Population consumes growth performance

AT last. Australia is out of recession. “What?” I hear you ask, “I thought Australia had escaped the recession.”

Not so. Those eagerly awaited National Account or GDP figures which came out this week do not tell the fully story. And, incidentally, this is the 50th anniversary of the publication of those figures.

Australia has been in recession since about mid-2008, but the economists will not tell you that.

You see, the GDP figures add up national income and determine whether the economy has expanded or contracted. But they do not account for population growth. In the past year population growth has been greater than the growth in the economy. So income per head has gone down, not up as the Government and economists would mislead you into believing. Now you know why you have been feeling the pinch.

I hasten to add that this is not the Australian Bureau of Statistics’ fault. It just produces the figures. Unfortunately, it cannot do everything at once. The national account figure is seen to be more important than the income-per-head figure so is done first.

But you can do back-of-the-envelope figures. The population is growing at an astonishing 1.9 per cent – at poverty-causing Third World rates. But between mid last year and now, the economy as a whole was growing at less than that rate. So we were going backwards. It is now growing at an annual rate of 2.4 per cent, just ahead of population.

And even then, GDP on its own is not a good measure of human well-being. Yet every quarter the government, the economists, business and financial journalists gather round like supplicants waiting for the statue of the Virgin Mary to shed tears of blood and announce, “We are saved. We are saved. The economy has grown.”

But population growth always takes some, and sometimes takes all, of the growth. Moreover, there are obvious costs to higher population which far outweigh any benefits.

Higher costs of water (witness this week’s Cotter Dam cost); land (witness the unaffordability of housing); longer commuting times; infrastructure costs or infrastructure degradation if the money is not spent; and extra competition for space in cities and wild places.

Despite the costs to the many and the unpopularity of high immigration, governments of both complexion continue it.

Immigration is at record highs. It has more than doubled in the past 10 years to more than 200,000 a year (if you count New Zealanders), plus another 650,000 or so on work, holiday and student visas – many of whom will want to stay permanently.

Why is this policy continuing without much debate, and to the obvious detriment of the existing population?

Beware bipartisanship. The major parties are heavily funded and influenced by interest groups who profit from high immigration to the detriment of the general population.

They are also lobbied by industry groups who may not give donations but who act, quite reasonably, in the interests of their members (some of whom might). And this is very often is not in the interests of the whole population. When, for example, has the Housing Industry Association ever say that high population growth should be curtailed because it is one of the obvious causes of poor housing affordability? Rather it argues for policies that will profit its members. Similarly for any number of industries.

The only way to stop this bipartisan folly is to restrict the big bucks from the big end of town going into political parties’ coffers and also to do what President Obama has done: require that all submissions made by lobbyists and industry groups to be made public.

Political parties don’t do any focus groups on population policy, like they do in so many other areas. They ignore the voters’ views of perhaps the nation’s most important policy. The only time it has been mentioned by a major party was when the Howard Government wanted to exploit a few refugees all the while allowing hundreds of thousands of immigrants in.

It is not racist to seek a sane population policy for Australia. Let’s cut employment immigration deeply and double our refugee intake of about 13,500 and have none with white faces – except, perhaps, those escaping racism in Zimbabwe.

We should have a population policy that aims at improving well-being not impairing it.

You can call this a folly. Historian Barbara Tuchman in her splendid book The March of Folly, laid down the characteristics of political folly (as distinct from misfortune): pursuing a destructive policy, which is known to be destructive at the time, against which many had cautioned, and for which there was a reasonable alternative. History is replete with them.

Australia will bitterly regret this immigration surge. It is adding to or causing nearly every policy woe we have: water shortage; agricultural land being consumed by urban sprawl; congestion; high house prices; climate change; destruction of habitat including the great barrier reef; strains in public education and health; higher food costs and so on and on.

For 50 years now we have foolishly looked to the National Account figures as a measure of our well-being. It is not the ABS’s fault. It does measurements for well-being, but they are practically ignored by government, economists and political journalists.

We need a measure that takes into consideration things like commuting time; costs of water and energy; access to health and education; housing costs and so on.

What is the point of extra income if it takes longer to commute to earn it; causes higher food, water and energy costs and living costs generally?

We are adding one person to Australia’s population every 1 minute 24 seconds. Ten years ago the estimate was we would hit 23 million by 2021. We are almost there 12 years early. Immigration is causing 60 per cent of the increase.

But if you add all those people, total GDP is more likely to increase avoiding a technical recession. And the Treasurer and all the foolish financial commentators cheer. Pity, though, that most of the individuals comprising the ever-growing aggregate will be worse off while a few at the top can escape the degradation.
First published in The Canberra Times. 05 September 2009.

8 thoughts on “Population consumes growth performance”

  1. I stumbled on this piece as I was browsing for historical infleunce on population growth on GDP. Its one of the few articles supported by numbers which goes the other way around in claiming that population growth or rather immigration is in fact degrading quality of life and per capita. My view – this holds true in short term and given the recession possibly in the medium term. But definetely not true in the long term. Population growth in one of the major drivers for economic growth (historically true as well). As any immigrant family will tell you it takes them a good 5-10 years to settle in before adding any value to the society besides earning livelihood. American economy has time and again proved that with right set of fundamental values it really does not matter where people come from. They could be white, black or brown but in an environment that encourages enterprise and is based fair values, anyone can excel.

  2. Thank you Crispin for this enlightened view.
    I was astounded to hear Kevin Rudd welcome a “big Australia” etc, etc and wrote to him and my local MHR to say so. As you rightly say, the media push the line of more, more, more without thinking of the consequences or making much space for the alternative of a sustainable society that is more generous to refugees, but within a sane population policy. We could start by removing bribes to have children, for example. and as you suggest, limiting business migration.

    When growth in the body is out of control, we call it cancer. Until we replace ‘growth’ as our guiding principle with ‘healing’ the planet, we are heading where the Club of Rome accurately warned we would years ago.

  3. Hello Crispin,

    I am writing to express my happiness in reading your article of the above title in the Canberra Times on 5 September 2009.

    The issue of rapid population growth has been troubling me since the beginning of last year. I have written many letters to politicians concerning the stupidity of such rapid population growth for many of the same reasons you listed. I was even lucky enough for one of them to agree to meet with me (Bob McMullan). However, if they do respond they don’t see population growth as a contributor to any of our problems.

    To me it is commonsense and I am deeply depressed by the lack of action of our elected representatives to carry out the wishes of those who have elected them.

    Thanks again for comforting my in the knowledge that there are others that think like me.

    You may be interested in a lobby group I am a member. Sustainable Population Australia http://www.population.org.au.

  4. This is one of the best articles I have read for some time, and I entirely agree with it. You are calling a spade a spade and get to the root of the problem, explaining the implications and consequences of our ill-considered immigration policy in a very clear and understandable manner. This article should be included not only in the Canberra Times but in every Australian newspaper to make people becoming aware of this problem. I wonder what our green parties or Australian groups for population stability do about it.

    I think ‘donations’ to political parties should be entirely banned by law, since the givers often expect something in return for their money, to their own benefit but mostly to the disadvantage of almost the whole population. Instead, all political parties should get sufficient public funds for their requirements, generous enough not to tempt them to look for other sources. This would probably be a far better solution.

    The high immigration intake already causes problems for our city Canberra as well in terms of water scarcity, denser traffic with more pollution, fewer car parks, decreasing green spaces including lakeshores, etc. Because of this, I have submitted some comments online to the Canberra Times but have no hope of improving the situation by myself. Shouldn’t at least our Green party act on our behalf?

    In this context, I am mostly concerned about the high population growth on our planet, as mentioned on my website http://www.big-ideas.com.au. Politicians and other people in power seem not to care. Why have we to grow at ANY price? Why is the economy the only yardstick and not also other aspects of quality of life for the people? What kind of world are we going to leave to our descendants? It is high time that not only the economists but also the ecologists have a say in forming the world we live in.

  5. Thanks for continuing to write on this seemingly untouchable topic. I particularly agreed with the last line.

  6. Excellent article; it should also be realisd that the ONLY reason that the robber Banks are surviving is that they are continuing the theft of billions of dollars from the million or so homebuyers who have purchased homes at around $200,000 above their real value over the past few years; gross migration has driven the problem.

    The above continues to provide the banks with twice the interest income they would normally earn ONLY BECAUSE the poor home-buyer bastards cannot return the keys and walk away; In Australia, the debt follows them and the government receives 30% 0f these profits -of-theft. The ONLY fix is to provide retrospective legislation so that this continuing robbery is stopped and the Bank’s shareholders made to pick up the tab, after the Eecutives are prosecuted/jailed for KNOWINGLY creating the problem in conjunction with the Real Estate industry executives and others in the Finance sector. $200 billion or so is involved in the above mortgage theft; it is “funny money” and must be MUST be removed from the financial system. Billions of REAL dollars will then be returned to thhe economy for the next decade and the asinine stimulus nonsense will STOP. Cutting migration – drastically – will prevent its regeneration and median house prices wil rapidly return to the norm of 3-to-4 times median income.

  7. This is good reporting and it explains why, as one example of inaction on non-sustainable migration, there is a chronic housing shortage of affordable housing in Australia. The Government appears happy with this equation as it creates demand and drives housing construction and the former sustains jobs and consumer demand which gives them a perception that the are good economic managers. The badly managed consequences are the fact that Australia’s water resources cannot cater for the exising populace let alone the 200,000 plus new residents we have to provide for every year. The stimulus money should have been allocated solely to improving our water resources. Spending money on school halls can hardly be classed as infrastructure spending and it will provide little dividend for the future compared with what could have been provided if it was spent on water projects. Now we have the Government committing to spending $43billion on the NBN that will benefit very few but the rest of us will have to pay for it. They have blown a second chance to create water security for Australia in this decision. In the ACT we have a situation where ActewAGL have lost $60 million plus in playing around with TransACT Communications when they should have been building another dam. In the meantime, the ACT Government tells us to install domestic water tanks which is what the pioneers in Australia had to do because they did not have any choice. We are really living in the smart country aren’t we?

  8. A brilliant piece of analysis of the short sighted policies that are digging us, future generations and the environment into a mess. As Barney Foran once observed, sustainability requires a stable population with roughly uniform age distribution. The economic arguments for boosting population have the same logic as a Ponzi scheme. Why aren’t other reporters asking the hard questions of the pollies?

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