Australia’s population ponzi scheme


By Stephen Williams

(Stephen Williams is a freelance journalist. He has done paid work for Sustainable Population Australia. This post first appeared in Independent Australia. )

Australia is running an ‘investment’ scam that relies on an ever-increasing number of punters to join in.

IF YOU ARE LOOKING for discord between policies that the major parties offer and what most people actually want, it is hard to beat population policy.

OK, OK – the major parties don’t actually have population policies – they have immigration policies that, as the Productivity Commission says in its 2016 Migrant intake into Australia report, work as de-facto population policies.

But let’s start with what most people actually want.

MacroBusiness’s Leith van Onselen has been relentless in his coverage of the population issue in the past few years, and he summarises the recent opinion surveys here.

Van Onselen misses the first Sustainable Population Australia (SPA) survey of 2015, which I spearheaded, although Adjunct Associate Professor Katharine Betts did most of the work. I also had a minor role in The Australian Population Research Institute survey of 2017 that built upon the 2015 SPA survey.

At the very least these surveys show a clear voter dissatisfaction with our high population trajectory as our major cities become crush-loaded.

Do we have ‘high’ population growth?

The Australian Bureau of Statistics releases a quarterly report that summarises our population numbers.

As you can see, Australia is increasing its population by almost 400,000 a year: natural increase is about 38 per cent of that and net overseas migration in about 62 per cent.

The increase is 1.6 per cent per year. To the non-statistician that might not sound like much, but it means we would double our population every 44 years at that rate of increase. We are now 25 million, so that would be 50 million in 2062.

To put that in context, the shit hit the fan in October 2009 when then Treasury head Ken Henry expressed concern over our projected population of 35 million people by 2050.

That led to prime minister Kevin Rudd’s baptism of fire when, like a boy scout enthusiastically collecting kindling at his first jamboree, he chortled his enthusiasm for a “big” Australia.

Yes, we could all get nice and cosy around Kev’s big bonfire and toast some marshmallows!

But the public backlash was fierce, with Julia Gillard eventually distinguishing herself from Rudd with the empty phrase ‘sustainable’ Australia rather than big Australia.

Back to reality, comparable countries to Australia have much lower population increases, and Japan even has a decrease.

The federal government largely determines our population numbers, both through spruiking pronatalism, as former treasurer Peter Costello did in 2004, or through adjusting net overseas migration, with former prime minister John Howard turbo-charging it in about 2006.

(Do not confuse our refugee intake with our overall migrant intake: the former tends to be between 3 and 5 per cent of the latter.)

Such high-population increases, mostly through net migration, then allowed successive governments to smugly say the Australian economy was the envy of the world, with a record-breaking run of ‘economic growth’.

Translation: GDP keeps increasing because you keep adding lots of new people.

Growth sounds good, doesn’t it. It is the opposite of death, decay or stagnation. But growth can also be a cancer, or a ‘population Ponzi’ scheme.

As I have argued elsewhere, there is good evidence that Australia has gone from economic growth up to the decade of the 1970s to uneconomic growth as the costs of expanding the economy become greater than the benefits.

Expanding the economy wouldn’t be so bad if it led to full employment in good jobs and equitable wealth distribution, with reasonable commute times in efficient public transport, but I could sell you a nice big harbour bridge if you believe we are heading in that direction.

Australian governments have conducted a number of inquiries that were largely, or partly, into our population numbers: the Menzies government’s Vernon report (1965); the National Population Inquiry (Borrie report, 1975); FitzGerald report (1988); Withers report (1992); Jones report (1994); Sobels report (2010); and the already-mentioned Productivity Commission report on migration (2016).

Space does not permit an analysis here, other than to say that governments generally ignore those reports that tend to highlight a lack of objective or scientific justification for ever-increasing high population increase in a country with Australia’s limited water resources; limited arable land; unpredictable climate; exposure to natural disasters; and sensitive biota with record extinction rates.

Indeed, the Australian Academy of Science has been concerned about our population numbers for decades, although you will rarely, if ever, hear population boosters mention this. As the academy said in 2010:

‘The Academy has consistently advocated that a large increase in Australia’s population should not take place without a full analysis of the consequences for the environment, in terms of land, water, sustainable agriculture, pressure on native flora and fauna, and social issues.’

People advocating business as usual – or even higher rates of population increase – almost never mention the natural environment, probably because they know next to nothing about it and its life-support systems.

On the other hand, people who express concern about our population trajectory often have scientific or environmental credentials, or are at least environmentally literate: contributors to the regular Fenner Conference for the Environment are good examples.

No, it is largely the business community, its think tanks and its big accounting firms that push for a big Australia, with the mainstream media being largely complicit in not challenging base assumptions that the growth agenda is built on. For instance:

  • What would be an ecologically sustainable population for Australia?
  • What would be an optimal population for Australia?
  • Does expanding the size of the economy always lead to increased wellbeing?
  • Who are the winners and losers from the current neoliberal growth strategy?
  • What are the costs and benefits of increasing our population and what weight should we give to these costs and benefits?
  • Why do many successful societies have relatively small populations?
  • What can Australia realistically do to help an overpopulated planet that is still expanding by 80 million people a year?

The population boosters trot out questionable arguments about the dire consequences of an increase in the proportion of older Australians; alleged skills gaps in the native workforce; and fatuous ideas to do with ‘dynamism’.

Meanwhile, we have almost 2 million people who want more work and can’t get it; full-time jobs are disappearing; wages have stagnated; private-sector debt has skyrocketed; and wealth has concentrated at the big end of town.

What sticks in my craw is the seeming capitulation of both the once-great environmental movement in Australia, and the progressive left in general, to the notion of demographic inevitability and neoliberal orthodoxy.

In fact we have a choice, if only we would exercise it.

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Victoria: Parasite State

Victoria: Parasite State
Bob Birrell

Australia’s affluent lifestyle depends on huge imports of manufactured goods, particularly hi-tech electronic goods – for the simple reason that few of these products are made in Australia. In the official statistics these goods are labelled as Elaborately Transformed Manufactures (ETMs). In 2015-16 Australia exported $20.8 billion worth of ETMs and imported $190.3 billion. The resulting deficit was $169.5 billion.

This deficit was largely covered by the export of primary goods, mainly minerals and fuels. There was an Australia-wide surplus of $129 billion in 2015-16 in exports over imports of these primary goods. Victoria contributed a tiny $1.3 billion to this surplus in 2015-16.

At first sight, this is not a pretty picture. Victorians’ life style appears to be dependent on commodity exports, most of which originate from Western Australia and Queensland.

But surely Victoria makes a contribution to the export of ETMs? After all, Victoria has been in the lead in promoting advanced manufacturing and other innovative industries since the early 2000s, when Bracks and Brumby led successive Labor governments.

At that time, there were concerns about the consequences of the Hawke/Keating governments’ reforms of the 1980s and 1990s, which included drastic reduction in tariff levels. These opened Australian manufacturing industry to global competition. The fear was that Victoria’s legacy of protected manufacturing industries was at risk.

Bracks and Brumby embraced Keating’s reforms. Victorians were told not to worry about this risk. This was because Labor was putting in place initiatives that would promote hi-tech advanced manufacturing in Victoria. These initiatives, voters were told in 2002, would ‘make Victoria one of the world’s most innovative and international focused economies’.

Bracks and Brumby set out an Agenda for New Manufacturing. The Labor government promised to provide some financial support for innovation. But the trump card was its determination to turn Melbourne into an exciting destination city that would attract the best and the brightest from around the globe. Docklands and various iconic buildings like Southern Cross station were part of this. Labor claimed that these bright newcomers would enhance Melbourne’s already strong base in science and technology research.

The strategy included plans to boost Victoria’s population – labelled Beyond Five Million. The goal was to grow the states’ population from around 5 million in 2004 to 6 million in 2025. It actually reached 6 million in 2015, with Melbourne increasing its domination of the state’s population, despite the plan’s stated aim to decentralise Victoria’s population.

However the Labor leaders took no chances. Their new planning scheme, Melbourne 2030, provided for massive growth in Melbourne’s population by rezoning much of inner Melbourne and all of the city’s major transport and shopping hubs for high rise apartments. In addition, a huge swathe of Melbourne’s fringe was rezoned for new housing.

Labor’s initiatives were rewarded with the accolade of the world’s most liveable city in 2002. With so many ‘creative’ people expected to be attracted, the Labor leaders promised that Victoria would become ‘a world leader in the 21st century drivers of prosperity’.

Now let’s turn to the real world. How has Victoria performed since these promises were made? Victoria’s contribution to Australia’s meagre exports of ETMs has actually declined since the early 2000s. In 2004-05 Victorian enterprises exported $7.2 billion worth of ETMs. In 2015-16 they exported $7.3 billion. This is less in real terms than in 2004-05, because the Australian dollar was worth far more a decade ago than today.

There have been a few hi-tech success stories in Victoria, notably CSL, but these gains have been more than offset by the losses stemming from the demise of protected manufacturing industries, including the motor vehicle industry, which was the leading exporter of ETMs from Victoria in the early 2000s.

Meanwhile as Victoria’s population swelled and its residents’ affluence has grown, the state’s appetite for ETM imports has surged. As noted, some $7.3 billion of ETMs were exported from in 2015-16. In the same year, Victoria imported $52.5 billion worth of ETMS. The result was a deficit on international trade of ETMs of $45.2 billion.

And it’s getting worse. Victoria’s deficit on international trade in ETMs is deepening along with its growing population. Just a few years ago, in 2012-13, Victoria’s deficit on ETM trade was $34 billion.

Victoria is a parasite state. In 2015-16 Victorians, who made up 25 per cent of Australia’s population, were responsible for 28 per cent of the national deficit in ETM trade of $159.6 billion. Furthermore, as indicated, Victorian made only a tiny contribution to Australia’s surplus in the trade of primary products that largely finances the national ETM deficit.

Victoria is relying on the rest of Australia to provide for its import intensive life style. Melbourne, of course is driving this dependence because of its increasingly dominant role in the state’s economy.

In Melbourne, this dependence is ignored. Why worry when the economy appears to be booming. However the boom is being driven by employment growth in the health, social assistance and education industries that are largely financed by the commonwealth and state governments and a boom in the finance and property industries fuelled by a massive increase in mortgage investment debt.

The current Labor government is basking in Victoria’s national leadership in job creation, the continued award to Melbourne as the world’s most liveable city and the evidence of cranes on every horizon.

This is a mirage – where not a word of the truth, as summarized above, is allowed to intrude.

Bob Birrell is the head of the Australian Population Research Institute

An edited version of this text was published in The Herald Sun, on Monday the 28th of August 2017, page 20.
It was accompanied by an article by John Masanauskas, Bailed Out: Victoria dubbed a parasite state as imports trump exports by $51 billion a year and followed by an editorial, 29 August 2017, Livability clouds gather.