I’ve been meaning, for a while, to write a post about Australia’s population, and the announcement that a new position of Minister for Population has been created is a good place to start. It takes some of the edge off what would have been my first complaint, namely that policy decisions implying a large increase in population have been taken without any real public debate. This has been a bipartisan process, driven by increases in net overseas migration which took off under Howard (reaching about 200 000 a year) and have continued under Rudd (reaching nearly 300 000).
However, the figures are distorted by the increase in numbers of overseas students arriving here. According to demographer Peter MacDonald, the long-run intake is around 180 000, and hasn’t changed nearly as much as the net arrivals figure would suggest. However, a substantial number of overseas students are seeking permanent residence from the outset. Gaming the system in this respect had become a more or less overt racket, until recent policy changes, and it remains to be seen if these policy changes are effective. Leaving aside such manipulation, a significant number of people who arrive here as students are likely to seek to remain in Australia for one reason or another, for example because they meet and marry an Australian resident, or simply because they make lots of friends and like the place.
The consensus has broken down, now that the Opposition is promising a cut in migration and doing a little rewriting of history in the process, as with
Senator Scott Morrison’s disingenuous reference to an average intake of 125 000 under the Coalition, an average that conceals a rising trend.
For practical purposes, population policy in Australia means immigration policy (as Madonna King points out here, the fact that Tony Burke is combining the population portfolio with agriculture, fisheries and forestry, rather than with immigration, makes very little sense). Unfortunately, there are few issues surrounded by more misconceptions, on both sides, than immigration.
One hardy perennial, put forward by Wayne Swan recently is that migration will offset the changes in the population age structure caused by the facts that Australians are living longer (aka population aging), and that our fertility rate is no longer high enough to drive population growth (that’s been true since the 1970s). His own department knows better, saying “While there are undoubted benefits in maintaining net overseas migration, migration cannot stop the ageing of our population”. More importantly, the whole notion of a population aging “problem” is a furphy. The fact that we are living longer implied financial problems for the government when the eligibility age for the old age pension was fixed (65 for men, 60 for women). But now that the pension age is increasing in line with increased life expectancy, this problem has been solved. Some analogous points apply with respect to self-funded retirement. Especially with lower rates of return on investment, increased life expectancy that most people will have to work longer to afford a comfortable retirement. But presumably not many of us would want to die younger in order to save on superannuation contributions.
Another claim, put forward by Peter MacDonald here, is that we need more migrants to avoid ” a severe risk of a spiral of wage inflation and interest rate rises”, associated with the mining boom. The mining boom is a phenomenon of the last decade. It may perhaps last another decade, but the current driver, the massive movement of Chinese from the countryside to the cities, can’t go on much longer than that. Responding to such medium term events with policies that will produce a permanent increase in our population makes very little sense.
On the other side of the debate, there’s a fair bit of confusion about the impact of migration policy on greenhouse gas emissions and emissions trading. In the long run, it seems clear that the only sustainable option is for a ‘contract and converge’ agreement in which everyone in the world has the same emissions entitlement per person. In this context, international migration makes a difference. In the short run, migration from countries with low emissions per person to countries like Australia with high emissions, obviously makes it harder to reduce global emissions. It’s important to remember though that a lot of our ‘excess’ emissions come from carbon-intensive industries like aluminium smelting rather than from a high-emission lifestyle. Changing migration won’t have much, if any, effect on the size of these industries.