Let states take tax to fund future for growing population

Only by giving states and territories more power to raise revenue to service the future mega-cities of Sydney and Melbourne, whose populations are anticipated to hit seven million by mid-century, can the nation maintain its high standard of living, warns population expert Glenn Withers.

The change could do even more, reaping Australia a $60 billion annual windfall in the long run, says Professor Withers, an immigration economist who believes the nation has the carrying capacity to sustain a much bigger population.

“If we reform our federation such that states and territories are responsible for raising the money they spend . . . we would be much better off in being able to provide the infrastructure needed to support the population of the future,” Professor Withers told The Australian.

“As an example, the commonwealth determines immigration levels but the states have to provide them with infrastructure and services. We need to improve our federation, including how we share responsibility for population growth and its impact on social and economic activity.”

In the two months since Wayne Swan confirmed that Treasury’s as yet unpublished third Intergenerational Report predicted Australia’s population would reach 35 million by 2050 on the back of recovering fertility rates and big migration numbers, debate has raged about the nation’s optimal population – an argument that cuts across the political divide.

Kevin Rudd made it clear his government’s policy would embrace a high-population agenda. “I believe in a big Australia,” the Prime Minister told the Business Council of Australia in October.

“This is good for our national security; good for our long-term prosperity; good in enhancing our role in the region and the world. The time to prepare for this Big Australia is now.”

However, Mr Rudd’s own backbencher Kelvin Thomson, believes a population of 35 million is unsustainable and should be restricted to about 26 million by 2050. Australia’s current population is estimated at 22,093,000.??

“Another 14 million people will not give us a richer country; it will spread our mineral wealth more thinly and give us a poorer one,” Mr Thomson said. “It will make a mockery of our obligation to pass on to our children . . . a world in as good a condition as the one our parents and grandparents gave to us.”??

Kevin Andrews, straying out of his recently acquired opposition portfolio of families, has called for a debate on the migration rate, saying immigration could be slashed from the current 180,000 a year to 35,000 to keep Australia’s population as it is now.??

“If you look at the 2008 data, you would need about 35,000 immigrants on top of births to replace the population (for that year),” he said this month. “So I say the starting point should be replacement levels of population, then ask what additional population we need so the country can be economically and otherwise sustainable and growing.”??

Demographer Bob Birrell is also calling for the population to be stabilised at current levels. And organisations such as Sustainable Population Australia are expanding with their low population message.??

“Realistically we should be looking to stabilise our population as soon as possible,” said Professor Birrell, of Monash University’s Centre for Population and Urban Research.??

“There are a number of reasons, but my most profound concern is that with such a heavy reliance on migration, particularly skilled migrants, to build the population, what does it do for domestic workers???

“My view is that the government has done very little to train domestic students because it can rely heavily on migrants with degree qualifications.??

“Also our urban quality of life will be threatened as we deal with so many more people. There are major diseconomies of scale as newcomers settle in big numbers on the outer periphery of the cities, including the provision of transport, power, water. The problems of providing road and rail for this looming population are enormous.”??

Professor Birrell said a population of 35 million was incompatible with the government’s goal of cutting greenhouse emissions by 60 per cent of 2000 levels by 2050. “Our emissions per head in 2000 were 28.8 tonnes, and to reach the government’s target in 2050 with a 35 million population, emissions per capita would have to drop to 6.3 tonnes, which is inconceivable,” he said.??

Professor Withers said a bigger population could be accommodated in Australia, but the growth must be carefully managed to “properly balance economic, social and environmental effects”. Immigration was the main variable.?