do anything with statistics, just recalibrate the input variables to meet your defined outcome

  6. Seems to be trying to spook the horses with the Ageing Population boogy-man.
    Meanwhile in Japan, their economy is ticking along as they address this issue with automation and not a binary 200k or nothing immigration scheme.

    • Reusa will tell you that sheep need love too, and when you’re lonely…. all that free range lanoline will certainly prevent your tool from rusting. 😁

  7. I proffer my usual 4 word response to the demographics “argument”.

    Immigrants don’t grow old?

  8. “Anyone worth their salt knows that per capita GDP is a very poor measure of wellbeing”

    I don’t think Salt knows!

    How do all these University Professors keep their jobs? How are they all so mentally incompetent that they cannot link together the various sectors of an economy? Why is it so impossible to link together simple stuff like immigration, over-crowded cities that produce nothing, private debt, foreign debt and the sell-out of key assets to foreigners thereby destroying future generations?

    Or are they all just treacherous globalist pricks that deserve to be taken out and done like traitors used to be in days of yore?

  9. The other big problem is that with the population of Asia shrinking from around 2050 we’ll be struggling to maintain that level of NOM.

    • Hi Shaun. Peter McDonald said the same in the lecture – resources are better spent on other things than population policies! So he was explicitly asked whether he also did not support the Productivity Commission’s direct recommendation to Government in their 2016 Immigration Report to have a population policy.

      Nope apparently Peter does not support it.

      So we should all make far more of this Productivity Commission recommendation.

      Productivity Commission – Migrant Intake Report 2016

      The Australian Government should:
      •develop and articulate a population policy to be published with the intergenerational report
      •specify that the primary objective of immigration and the Government’s population policy is to maximise the economic, social and environmental wellbeing of the Australian community (existing Australian citizens and permanent residents) and their future offspring.

      Australia’s immigration and population policy should be better informed through:
      • genuine community engagement
      • a broad range of evidence on the economic, social and environmental impacts of immigration and population growth on the wellbeing of the Australian community
      • a published five yearly review of Australia’s population policy.

      The Australian Government should calibrate the size of the annual immigration intake to be consistent with its population policy objectives.
      – – –

  10. This is a classic example of “he who pays the piper calls the tune”. When universities were publicly funded they were run by Australians for the interests Australians as a whole.

    Now that they are increasingly funded by private sector interests or even overseas interests (either govt or private) and are often staffed by what I consider to be essentially overseas academics, they work on behalf of those interests which may not be the same as what constitutes the interests of the bulk of the local population.

    No doubt Old Peter is a lot wiser than Young Peter and knows where his bread is coming from and what he needs to do/say to advance his personal interests.

  11. They want a younger demographic via organic growth in Australia, then they can start building some F#@king amenity in this country for young people to live, prosper and who knows maybe one day consider having some children!

    * real action on housing affordability via reducing migration intake and reducing incentives for Boomers to retain the lion’s share of housing in Australia purely for their personal profiteering
    * Offer a plebiscite on Australia’s future population levels ! …is this a democracy or not?
    * nurturing a real productive economy
    * East coast domestic gas reservation policy passed into federal law
    * Stop flooding our labor market with overseas “skilled’ workers, 457 visas, 458 visas, Young Aussies call #BULLSH!T on this scam!
    * Means test the aged pension and stop handing out welfare to old folk living in houses worth many millions of dollars FFS!
    * Get the budget deficit sorted out – we don’t want the burden of excessive debt caused by Boomer greed and incompetence
    * Establish a royal commission into federal, state and local government misconduct/corruption. Start with Barnaby Joyce, Sam Dastyari, Bronwyn Bishop, Sussan Ley, Julia Gillard, LISA SCAFFIDI…. jeesus what a list! #GREEDY

  12. Under the GDP per capita graph there is an important disclaimer that the assumptions is that “migrants have the same labour productivity as other Australians” — that’s one hell of an assumption. Of course they don’t, past a certain point, have the same prodcuvitity — the main reason behind people’s productivity is the capital of the country per person. More people, equals less capital per person, meaning less productivity per worker, not more.

  13. The solution to aging Australia is clear: reduce the price of cigarettes and allow smoking in pubs and nightclubs and permit euthanasia.

    • blacktwin997MEMBER

      Pfffft, i wouldn’t call you a racialist at all. Nationalist at the very worst and even then, there does appear to be a non-insignificant trend as far as candour goes with this type of demographic.

    • Jesus…I almost gagged.. The tone of that article makes it seem like the poor innocent banks were beset by hordes of evildoers submitting false loan documents, and have been doing their very best to stop this plague on society. In reality, as the RC has shown, the banks were doing everything in their power to facilitate liar loans because commissions and profits.

      The banks and the MSM clearly rewriting history for their own benefit.

  14. Nice to see the Government practising complete fraud when it comes to the whole immigration = less aging thing:

    A legislative change that had made it more expensive to sponsor parent’s visas has been reversed in the face of an impending challenge to it in the Senate.

    Shruti Gupta had applied for a Contributory Parent visa 18 months ago, and says if the new rules had been implemented, she and her husband would have struggled to meet the new criteria.
    “We have two kids. My father-in-law he passed away so we can’t leave our mother-in-law by herself overseas. So it would have been very challenging for us,” said Ms Gupta.

    Really? Well it’s going to be very challenging for the critically underfunded Australian public health system to keep taking on more and more elderly migrants.

    Move back to India and look after your mother in law there until she dies, then come back to Australia.

    • Oh FFS, sometimes I despair.

      My girlfriend is a Pom who has been here 20 years. Five years ago her Mum died. She is now in England visiting her 83 year old father, who still lives there.

      The idea that moving to Australia entitles people to bring their elderly parents (who have contributed nothing to the country) along for the ride has to stop or it will destroy the welfare system.

      The Guptas need to go back to where they game from.