No correlation between population growth and per capita GNP (Jan)

19 January 2006

Media Releases 2006

The Productivity Commission has discovered what all competent analysts have

known for years, namely, that there is little if any correlation between increased

population growth and growth of per capita GNP, according to Sustainable

Population Australia inc. (SPA).

The Productivity Commission’s draft report on the Economic Impacts of Migration

and Population Growth was released this week.

National vice-president of SPA, Dr John Coulter, says that politicians of both major

parties also have understood there is little or no correlation but have lied about it for


“Analysis of OECD data has consistently shown that there is no correlation between

either population size or population growth rate on the one hand, and growth of per

capita GDP on the other,” says Dr Coulter.

“Analysis of similar data for the eight Australian States and Territories has regularly

shown the same lack of correlation. These analyses have been available for years

but have been denied and suppressed to serve selfish ends,” he says.

Dr Coulter claims that beyond that the Productivity Commission Report is flawed.

“It claims the effect of increased migration to be economically ‘benign’ yet its model

predicts small increases in per capita income accompanied by much larger increases

in average hours worked. This indicates a fall in quality of life for average Australians.

”More importantly, there are much deeper deficiencies in the Report. In a single line

the 349-page report alludes to significant defects in GNP as a measure but then

proceeds to ignore these defects,” Dr Coulter says.

“Both GNP and GDP count many costs as benefits adding them to the index rather

than subtracting them. The report draws attention to the increased population adding

to congestion and pollution but fails to recognise that the costs of ameliorating these

adverse effects will appear in the national accounts as additions to, rather than

subtractions from, GNP and GDP.”

Dr Coulter says that as these costs loom larger as a component of GDP the contrast

between this index purporting to show an improvement in ‘standard of living’ and the

recognition that quality of life is actually deteriorating will become more stark.

“There are already many studies showing that since the mid 70s there has been a

growing divide between an increasing GDP and a falling quality of life but the

Commission seems ignorant of this work. It is very likely that had the environmental

penalties of increased population been properly costed by the Commission and

subtracted from the predicted GNP, it would have discovered that this corrected GNP

would fall and the economic effect would not be ‘benign’”, he says.

Dr Coulter believes it is time for governments and oppositions to actively pursue an

environmentally sustainable quality of life for Australians.

“Pursuing further increases in population, either through stimulating a higher fertility

rate or by immigration, runs counter to this aim” he says.

“At the very least the Productivity Commission Report shows clearly that it is

overdue for governments and oppositions to openly acknowledge that

pursuing higher immigration doesn’t even benefit the economic welfare of


Further information: John Coulter  08 8388 2153


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