How many Australians ?

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.

43 thoughts on “How many Australians ?

  1. @TerjeP (say tay-a)

    Deabte is fine Terje, and personally I’d favour a greater reliance on more indirect methods of taxation/levying as in practice, evasion is more difficult, and collection costs tend to be lower.

    That said I believe a mix is needed and whatever the starting point is, it should be sharply progressive. Clearly, if one relied too heavily on indirect measures, an illicit economy would develop and then we’d have to spend significantly more on compliance.

    So a progressive income tax, along with something on capital-appreciating assets is needed. Why anyone ought to be earning more than 50 times what any other full time worker in the same economy is earning is something I find hard to understand. It’s not necessary, not just and not even efficient.

  2. stockingrate :
    Great post (and comments). Especially agree with the view that we should not grow the permanent population because of a temporary mining boom.
    The Australian economy is based upon natural resources. Our relatively high standard of living (and quality of life) is based mainly upon having a small number of people relative to those resources.

    I tend to agree with this, as a short term boom can make people believe that it remain the key trend. The Dot.com and GFC boom and bust saw people fall for this elementary lapse in logic and/or foresight. The tendency to project the current state onto a future seems to be a cognitive bias almost anyone can fall for.

    My question is how many models are being considered, and what external factors need to be considered. Let’s assume a >2 degree warmer world by 2030 (via CSIRO report). What does that do to our ability to produce the necessary energy/resources to support a population. And how does how population policies reflect the potential for large scale population displacement if climatic condition in the Pacific and SE Asia worsen? Though not a certainty, in terms of probabilities this is a likely outcome.

  3. @gerard
    Spot on.

    IMHO the debate back-to-front. Instead of focusing mainly on immigration as a cause of population growth we should focus on the lack of emigration. If we could get more Australians to move overseas then we could stabilise the population, increase the diversity and create better international links. After returning to the country after spending 10 years away I was saddened by how clueless many Australians were about the rest of the world and how unjustifiably “proud” Australians were after Howard’s small minded nationalism. Why do we need to “keep” and train all the unemployable young locals, why not give them a grant to leave so they can find something useful to do in the world. Many Australians had no choice except to go overseas in the late 90’s to get any useful work experience because of the stultifying local employment scene after the recession, what’s so special about todays youth and do we really need them all?

  4. It’s true that migration – at least at anything less than absolutely massive levels – is no answer to population aging. But then population aging in Australia is massively overblown as a “problem” – for a variety of reasons the issues here are just not the same as those in continental Europe. But then again, raising the pension age in Australia does amazingly little either way to affect these problems, such as they are.

    The real question is how many Australians do we want? I reckon we can certainly sustain a far larger population than we have, but only at the cost of them having a Hong-Kong lifestyle. Measured GDP per capita will be higher than at present (cram us together and we’ll trade with each other a lot more), but all the things that matter for human welfare that aren’t measured in GDP will be worse than at present. A crap environment, big city neuroses everywhere, little real individual freedom and autonomy because we’ll all be so interdependent, etc.

    Then again, ceasing inward immigration would mean we become, once again, an insular and backward people at the arse-end of the planet. The way we can culturally square this population circle, though, is to aim at low net migration but large gross migration flows. That is, encourage Australians to piss off elsewhere. mind you, I can’t see that program being an election winner.

  5. @Michael

    Anyone born in Australia, or granted permanent residency, should have every right to make a decent livelihood in Australia.

    Age is not a relevant issue.

    Emigration assisted the UK in the past, and many Third world countries benefit by expatriates remitting income back home.

    So we should encourage Australians to gain international experience but not so as to question;

    “do we really need them all?”

  6. derrida derider :
    I reckon we can certainly sustain a far larger population than we have, but only at the cost of them having a Hong-Kong lifestyle. Measured GDP per capita will be higher than at present (cram us together and we’ll trade with each other a lot more), but all the things that matter for human welfare that aren’t measured in GDP will be worse than at present. A crap environment, big city neuroses everywhere, little real individual freedom and autonomy because we’ll all be so interdependent, etc.

    Having lived in a “shoebox” in Hong Kong I can say that the benefits of compact cities can almost outweigh the costs (poor air quality tips the scales). Some things to keep in mind about Hong Kong are that the density is partly a product of the hilly landscape and shoreline. It’s densely packed but you don’t have to travel far to be away from the metropolis. In fact you can probably get out of the city faster than in any Australian capital city. There is a great deal of convenience and freedom – and all the consequent externalities too. It’s not a lifestyle that suits everyone, but either is the featureless suburban sprawl that Australian’s are forced into. Why can’t we have less urban sprawl and more density in the inner and middle suburbs? Could that be more sustainable than less population living in low density sprawl?

  7. Chris Warren :
    @Michael
    Anyone born in Australia, or granted permanent residency, should have every right to make a decent livelihood in Australia.

    I’m fine with that, but the current economic policy doesn’t address this seriously. If we had some kind of workable full employment policy then I would support it. But we could also have a policy to reduce Australia’s per capita emissions.

    Age is not a relevant issue.

    Not according to your screed on gen x/y 😉 but trollery aside you are right, age isn’t relevant – bogans of all ages and classes should be encouraged to leave.

  8. “bogans of all ages and classes should be encouraged to leave.” I should stress that I mean that in the nicest possible way – it would do them good to expand their horizons and free them of the oppressive small mindedness they are indoctrainated with thanks to what passes for the media these days.

  9. There are many environmental issues besides climate change and water though. There’s a clear link between population pressure and biodiversity loss. Australia has some of the most unique flora and fauna in the world, as well as the most rapid loss of those species.

  10. Also, it’s not at all clear that population growth even correlates with GDP per capita growth. Have a look at the graph on this page. Certainly employers benefit, as do rent-seekers who own fixed resources, but I’m not sure we ought to privilege their economic concerns over the unemployed.

  11. I notice that a lot of comments tend to treat people (migrants and others) as if they were interchangeable parts – all the same except for the quantity. A lot of social issues – and this includes issues of how the environment is regarded and treated – revolve around how people inter-act. And this is largely a product of time spent together. A population drawn from all over, thrown together as a labour force, is not going to have much in the way of political or social networks (that’s why, in the 19th century, plantation labour pools were built this way in Malaysia, Hawaii, East Africa, Fiji, Mauritius and other places).

    If we think population and migration are related to sustainability, we have to think about rates of change, where people come from, how they settle here, and whether the economy can be pushed towards more environmentally friendly settlement patterns.

  12. Peter T :
    … A population drawn from all over, thrown together as a labour force, is not going to have much in the way of political or social networks (that’s why, in the 19th century, plantation labour pools were built this way in Malaysia, Hawaii, East Africa, Fiji, Mauritius and other places).

    Leaving aside the minor point that there was no Malaysia in the 19th century (it was Malaya proper, Sarawak, Brunei, and British North Borneo, each under a different system of association with the British Empire), and the major one that outside groups weren’t brought in there or in East Africa for plantation labour but for other roles, that wasn’t actually why it was done. There were quite other reasons, even though it did have an effect. But that effect wasn’t always helpful to those who brought the workers in, since it meant communal tensions (often between Muslims and Hindus from India).

  13. Peter T :
    A population drawn from all over, thrown together as a labour force, is not going to have much in the way of political or social networks (that’s why, in the 19th century, plantation labour pools were built this way in Malaysia, Hawaii, East Africa, Fiji, Mauritius and other places).

    I would have thought that modern communications technologies and globalisation might have reduced the homogeneity of people from the same cultural group. I’m not sure how much useful or worthwhile culture I share with a lot of “true blue” Australian’s as you might call them. Plenty of them show virtually no regard for the fragile environment – in fact as a commuter cyclist I would encounter a multitude everyday.

  14. PM Lawrence

    Read Malaysia as a typo. Indians were brought into peninsula Malaya as rubber plantation labour.

    My point is that elites who feel able to detach themselves from the larger society (whether as imperialists or through cultural migration -eg where upper classes identify more with some foreign model) have a record of using migration, among other things, to weaken social solidaity among their inferiors. This may be unconscious, but it works for them, if not for the larger society.

    Michael – my point is less about homogeneity than about the ability to maintain political discourse. This is a relative rather than absolute value, but it can weaken to the point that democracy is simply impossible.

  15. @Peter T
    I can see your point as it relates to Malaya and maybe even to modern South East Asian economies that rely on large transient temporary migrants. Is there a contemporary analogue of this in a developed country? Just trying to work exactly where you are coming from.

  16. Michael

    In modern countries, one good example is Latin American migrants in the US (and stoushes over language, unionisation, migration policy, residence rights, schools….). I think this was also an element in UK migration policy since the 50s. And a glance at the stats for wage share of income in the US suggests it is an effective strategy.

    My point is that migration can be an element in class struggles as much as globalisation is. Typically, elites who want to avoid issues of distribution find large-scale immigration of compliant foreigners convenient. If the migrants are too different in outlook, the result in the longer run is a series of clashes over how the country is run, for whom, and on what principles (Malaysia and Fiji are two good examples, but there are many others). The clash of cultural principles makes it difficult to reach and sustain the kinds of ongoing compromises on which democracy rests.

  17. Pr Q said:

    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.

    Its been a sleeper, not for any want of activity on my part. I have been banging on about the immigration-driven population boom for seven long years now. Most elaborately about eight months ago in this long-winded post, on this very blog. For my troubles I got nothing but flack. Now, finally the rest of the punditariat wakes up.

    FTR I am neither pro- or con- high immigration in any absolutist sense. It all depends on the ethical, economical and ecological circumstances. But I dont like seeing the issue brushed under the carpet, with whistle-blowers censured and censored.

    Its probably sounds a tad spiteful and vindictive but I reckon I earned the right to boast “I told you so”.

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