Why the Morrison Government should not take us back
The great Gough Whitlam said when he was Prime Minister that he didn’t think Australia’s population would grow much in future, nor did he think it should. As recently as the year 2000, Howard Government Immigration Minister Phillip Ruddock expressed the same view.
In a speech about population, Phillip Ruddock said that demographic forces would cause Australia’s population to grow increasingly slowly towards the mid-century, when it would reach around 24 million or a little more. “At that point or soon afterwards it will virtually stabilise in size and age”.
He went on to say that the first 80,000 net migrants per year contribute to reducing the ageing of the population, but that “Net migration above that level brings us rapidly diminishing returns”. He noted that “Current trends in net overseas migration suggest that, over the long run, net migration may average out at around 80,000 per annum”. He said that from an environmental perspective, all countries must eventually seek to stabilise their populations, and that it was our good fortune that this was possible within our lifetimes. He also said that population growth was not needed for per capita GDP growth, and that an ageing population would be accompanied by increased investment in education and research, and rising real incomes.
When Phillip Ruddock predicted in 2000 that Australia’s population would slowly grow to 24 million by 2050 and stabilise after that, he didn’t see himself coming.
A few years later he ratcheted up our annual net migration from 100,000 to well over 200,000, where it has basically stayed ever since. His attraction to the 80,000 figure disappeared without trace. In 1998 the Australian Bureau of Statistics forecast that by 2051 our population would grow to 24.9 million. We reached that number in 2018 – 33 years early.
The consequences of this rapid population growth have been dramatic and far-reaching. Underemployment has risen, job security has declined, and wages have stagnated. Our cities have become congested and housing has become unaffordable. Young people have been fitted up with an axis of financial evil – job insecurity, housing unaffordability, and student debt.
The environment has also suffered greatly. When I got interested in protecting the environment around 1970, I thought we would learn from the mistakes of the past and do a much better job of protecting this unique and beautiful land. Wrong.
In Australia, and right around the world, the past 50 years have been the most devastating for the environment in human history. Habitat destruction, species extinctions, climate change, ocean pollution, waste – all worse than ever before. There are twice as many people as there were back in 1970, but on average the population of everything else has been cut in half. As well as making Australia uninhabitable for other species, we have made it less habitable for ourselves. Tree canopy cover and public and private open space have diminished.
The cost of infrastructure has ballooned. Instead of economies of scale, we now have diseconomies of scale – tunnels and bridges are much more expensive than laying tarmac over the ground. Land in the CBDs has become so expensive it is a disincentive to businesses thinking about whether to locate their operations in Australia or abroad. Governments are so flat out dealing with the infrastructure task that they no longer have the money or the head space to genuinely tackle our pressing social ills – homelessness, mental health, drugs, Indigenous disadvantage, habitat destruction. They are reduced to skating over the surface; too busy managing the problems of growth to focus on the things that could unite us as a nation and give us all a stake in our community.
Rapid population growth has also led us down the road to high rise. High rise is less sustainable than detached houses with front yards and backyards, with space for solar panels and rainwater tanks and tree canopy and growing food. People who believe that just because they can’t see their environmental footprint, that they don’t have one, are delusional.
But the coronavirus pandemic has opened up a window of opportunity to get off this treadmill. First, it has shown us that it is not safe to be dense. Not only is high rise not sustainable, in a pandemic it is a health risk. The pandemic spread fastest in the crowded cities. It spread in apartment lifts, through air conditioning systems, on public transport. The denser the city, the faster the spread. The twentieth century global phenomenon of urbanisation and megacities was revealed to be a trap. One of our senior health officials called high rise buildings “vertical cruise ships.” People started working from home, because it was safer. We’d been exhorted by the property industry to become “more like Manhattan.” But in Manhattan someone was dying from Coronavirus every two minutes.
Secondly, the pandemic saw an end to the massive inflow of international students and temporary migrant workers. Our population growth decreased to its slowest rate in a hundred years. There was much hand wringing about how the economy was going to collapse as a result. Did the sky fall in? Did our economy crash like a spent firework? No. Unemployment is back to pre-pandemic levels. Underemployment is the lowest it has been in 7 years. The youth participation rate is rising. Young people are getting a go.
The Reserve Bank May Quarterly Statement on Monetary Policy says that the pause in Australia’s migration program will lead to higher living standards for Australians. It says that as a result of the halt to incoming migration, “GDP is expected to be on a higher trajectory, supported by a higher per capita household income and a strong contribution from public demand.”The Bank says that “a sustained period of economic recovery could lead to wages pressures emerging more quickly if new labour supply remains constrained.”
Employers are not happy about this, and are screaming for the “re-opening of the borders”, and complaining that they can’t find workers. This is usually an unfinished sentence. The complete sentence is “I can’t find workers at the wages and conditions I am offering”. Employers having to offer higher wages, or on the job training, in order to attract workers, would be a good thing. The flatlining of wages caused by Australia’s rapid population growth has seen falling living standards for many, including many of our less well off. And indeed the Reserve Bank itself has said that low wage growth is a barrier to post pandemic recovery.
The Reserve Bank’s Statement is consistent with the findings that the migration pause is good for workers and wages. From Commonwealth Bank Senior Analyst Gareth Aird, to Leith Van Onselen of Macrobusiness, and from academics both left (Professor Ross Garnaut) and right (Professor Judith Sloan).
It is also consistent with years of economic data which show that small, slowly growing populations have higher living standards than large, rapidly growing populations. The wealthiest, healthiest and happiest countries all have populations of less than 10 million.
Most Australians instinctively understand all this to be true. When asked about it, they have never supported “Big Australia”. That has not deterred political and business leaders, or media and other commentators. They tend to belong to one or more of three camps.
The first is engaged in special pleading on behalf of particular industries or businesses that profit from population growth. They exaggerate the importance of their particular industry. Economics 101, reinforced by the pandemic, is that if people aren’t spending money on overseas holidays they are spending it on caravans. If they aren’t spending money in restaurants and cafes, they are spending it on groceries at Coles and Woolworths. We need a strong social security safety net to help individuals who are adversely affected by economic and social change, but government policy aimed at propping up particular businesses or industries is crony capitalism.
The second camp expresses concern about population and workforce ageing. This scare campaign, with its bleak vision of an ever-diminishing workforce holding up an ever-growing proportion of retirees, is without foundation. Our labour market participation is rising, not falling. More women are entering the workforce. More retirees are ageing more healthily, and working longer. Yes, we have more retirees, but we have a smaller cohort of under 18s, who are also dependants. Ageing is a sign of success, both individually and collectively. Other countries with an ageing workforce are doing fine. Don’t worry about ageing, be happy! The scare campaign also devalues older people, which is a poor reward for their continuing contribution to our society both financially and as volunteers, mentors, and unpaid family carers.
The third camp believes in “open borders”. They think that any and all opposition to migration is racist, or xenophobic, or “dangerous”. Presumably this makes Gough Whitlam, Bob Hawke, and Paul Keating, who all ran much smaller migration programs than the one we have had for the past 15 years, bigots. One wonders how big the program would have to get before the “open borders” brigade considered it too big.
Global polling a few years ago found that upwards of 600 million people would move to another country if they could. Given how revolutionary the impact of such movement would be, “open borders” is every bit as extremist a position as the communism which the Fabian Society of the early twentieth century had to confront. “Open borders” is ecological nonsense – with the global population increasing by over 80 million every year, it is a recipe for habitat destruction, species extinctions and climate change on a devastating scale. It is also political nonsense. Voters around the world have shown they will vote for the likes of Donald Trump, Nigel Farrage, Marine Le Pen, Tony Abbott and Pauline Hanson before they would accept it.
We have a once in a generation opportunity to reset the migration button, and return the international student and temporary visa programs to their late 20th Century levels. This would provide opportunities for young people, who have been deprived of the job security that I and my generation enjoyed.
And most importantly, it might help us Close the Gap. In 2008, indigenous employment was about 48% and non-indigenous employment was 75%. That is, three quarters of non-indigenous adults were employed, but only half of indigenous Australians. The Council of Australian Governments set a Closing the Gap target of halving this disparity in 10 years. But 10 years later, in 2018, non-indigenous employment remained around 75%, while indigenous employment had barely moved – 49%, or still one in half. This is our chance to do something really meaningful to Close the Gap.
The Morrison Government talks the talk of wage growth and getting unemployment down. But there is every chance it will succumb to big business pleading and seek to re-establish our ‘population Ponzi scheme’ as soon as it possibly can.
At this point the Left of politics should get off what has been a politically and environmentally disastrous train. It should demand that we put the health of Australians first. It should demand that we prioritise Australian jobs and Australian workers, through measures such as genuine labour market testing. It should demand that we get rid of provisions in trade deals that undermine our democratic sovereignty. It should demand that we put tree canopy cover and a genuine say for residents in planning decisions ahead of property developer greed.
Finally, it should demand that that governments stop expending all their time, energy, and money on managing the problems of population growth, and focus on things that could unite us as a nation, and give us all a stake in our community – tackling problems like homelessness, mental health, indigenous disadvantage, drug addiction, and habitat destruction.
Kelvin Thomson was previously the Federal Member for Wills, occupying a variety of Shadow Ministerial roles as well as Parliamentary Secretary of Trade, and later Schools, in the Gillard Government.@HonKelThomson
Series: Australian Fabians Review - Issue 2
Author: Kelvin Thomson