Dan Andrews jumps aboard the ‘Big Australia’ idiot train

By Leith van Onselen

Of all the statements arising from Wednesday’s COAG pro-Big Australia love-in, the most idiotic has to be reserved for Victorian Premier, Dan Andrews. From The AFR:

Victorian Premier Daniel Andrews reaffirmed his push for a large migrant intake but hinted the federal government had to do more for his state regarding infrastructure..

“We don’t want to be looking at a smaller Victoria or a smaller Australia but we do have to look at investing in the things that make the biggest difference – road and rail, hospitals and schools,” Mr Andrews said.

For years Melbourne has led the nation’s population growth, expanding by an insane one million people over past decade and 250,000 people over the last two years alone:

Residents of Melbourne have seen the empirical evidence with their own two eyes, via worsening traffic congestion, being forced to live in smaller and more expensive housing, being sardine-packed on a train, experiencing overcrowding at schools and hospitals. This has been the lived experience in Melbourne, and it is only going to get worse as Melbourne’s population balloons due to immigration.

The fact remains that this “smaller Victoria” that Dan Andrews warns against does not exist. Even under the ABS’ lower growth (Panel C) projections, which admittedly still has immigration running at a high 175,000:

Victoria’s population would still reach 10 million people by 2066, whereas Melbourne’s would hit more than 8.5 million people:

At this level of growth, Melbourne’s liveability would be unambiguously destroyed, as projected in February by Infrastructure Australia. That is, as Melbourne’s population expands to a projected 7.3 million people by 2046, traffic congestion and access to jobs, schools, hospitals and green space will all decline, irrespective of how Melbourne builds-out:

Obviously, the stronger the population growth, the worst the crush-loading will be. So, why would Dan Andrews advocate such a future for the residents that he is supposed to represent?

The answer lies in the fact that Melbourne is a ponzi-based economy built around adding people and debt. Dan Andrews knows this. And he knows that the only way to keep a ponzi scheme going is to keep doubling down.

Melbourne exports little to the rest of the world and is heavily reliant on expanding services (think cafes, universities and financial services) and construction for growth:

However, if the population growth was to stop (or even slow materially), then so too would the growth in services/construction that it creates.

What is completely lost (or deliberately ignored) by Dan Andrews is the inconvenient truth that Melbourne’s ponzi model is not even delivering material gains in living standards, which would at least compensate somewhat for the ongoing loss of amenity.

While Victoria’s headline growth in Gross State Product (GSP) has been strong, and grew by 3.5% in the year to June, per capita GSP has flatlined over the past decade, growing by just 3.5% over that entire period:

The situation is so bad that Victoria has experienced the second weakest growth in per capita GSP in the nation since the Global Financial Crisis (GFC) hit a decade ago:

By far the weakest growth in Gross State Income per Capita since the GFC:

As well as the weakest growth in Gross Household Income per Capita since the GFC:

Also over the past 28 years:

Worse, Victoria’s gross Household Disposable Income per Capita was the lowest in the nation as at June 2018, even worse than lowly Tasmania:


Further evidence of this false economy is found in Victoria’s trade performance. Exports have recorded slow growth over the past 15 years, whereas imports have more than doubled. Accordingly, the state’s trade deficit has blown out to a whopping $53.6 billion in the year to June 2018:

Basically, all of the extra people flooding into Victoria (Melbourne) are massively increasing imports (think flat screen TVs, imported cars, etc.), but are doing little to boost exports. All of these imports will need to be paid for: either by accumulating foreign debt or by selling-off the public assets. Victoria has been doing both, as well as sucking financial resources from the mining states.

Again, Victoria (read Melbourne) is operating a ponzi economy that is growing for growth’s sake via mass immigration and debt accumulation, in turn pushing against infrastructure bottlenecks and reducing the living standards of incumbent residents via rising congestion, reduced amenity, and deteriorating housing affordability.

How is this economic model a success, Dan Andrews? Where’s the benefit for incumbent residents?

Of course, there is another path to take: lower immigration substantially and dramatically lower the flow of people into Melbourne:

And then focus on developing world-class export-led industries.

The world has 7.7 billion people. We don’t need to import them to sell to them. This isn’t what clever countries do.

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