The Morrison government’s new population plan will have little effect on Australian population growth. Appropriately, it looks to reduce the concentration of this growth in our biggest cities and to raise the benefit-to-cost ratio of population change more broadly.
Australia’s population is growing at five times the average rate for more developed countries. That’s mainly because of its net (immigration minus emigration) migration rate. For 2010-15 Australia’s net migration rate was the second highest (after Saudi Arabia) in the world for a country with over 10 million population.ABS, Historical Population Statistics
Net overseas migration, currently 240,100 a year, is high compared to historical levels. It is four times the 58,000 “replacement” rate needed to keep our population above the current 25.3 million, assuming the current fertility rate and life expectancy stay the same.
The major elements of net overseas migration are:
temporary migrants who stay in Australia for at least 12 months in a 16-month period, mainly students, working holidaymakers and other work-related temporary visa holders
New Zealand and returning Australian citizens
(minus) permanent and temporary emigrants.
The reduction in the Migration Program ceiling to 160,000 is small relative to the previous 190,000 ceiling. And it’s a tiny cut relative to the 162,417 places actually filled for 2017-18. This reduction may affect the number who stay in Australia on temporary visas (or without any current visa), and will have flow-on effects on births, deaths and emigration.
Bottom line, the reduced ceiling won’t change population growth much.
Adding to pluses, reducing minuses
Well-targeted increases in immigration can raise labour force participation and productivity, slow population ageing and increase per person taxation revenue. This is partly because of the young, working-age profile of new immigrants.
For the same reason, higher immigration, and hence population growth, increases peak-hour transport use in total and per head.
Population growth also adds to need for all sorts of goods and services, including housing, education and water. Larger city size is associated with higher congestion time delay and cost. Other growth-related issues include public transport crowding, increased housing density, house price inflation, concerns about housing quality, school place shortages, and loss of farmland and native biodiversity.
A “best” choice of location to house increased population based on one criterion sometimes can be a “worst” based on another. For example, locating new housing in CBD areas near to opportunities for work, shopping and other activities may be “best” for reducing car use, but “worst” in terms of locally available, affordable sites for new schools with spacious, ground-level playgrounds.
Good population policy should look for “win-win” solutions that take away the minuses of population growth and add to its pluses.
Easing the big city squeeze
In 2018, Sydney, Melbourne and Brisbane combined accounted for 51% of Australia’s population, 67% of population growth and 72% of net overseas migration. ABS mid-range projections show Sydney’s population reaching 9.7 million in 2066, Melbourne’s 10.2 million and Brisbane’s 4.8 million. These are challenging prospects.
Responding to a large majority view, the government’s plan aims to reduce city population growth, congestion and other pressures. It intends to fill job vacancies in regional Australia by settling immigrants there and developing transport and other infrastructure.
The proportion of people in the 55-69 age range is much higher outside the capital cities and in Hobart and Adelaide than in Sydney, Melbourne, Brisbane and Perth. This means Baby Boomer retirements can be expected to result in higher percentages leaving the workforce outside the four largest cities, and a related need to recruit migrant (and Australian resident) replacements for these retiring workers.
Authors: Nick Parr, Professor and Demographer, Macquarie University