Australia’s pro- and anti-population growth advocates seem to be competing with each other to see who can produce the most glib, fact-free piece of propaganda. Dick Smith’s entertaining anti-growth advocacy-doco Dick Smith’s Population Puzzle, screened in the lead-up to the recent federal election, deployed just about every cheap propaganda trick in the book.
Now the Centre for Independent Studies has published an even less substantive pro-growth “policy monograph” by Brown and Hartwich. An op-ed piece by Oliver Marc Hartwich in this morning’s Oz arguably sets a new benchmark in fact-free opinion journalism. As far as I can tell, its entire hypothesis seems to be that Paul Erlich’s doomsday predictions in the 1970s were wrong, and therefore anyone who raises any questions at all about the wisdom of unrestrained population growth is by definition a left wing fool who should be ignored.
The CIS monograph for which Hartwich’s article is a promo isn’t much better. Its entire analysis of the environmental issues surrounding Australia’s future population growth is as follows:
Bernard Salt also dismisses the argument that population growth will be environmentally damaging. Salt maintains that the greater focus on environmental planning means future population growth will damage the environment far less than past population growth. Julie Novak, Research Fellow with the Institute of Public Affairs, says, ‘For many environmentalists, the arguments for a larger population come across as nothing more than some sort of pro-growth corporate conspiracy.’ Columnist Paul Kelly says that setting a ‘carrying capacity’ is an ‘untenable exercise in imposed utopianism,’ while commentators such as The Age journalist Julie Szego suggest that ‘climate change is a red herring in the population debate’ and that arguments against population are a triumph of misanthropic NIMBYism. The debate about population growth looks set to be long-lasting and controversial. But what will the population actually look like?
I’m by no means a supporter of the Dick Smith population doomsday line of argument, but I’d be more likely to be persuaded by the CIS if they had bothered to grapple with questions such as how rapid population growth interacts with the fact that Australia is the driest inhabited continent on earth as well as the most urbanised; that only 10% of our land mass is fertile and arable and that this area (the coastal fringe) is also where everyone wants to live; and that population growth will inevitably make it more difficult for us to achieve any carbon emissions target we might eventually aspire to meet.
However, to me the most cogent arguments that pro-growth advocates need to address (and the CIS doesn’t) are economic rather than environmental ones. As Ross Gittins explained in an article several months ago:
So let’s get both sides out of their corners to debate the issue in front of us. We can’t continue treating the economy like it exists in splendid isolation from the natural environment. Even when you ignore the environmental consequences, the proposition that population growth makes us better off materially isn’t as self-evident as most business people, economists and politicians want us to accept. Business people like high immigration because it gives them an ever-growing market to sell to and profit from. But what’s convenient for business is not necessarily good for the economy.
Since self-interest is no crime in conventional economics, the advocates of immigration need to answer the question: what’s in it for us? A bigger population undoubtedly leads to a bigger economy (as measured by the nation’s production of goods and services, which is also the nation’s income), but it leaves people better off in narrow material terms only if it leads to higher national income per person.
So does it? The most recent study by the Productivity Commission found an increase in skilled migration led to only a minor increase in income per person, far less than could be gained from measures to increase the productivity of the workforce.
What’s more, it found the gains actually went to the immigrants, leaving the original inhabitants a fraction worse off. So among business people, economists and politicians there is much blind faith in population growth, a belief in growth for its own sake, not because it makes you and me better off.
Why doesn’t immigration lead to higher living standards? To shortcut the explanation, because each extra immigrant family requires more capital investment to put them at the same standard as the rest of us: homes to live in, machines to work with, hospitals and schools, public transport and so forth.
Little of that extra physical capital and infrastructure is paid for by the immigrants themselves. The rest is paid for by businesses and, particularly, governments. When the infrastructure is provided, taxes and public debt levels rise. When it isn’t provided, the result is declining standards, rising house prices, overcrowding and congestion.
I suspect the punters’ heightened resentment of immigration arises from governments’ failure to keep up with the housing, transport and other infrastructure needs of the much higher numbers of immigrants in recent years.
This failure is explained partly by the rise of Costelloism – the belief all public debt is bad – but mainly because the federal hand has increased immigration while the state hand has failed to increase housing and infrastructure.
The CIS seems to be trying to create the impression that population growth is something we just can’t control and that we should just get used to it:
In the recent federal election, both Labor and the Coalition seemed to suggest that they could—and would—limit population growth, particularly by restricting migration. The Greens went a step further by endorsing a population cap.
But these platitudes overlook a fundamental fact. Under every realistic scenario, Australia’s population is going to keep growing. Australians will also keep getting older— a fact often neglected in the current debate—which will have huge implications for our future policy environment.
Under all but one of the 36 scenarios modelled in this report, Australia’s population will grow. …
No one can know exactly how these variables will change in the future, which means no government can accurately predict what Australia’s population will look like. Population targets are unrealistic. We cannot plan our demographic future.
However, this is a question-begging straw man argument. Almost no-one is advocating no growth at all; the real question is how much growth? Even Dick Smith only advocates reducing migration to 70,000 per year, which is likely on CIS projections to result in a population a bit under 29 million by 2050. Moreover, although we can’t control future population size with precision, we can certainly make policy choices which will directly impact the outcome i.e. not only choices about migration rates but incentives to higher fertility like the baby bonus. There seems little doubt that at least part of the higher Australian birth rate over the last decade is a result of deliberate government policy, not only the baby bonus but more general policy settings seemingly designed as a response to concerns about an ageing population flowing from the Inter-Generational Reports. The approach is colourfully epitomised by Peter Costello’s admonition to have “one for Mum, one for Dad and one for the country”.
Indeed, as far as I can see the possible economic impacts of an ageing population are just about the only strong argument in favour of continuing deliberate rapid population growth. ((In the long term at least. In the short term we don’t have much choice but to continue a fairly large migration program to cope with labour shortages flowing from the minerals boom. Those shortages in turn flow in part from the Howard government’s long term failure to invest enough in education and training. ~ KP)) As the CIS monograph notes in relation to the 2010 Inter-Generational Report:
The IGR projects that the proportion of Australians over the age of 65 will grow to more than 20% of the population in 2050, up from just over 10% now. The proportion of Australians in the labour force will fall, economic growth will slow, and the cost of providing health care and the pension will rise—resulting in a growing fiscal gap where the government’s expenditure will exceed its revenue. By 2050, net debt would be 20% of GDP and rising—an unsustainable arrangement that was recognised as such by the 2007 IGR.
Now there may be cogent arguments that these fears are exaggerated, but I’m assuming for present purposes that they’re justified. However, even if that’s the case, is rapid deliberate population growth the only available sensible solution? Is it a sensible solution at all?
Might we not consider deliberately embracing a significantly older (voluntary) retiring age instead? After all, the traditional retiring/pensionable age of 65 was set at a time when average live expectancy was around 70-75. Nowadays it’s over 80 and likely to be between 85 and 90 by 2050. Moreover most people remain healthy and active through most of those lengthy retirement years. I suggest governments should begin building policy responses based on those facts, and create tax and other incentives for many more people to remain in the workforce on at least a flexible part-time basis until the age of 70 if not 75. I strongly suspect that enough people would take up the option to work for a few more years so that inter-generational pressure on the budget bottom line would cease to be an issue.