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Monday, 28 February 2011
Page: 1808


Mr KELVIN THOMSON (9:09 PM) —The release of the Sustainable Population Strategy Issues Paper was a welcome step forward in the national debate we need to have about Australia’s growing population. The Minister for Sustainability, Environment, Water, Population and Communities, Tony Burke, was right to say we should not have an arbitrary target. But that does not mean we should not have a considered target. Unfortunately the paper by one of the panels, the Productivity and Prosperity Panel, shows no understanding of the downside of the projected big Australia and trots out all the discredited old myths about the alleged advantages of population growth.

The first myth is: if it is balanced and managed well, living standards will rise with population growth, not fall. The fact is that a recent examination of the 100 largest US metropolitan areas from 2000 to 2009 found that faster population growth rates are associated with lower incomes, income declines and higher poverty rates. Unemployment rates tend to be higher in faster growing areas. The 25 slowest growing metro areas outperformed the 25 fastest growing in every category and averaged over $8,000 more in per capita personal income in 2009.

The second myth is: population growth will help lift living standards, not make them fall. The fact is that if this were true the wealthiest countries would be the most populous countries of Asia and Africa. In fact they are the world’s poorest. The nations in the world with the highest living standards have small populations. Eight of the top 10 nations in the world in terms of per person GDP have populations of 10 million or less.

The third myth is: a bigger workforce as a proportion of a larger population will mean more people paying taxes which will allow government to pay for essential services. The first fact is that one of the reasons the smaller nations are wealthier is they have a higher labour force participation rate. Because they are not running big skilled migration programs, job vacancies are filled by their unemployed. The second fact is that the bigger the population the more essential services and taxes you need. Bringing in more people does not make the task of providing essential services easier; it makes it harder.

The fourth myth is: the ageing of the population if ignored could produce labour market bottlenecks because there would not be enough skilled workers to go around. The fact is that Australia does not have a shortage of workers. Just to the north of my electorate, Broadmeadows has an unemployment rate of over 15 per cent. An ageing workforce helps reduce unemployment and provides opportunities for people with disabilities and Indigenous Australians to enter the workforce.

The fifth myth is: slowing population growth would not make the infrastructure problems go away. The fact is that it would certainly help. The reason Zurich has a much better public transport system than that of any Australian city, even though it is just as spread out, is Zurich’s and Switzerland’s stable population gives its policy makers time to address the needs. In rapidly growing cities infrastructure provision is like a dog chasing its tail—we never catch up. Jane O’Sullivan from the University of Queensland has calculated that population growth of two per cent per annum doubles the amount of money required to maintain adequate infrastructure.

The sixth myth is: slowing the rate of population growth will not make housing more affordable. The fact is that, yes, it will. During 2009 housing affordability around Australia declined by over 22 per cent due to a massive gap between the number of dwellings being built and the number of new people wanting housing. The Housing Industry Association said Australia’s fast growing population was pushing new dwelling requirements to record high levels. The inevitable consequence of this is rising house prices, rising interest rates and declining housing affordability.

The seventh myth is: the environment need not suffer from population growth. The fact is it has. In 2002 the Convention on Biological Diversity pledged countries right around the world to stop the rate of biodiversity loss. Last year, the International Year of Biodiversity, saw countries right around the world confess they had failed to stop the rot. Australia is no exception. We have hundreds of species of endangered birds, plants and animals and every year their numbers deteriorate.

Let me return to the claim that we have a shortage of skilled workers. It is quite remarkable that on the one hand we are told there is a shortage of workers and high migration is needed to fill the gap while on the other hand we have over 792,000 people receiving Disability Support Pensions, more than the number receiving unemployment benefits. Disability Support Pension numbers have grown over 30 per cent over the past decade, now cover five per cent of all Australians, will cost $13 billion this financial year and continue to rise despite government attempts to reduce them. We should be engaging people with disabilities in employment assistance and rehabilitation where appropriate.

The outgoing head of the Department of Families, Housing, Community Services and Indigenous Affairs, Dr Jeff Harmer, is quite right to say the government needs to ‘explore policies to encourage disabled people and older Australians into work, to lift participation and productivity’. I think that economists who mistake five per cent unemployment for full employment do the community and the nation a disservice. And I cannot understand why there is agitation about rising incomes as a consequence of population ageing when there is no agitation about rising food prices, water bills, land prices, petrol, electricity and just about everything else you can think of as a consequence of population growth.

Then there is the question of carbon emissions. Australia is one of the highest per capita emitters of greenhouse gases in the world. There is no reasonable prospect that Australia will reduce its total level of greenhouse emissions in the way that we aspire to while our population grows by one million every three years, as is presently the case. To do so would require massive, implausible reductions in per capita greenhouse emission levels. Population policy must be part of the plan to contain greenhouse emissions, not merely for Australia but for the rest of the world as well.

The relentless lobbying by employer groups for skilled migration is a smokescreen for their real desire to keep downward pressure on wages. It showed up again in the aftermath of the January floods. The claim that we will need more skilled migrants in order to cope with the flood damage is insulting and ridiculous. We were able to build the roads, bridges, schools et cetera that have been damaged by the floods. The suggestion that we have lost the skills needed to rebuild this infrastructure, if it has any substance, also suggests that relying on skilled migration is dumbing Australia down.

Furthermore, numerous studies show that new arrivals come with a big infrastructure requirement. They bring their families with them. All require houses, roads, schools, hospitals et cetera and many require English language and other forms of assistance. One academic has found that population growth of two per cent in a community doubles the infrastructure task of that community. In the years ahead the building industry will have its work cut out for it in rebuilding flood-hit towns and communities. As a nation, we have just had a flood come through the house. This is a time for replacing the carpets and furniture and getting the power back on, not the time to be putting on an extension.

The argument that the recovery effort will drive demand for jobs, leading to price rises and then to higher interest rates, ignores the impact of higher population growth on prices and interest rates. Population growth is driving electricity price rises, gas price rises, water price rises, housing price rises, food price rices and higher grocery bills. These price rises put upward pressure on interest rates. Why is there concern about inflation caused by workers getting higher wages but no concern about inflation caused by population growth?

Finally, the Productivity and Prosperity Panel claim that my plan to reduce net overseas migration to 70,000 per annum would still see our population grow to around 30 million by 2050. They say it is a myth that Australia can avoid a bigger population. It is nonsense to imply that we can never stabilise our population. Australia’s population increase is being driven by net overseas migration, and that is entirely a matter of government policy. Population growth is not inevitable.

The report by the National Institute of Labour Studies at Flinders University, titled Research into the long-term physical implications of net overseas migration: Australia in 2050, posted on the Department of Immigration and Citizenship website before Christmas, has a series of population projections into the future. It suggests that net overseas migration of 70,000 would give us 26 million people, rather than 30 million, by 2050.

The debate about population is an important national debate. I welcome the fact that the government has undertaken, through these panels, a study of population. It is giving Australians the opportunity to be involved in this and to express their views. I hope that Australians take up this opportunity and that we put ourselves on a more sustainable road than the road we are presently on.