The Australian Population Research Institute is an independent research organisation. It is devoted to understanding and communicating the nature of Australia’s demographic and economic situation and the policies and factors influencing this.
It is a not-for-profit Institute with no funding from corporate Australia. Its members are all participating researchers who contribute to the Institute’s work.
New research report, 17 March 2020
Katharine Betts, Demographic ageing: time-bomb or break through?
According to the Treasurer, Josh Frydenberg, the ageing of the population is ‘an economic time-bomb’ while Bernard Salt asserts that ‘The science is settled; there’s not enough workers to fund the likely number of retirees’.
But are they right? First some background.
All populations must stop growing eventually. There are two ways of doing this:
1) Have many children and die young. This method has been tried for millennia. It has obvious drawbacks but it does lead to a stable population with a youthful age structure.
2) Stop at two and live to grow old. In terms of minimising human misery this is a breakthrough. It also leads to a stable population with a mature age structure. This has a number of advantages. For example it pays a longevity dividend. Adults no longer have to spend all of their short lives trying to raise children. They now have more time to acquire skills and take on other forms of work. The drawback is that more of them are old.
The change from method one to method two is revolutionary so it’s understandable that it provokes debate about the consequences. Indeed many pessimists push for high rates of immigration in an attempt to defer the grim scenario that they foresee.
This paper examines the consequences of the change for:
• Age-related disability
• The labour force
• The costs of health care and social welfare
• The adequacy of government revenue to meet these costs
• And the effects on productivity and infrastructure
It finds that rates of disability are falling, labour-force participation among older people is rising, and that the Parliamentary Budget Office reports that age-related health and welfare costs are more than manageable. Moreover only around 28% of government revenue depends on income taxes on paid work.
While productivity may be impacted, lower rates of immigration could offset any negative effects by savings on the cost of infrastructure.
The paper also analyses recent ABS population projections to test the belief that high immigration makes us younger.
Yes it does (until the planeloads have to stop) but at a very high cost.
Take as a base case projection series 24. It produces the oldest population in 2066, one with a median age of 49.8 years. This assumes high life expectancy, nil net migration and a total fertility rate (TFR) of 1.65. In 2066 it leads to a population of 24.9 million.
Series 16 has the same assumptions as series 24 except that its TFR is 1.95. This produces a stable population in 2066 of 27.4 million with a median age of 45.8 years.
Thus it is four years younger than series 24. It has achieved this at a cost of an extra 0.6 million people for every extra year of youthfulness.
But if we add in annual immigration of 275,000 (series 13) the median age in 2066 is indeed younger – 39.5 years. But the population is much larger: 49.2 million – 24.3 million more than series 24.
It is 10.3 years younger than series 24 but at the cost of adding 2.3 million people for every extra year of youthfulness. This is not a bargain.
The costs of demographic maturity are manageable, provided we don’t add to them with excessive growth. If the pessimists were serious about modifying the average age of the population at the lowest cost they would minimize immigration and support the two-child family.
Research report, 26 November 2019
Bob Birrell and David McCloskey, Jobs and growth strategy: pathway to a low productivity economy
For Australia’s Coalition government, ‘jobs and growth’ is the catchphrase used to describe its claim to success as an economic manager. It bases this claim, in large part, on the remarkable expansion in employment growth of near 300,000 a year since 2016. It asserts that this outcome is attributable to its policies of budget thrift, its pro-business tax agenda and its commitment to economic reform. It also includes (though not publicly acknowledged) its policy of maintaining very high net overseas migration (NOM). This latter policy commitment is shared by the Treasury and the Reserve Bank of Australia (RBA) (though again not stated in the public arena).
The Coalition is struggling to maintain this ‘good manager’ status now that growth in the economy, in consumer expenditure and wages has slowed sharply. So has growth in labour productivity, that is, output per hour worked.
This report analyses these developments. It shows that Australia’s current economic growth is almost entirely attributable to increases in hours worked. The Coalition’s vaunted capacity as an economic manager has been reduced to dependence on extra work inputs, most of which are due to its high NOM policy.
In the case of the RBA, it has been carrying the heavy work of trying to kick-start the economy by aggressively reducing official interest rates. This policy has not worked.
It is not widely known that the RBA has recently admitted that the main reason for this failure is that Australia’s labour supply has been growing much faster than the RBA had predicted. This surge in supply, the RBA now states, has neutralised the stimulus effect of its interest rate cuts. It admits that such is the abundance of labour that employers have little incentive to increase wages.
The RBA, however, has not acknowledged that high NOM is the main source of this abundant labour supply. Nor has the Treasury. To do so would be to admit that the ‘jobs and growth’ strategy is part of the problem, rather than the solution to Australia’s current economic malaise.
This report argues that another bout of economic reform is unlikely to rectify the situation. This is because the impact of past Hawke/Keating reforms has been to destroy Australia’s manufacturing base. In the absence of targeted industry policy, further opening of the Australian economy to international competition will consolidate Australia’s dependence on its one area of comparative advantage, that is, its natural resource based commodities.
The conclusion is that it is foolish to load more and more people onto a domestic economy whose place in the global economy is dependent on this narrow commodity foundation.
Research report, 29 July 2019
Bob Birrell, Australia’s partner visa program: reform needed
Permanent residence visas issued to persons sponsored by an Australian resident for a partner visa make up 25 per cent of Australia’s permanent entry migration program. There were 47,825 issued in 2016-17 and 39,799 issued in 2017-18. In addition there is a huge backlog of pending applications. The Australian government is under pressure to clear this backlog and to withdraw its recent effort to more closely assess the bona-fides of these applications. If this happens the number of partner visas granted will increase rapidly.
The paper argues that this is because the partner visa is an attractive permanent residence option for the very large number of temporary migrants who are already in Australia and interested in finding a permanent entry pathway. It is also an attractive entry point for persons resident in non-western countries who have family and community connections in Australia who would like to move to Australia.
Analysis of who is obtaining a partner visa reveals that only a small fraction stem from boy meets girl international work and travel movements. About a third of the partner visas are issued to temporary migrants already in Australia who manage to find an Australian resident willing to sponsor them and another third to persons who connect to sponsors in Australia via chain migration links.
The main reason why so many persons manage to obtain a partner visa is that Australia has the softest rules on partner eligibility in the western world. These rules allow an Australian resident to sponsor a partner if just 18, unemployed, on a welfare benefit and still living at home. All that is required for a resident to sponsor someone on a partner visa is some (until recently) easily established evidence that the relationship between sponsor and prospective visa-holder is genuine.
New blog post, 29 July 2019
Stephen Saunders, Why Treasury migration forecasts matter —and why they’re unconscionably high
Net migration is Treasury’s population lever. They adjust it without explanation or scrutiny and in the 21st century have more than doubled it. Their migration assumptions underpin their forecasts for GDP growth and also feed the Australia’s active and self-interested growth lobby.
Research report, 10 May 2019
Bob Birrell, The 2019 election and the impending migrant parent deluge
Labor’s proposed new temporary visa for parents is extraordinarily generous. It will apply to all parents with children in Australia regardless of the children’s capacity to provide for their parents. There is no cap on the numbers. Nor is there any requirement that sponsors take on any financial obligation for the public services their parents receive.
Labor’s proposal is for a renewable five-year temporary visa. It is a de facto permanent entry visa, since no Australian government will force parents to return home after five to ten years of continuous residence here. It will eventually require the Australian taxpayer to assume the welfare and health costs of these elderly residents.
There is no parallel to Labor’s proposal in other western countries. All, even Canada, hedge parent migration by applying strict financial obligations on the sponsors.
This report explores the implications of the parent visa should it be implemented as implied by the limited information Labor has provided on the rules determining who is eligible. It could result in the issuance of some 200,000 parent visas in the next three years, should Labor win the 2019 federal election.
Research report, 22 April 2019
Bob Birrell, Overseas students are driving Australia’s Net Overseas Migration tide
There is widespread awareness that overseas students are a large and growing presence in Australia.
But few observers would know that by 2017-18 overseas students were the largest contributor to Australia’s very high level of Net Overseas Migration (NOM). According to Australian Bureau of Statistics (ABS) estimates, overseas students comprised 104,987 of the overall level of NOM of 236,733 in 2017-18. That’s 44 per cent of total NOM.
Nor would many observers be aware that, over the six years from 2011-12 to 2017-18, overseas students were by far the largest growth point in Australia’s NOM. Their contribution increased from 25,700 in 2011-12 to 104,987 in 2017-18.
In the absence of the increasing contribution of overseas students, Australia’s NOM would have declined to around 150,000.
The student share of NOM in 2017-18 of 104,987 was far greater than that attributable to movements of those holding permanent residence visas – which was 66,548 in 2017-18.
Yet almost all the recent debate about the size of NOM and the Coalition government’s proposals to deal with the scale of NOM has focussed on the permanent resident component. The Coalition plans to reduce the impact on Sydney and Melbourne by diverting some who obtain permanent visas to regional areas.
The far more important size of the overseas student component has barely rated a mention in this debate, either by the Australian government or commentators on the migration issue. Nor are many commentators aware that overseas students are by far the largest contributors to population growth in inner Sydney and Melbourne.
This report explores the factors that have helped bring about the student influx. It shows that it was mainly due to Australian government decisions beginning in 2011. These diluted the English language and financial requirements overseas students had to meet in order to obtain an overseas student visa. The purpose was to promote the overseas student industry.
The report examines the consequences of growth in the overseas student presence for the labour markets and for the congestion issues now afflicting Sydney and Melbourne.
Research report, 11 April 2019
Katharine Betts and Bob Birrell, Immigration, population growth and voters: who cares, and why?
The TAPRI national survey of 2029 Australian voters was run in October/November 2018.
It found that half or more of Australian voters reject the progressive agenda of continual population growth and ever-growing diversity. This is the agenda embraced by Australia’s cultural and political elites and by most graduates.
The survey shows that 50% of voters want immigration to be reduced, 72% say Australia does not need more people, 63% want Australia’s manufacturing industry protected by tariffs, 60% favour turning back all boats carrying asylum seekers, 56% think Australia is in danger of losing its culture and identity, and 47% support a partial ban on Muslim immigration.
A much greater share of non-graduates reject the progressive agenda than do graduates.
This pattern is also found among Brexit voters in the UK and Trump voters in the US.
Some theorists argue that this is because non-graduates are more likely to have been ‘left behind’ in an economic sense.
A few others, such as Eric Kaufmann in White Shift, argue that this is not the main cause. Rather, most dissenters feel threatened by huge recent increases in migrants from non-western cultural backgrounds.
They also resent the way in which the graduate class denigrates their concerns.
The TAPRI results affirm the cultural thesis.
For an overview of the results see Survey results TAPRI media release
Research report, 19 December 2018
Bob Birrell and Katharine Betts, Australia’s higher education overseas student industry revisited
The Department of Education and Training has recently released higher education enrolment statistics for 2017. These show a striking increase in the share of commencing overseas students to all commencing students for all Australian universities from 26.7 per cent in 2016 to 28.9 per cent in 2017. Growth in this share in the Group of Eight (Go8) universities has been particularly rapid with several reaching over 40 per cent of total commencing enrolments in 2017. This report details this expansion and discusses some of the implications. It concludes that university claims that increased enrolments of overseas student do not detract from domestic enrolments are not correct, especially in the case of the Go8 universities.
New research report, 21 November 2018
Bob Birrell and Katharine Betts, Australia’s higher education overseas student industry: in a precarious state
Since 2012 there has been a sharp and sustained increase in the number of overseas commencing students at Australian universities. The share of overseas student commencers to all commencing students increased from 21.8 per cent in 2012 to 26.7 per cent in 2016.
This increase was particularly marked at the Group of Eight (Go8) universities. At the University of Sydney this share increased from 22.8 per cent to 39.2 per cent between 2012 and 2016. Almost all of the Go8 increase came from Chinese students.
This report explores the factors shaping these enrolment successes and their consequences for the teaching and research activities in Australia’s universities.
It concludes that the overseas student industry is in a precarious state because of its high dependence on overseas-student fee revenue and because current enrolment levels are not secure.