16 September 2011

A ‘big Australia’ won’t mean more wealth for its residents.

While it is generally true that a bigger population translates into a bigger economy or GDP, it is not always true that it translates into bigger GDP per capita, or individual wealth. The Productivity Commission’s report in April 2006 showed Australians’ growth in per capita income would be negligible, a mere 0.06 per cent higher, if we had 50 per cent higher skilled immigration over the next 20 years. Income, of course, is only one factor that contributes to living standards. The Commission said there would be environmental costs of higher immigration including air, river and ocean pollution, land degradation, increased use of natural resources and water, biodiversity loss, and increased congestion of roads and public transport.

While housing unaffordability has been mentioned in the current population debate, solutions have focused on increasing supply.  The growing gap between supply and demand, however, is alarming and distressing, manifesting itself not only in increased homelessness, but keeping even many middle-class people out of the housing market.  According to the federal government’s National Housing Supply Council, the supply-demand gap increased to 178,400 homes in the 12 months to June 2009, up from 99,500 for the previous 12 months.  It says the number of homes in Australia will need to increase by a third in just 20 years to keep pace with demand. Were demand to ease, however, through lower immigration and dropping the baby bonus (it has contributed to our fertility rate lifting from 1.7 to 2.0) then closing the gap would be easier.

But while housing unaffordability is a major issue for many, there are more profound issues affecting the debate. Advocates of a big Australia assume it will all be business-as-usual in coming decades with a stable climate and adequate supplies of fossil fuels that underpin our whole industrialised economy. If only it were true.

Let’s start with climate change.  Earlier this month, a global analysis of national pledges, the Climate Interactive Scoreboard, found that the world is heading for an average temperature rise of nearly four degrees.  It will mean none of Australia, except the far north and Tasmania, will be able to support significant crop production because of heat waves and declining rainfall. Will we be able to feed our current population, let alone twice as many? Strong storms will increase with intense cyclones hitting further south, putting Sydney at risk. Four degrees will set off irreversible melting of Greenland and Antarctic ice-caps leading to flooding of all capital cities in Australia except Canberra. But what if the international community finally galvanises into action to prevent such a scenario and puts a price on carbon that effectively stops the building of all new coal power stations? What will that do to our coal exports? What will that do to our economy?

And then there’s peak oil. In April, the United States military warned that surplus oil production capacity could disappear by 2012 and there could be serious shortages by 2015 with a significant economic and political effect.  The Joint Operating Environment report from the US Joint Forces Command said that, by 2015, the shortfall in output could reach nearly 10 million barrels a day. Advocates of economic growth should heed its warning about such a shortfall: “… it surely would reduce the prospects for growth in both the developing and developed worlds. Such an economic slowdown would … perhaps have serious economic impacts on both China and India.” Will China be able to afford our mineral resources in the future? If not, what will that do to our economy?

By all means, continue the population debate, but let’s set it in its proper context.Jenny Goldie is a delegate of Sustainable Population Australia Inc to the United Nations Framework Convention on Climate Change and is vice-president of ACT Peak Oil.

Scroll to Top