The hidden costs

HAMISH BURNS is financial analyst, and member of Sustainable Population Australia. 

THE 2020/21 Federal budget has predicted a sharp fall in net overseas migration over the net few years.

The news was greeted with doom and gloom by politicians, media and economists.  

Australian National University’s Liz Allen is irate: “This is a demographic disaster, leading to declining socioeconomic well-being.” 

This economic dogma that “population growth is good for the economy” is flawed.

There is rarely mention of the social or economic costs associated with an ever-increasing population: more infrastructure costs, congestion, increased pollution, and pressure on housing affordability. Treasury remains fixated on tax revenue, while the significant costs and negative impacts are overlooked.

Each citizen is not merely a taxpayer, but also a recipient of public services.

Research from Queensland Uni calculates each extra person costs more than $100,000 in public money to expand the capacity of our infrastructure and public facilities like schools, hospitals and police stations.  

Infrastructure Australia has even larger cost estimates; the public infrastructure to keep up with Australia’s population growth is $40 billion annually, excluding additional requirements such as education, healthcare, policing etc. 

Water desalination plants exemplify this hidden cost. A collective price tag over $10b since 2006 in construction costs, plus huge operating costs and CO2 emissions.

Costly, polluting desalination plants could have been averted, if Australia planned a more sustainable population trajectory. 

Perth’s two plants supply about 30 per cent of the water supply. But further expansion is now required to keep pace with the city’s breakneck population growth – approaching 2.1m.  

Moving to international comparisons, if a smaller, stable population really is a “demographic disaster”, then Norway (5.4 million, 0.7 per cent growth) must really be going it tough, without the population magic pudding.  

However, through modest growth, Norway has spread its significant mineral wealth over a smaller base, and enjoys a high standard of living, free education, and one of the largest sovereign wealth funds in the world (over $1 trillion).

Japan is always depicted as an economic basket case with its declining, ageing population, which has declined slightly (0.2 per cent annually in past decade).

However, by almost any standard, it is doing very well. Unemployment is just 3 per cent (up from 2.3 per cent pre-Covid).

Japan has stable house prices, low crime rates, and falling CO2 emissions. Hardly a “demographic disaster”.    

Australia’s population has exploded since 2000 (increased by 34 per cent, or 6.5 million residents). Average growth in the past decade is 1.7 per cent per annum; three time higher than the OECD average.

If we return to our pre-Covid levels of population growth, by 2050 we might achieve the prosperity of Algeria (population 44 million, 1.7 per cent growth rate).

The ‘Big Australia’ dream realised.

We face an unemployment crisis. 

In September, unemployment was 6.9 per cent under the generous ABS definitions, vs 12.9 per cent on Roy Morgan data); this excludes the millions of workers still on Jobkeeper.  

Australia has a shortage of jobs, not “a skills shortage” as claimed by the “Big Australia” lobbyists. Increasing the size of our potential workforce (via immigration) is illogical while unemployment remains high, and wages are forecast to be negative. 

Why do we need to keep growing population so fast? What is the benefit to average Australian? Federal and state governments must reconsider our immigration programme and population growth, and all of the economic, environmental, and social costs involved.

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