High population growth costing us dearly
In 2012, Australia’s population grew by 394,200 at a rate of 1.8 per cent. Net overseas migration (235,900 people) made up 60 per cent of the total and natural increase (158,300 people) 40 per cent. Australia not only has the highest population growth rate of any OECD country, it is three times higher than the OECD average of 0.6 per cent.[i]
SPA National President, Ms Jenny Goldie, says population growth is so rapid that provision of infrastructure is failing to keep up.
“The average life of infrastructure is about 50 years,” says Ms Goldie. “Thus, about two per cent of all infrastructure such as roads, hospitals, schools, electricity supply and so on, must be replaced every year just to maintain the same level of service.
“Australia’s present population growth rate of 1.8% means, however, that we have to spend, not 2.0%, but 3.8% of the capital value of all infrastructure just to maintain the same level of service.”
Ms Goldie says that because this level of spending is not happening, services are falling behind.
“According to Infrastructure Australia, we need to spend $700 billion just to catch up with infrastructure maintenance,” she says.
“Failure to maintain and provide new infrastructure in line with population growth is one of the dominant factors depriving us of adequate aged care, of mental health services, of improved public transport and cheaper water and electricity.
“Every additional person entering Australia costs approximately $200,000 in additional infrastructure[ii]: housing, roads, water, electricity, hospitals and health services, police, education etc.
“This means that the infrastructure cost of Net Overseas Migration (NOM) of 235,900, at $200,000 per person, is $47 billion per year,” Ms Goldie says. “If this amount is not spent on expanding all infrastructure services we suffer a decline in service quality: increasingly congested roads, rising water and electricity bills cuts to health and educational services.”
The Productivity Commission[iii] found little per capita economic benefit arising from immigration and, what there was, flowed mainly to the recent migrants. This was after ignoring all the environmental costs such as traffic congestion on which it said it could not put a value.
“High population growth moves Australia ever further from environmental sustainability. It is making the average Australian poorer and that of future Australians much, much poorer,” says Ms Goldie.
Jenny Goldie 0401 921 453
John Coulter 08 8388 2153
[ii] O’Sullivan, Jane N. “The burden of durable asset acquisition in growing populations”, The Economics of Population Growth. Economic Affairs 2012. Blackwell Publishing, Oxford.
[iii] Productivity commission. Economic Impacts of Migration and Population Growth. Australian Government 2006.