Population projection not so simple

by Crispin Hull on October 3, 2009

JOURNALISTS are a fairly innumerate lot. Many are, bizarrely, quite proud of it.

It is a dangerous state of affairs because it means they swallow virtually any set of figures without question.

Perhaps the only thing more dangerous is when someone in power does the same thing. And so it was a couple of weeks ago when Treasurer Wayne Swan launched the Australian Institute for Population Ageing Research.

He said, “The Intergenerational Report projects Australia’s population will grow by 65 per cent to reach over 35 million people in 2049, up from around 21 and a half million people now.

“This projection of 35 million people is significantly higher than the previous IGR projection of 28.5 million in 2047. The difference is largely driven by a greater number of women of childbearing age, higher fertility rates, and increased net overseas migration.”

Those figures are not in accord with the underlying facts and simply do not add up. It appears that either the Intergenerational Report or Swan or both do not understand the nature of compounding growth in population.

The Australian Bureau of Statistics tells us that population is now 21.8 million and growing at 1.9 per cent a year – next year that will mean an additional 410,000 people. Sure, you can add 410,000 people times 40 years to get a population in 2049 of 38.2 million. But that is not how compounding growth works.

The people who are added to the population each year are not all sterile. They, too, reproduce – most likely at a faster rate than the existing population because they are new-borns or migrants with a younger age profile than the existing population.

You have to also project the 1.9 per cent growth on the extra growth each year. It is a simple formula that you can rip through an Excel spreadsheet. Next year, we get to 22.21 million. The year after we get to 22.64 million (not 22.62 million on the Swan scale). And by Year 40 (2049) we get to 46.28, not 38.2 million on the simple Swan scale, and certainly not the 35 million on the Ingeneration outfit’s projection.

The Excel spreadsheet is here.

To have 46.28 million people in Australia would be calamitous. We would have to import food, and maybe even water, or desalinate it at vast cost. Also bear in mind, the 46.28 million is likely at the low end because the new people are likely to grow at more than 1.9 per cent and life expectancy will probably rise.

If the growth rate goes to 2 per cent we will have more than 50 million people by 2050.

The Government’s attitude to population in Australia is a classic example of a failure to see the obvious; of continuing with existing policy despite all the evidence that it is dangerous; blindness to facts; and refusal to reappraise.

These are common idiocies of government. Unfortunately, it takes a long time for a groundswell of ordinary people to force change. Analogies abound. Vietnam is a good one.

For decades, bureaucracies, the military and the elected representatives and executive in the US and Australia followed utterly deluded policies against morality and good sense in Vietnam. The continuation of present population and immigration policies of Australia has all of the signs of the wooden-headed, straight-jacketed blindness of the Vietnam fiasco.

Orwell got it right. Australia’s population policy (or non-policy) is like “Crimestop” in 1984:

“CRIMESTOP means the faculty of stopping short, as though by instinct, at the threshold of any dangerous thought. It includes the power of not grasping analogies, of failing to perceive logical errors, of misunderstanding the simplest arguments if they are inimical to [orthodoxy], and of being bored or repelled by any train of thought which [challenges orthodoxy].”

The facts are now plain: the immigration policy of the Hawke-Howard-Rudd governance will result in Australian having a lower, not higher standard of living. Yes, migration enriched Australia between 1945 and, say, 1985. But the optimum has been well and truly reached.

If a Treasurer glibly accepts the gross under-estimation of the exponential problem, we are in real trouble.

Swan said, “Population ageing is among Australia’s most important long-term economic and social challenges.”

Wrong. Population ageing is not the problem. It is the raw numbers that matter. People are working and contributing longer as longevity increases. People only become dependent and health-resource-draining in the last few months of their lives whether they are 40, 60 or 90. They don’t automatically become dependent and health-resource draining when they hit 60 or 65.

The ageing population is no excuse for increasing immigration. Immigrants get old, too.

The idea of an Australian Institute for Population Ageing Research is too restrictive. Why not remove the word “Ageing” and have an institute for pure population research? – Because that would require going beyond CRIMESTOP. It would require intelligence and open-mindedness – all the things government seems so often incapable of.

For a start we must shake up the Australian Bureau of Statistics. Months after month, quarter after quarter, the ABS puts out statistics, regurgitated by the media, which do not portray a true picture. Few of the statistical series are adjusted for population growth. We imagine we are better off when GDP rises, but after adjustment for population we are either worse off or not so well off.

The ABS produces statistics seasonally adjusted and adjusted for inflation. Why can’t they produce all their figures adjusted for population, so that all of the statistics are per head, not aggregated. If car sales or retail are notionally up overall, they may in fact be down unless the rise is greater than the population increase.

We are deluding ourselves when we look at growth figures. After adjustment for population growth and attendant environmental costs and costs for increased infrastructure the notional increase in GDP is far outstripped and we are worse off – except, of course, those lucky few in the elite of businesses of flogging stuff to people whose “market” increases.

The Institute for Population Ageing Research should remove the word “ageing” and tell Australians the real costs of successive governments’ high population polices. And governments that did not respond would be turfed out – Liberal or Labor.

As with Vietnam it is going to take a fair amount of people power to turn this idiocy around.

In the same breath as accepting continued high immigration and population growth, Swan said, “The Rudd Government is committed to tackling the hard reform challenges so we can build sustainable long-term prosperity for the future.”

Poppycock. It is only interested in short-term re-election prospects and pandering to big business.
— CRISPIN HULL

This article first appreared in The Canberra Times on 03 October 2009

Popn projections.pdf

{ 6 comments… read them below or add one }

Sandra Kanck 10.03.09 at 11:31 am

Thank goodness there is at least one journalist who understands maths! Wonderful article Crispin – it deserves much wider distribution than just the Canberra Times.

Tom Gosling 10.03.09 at 11:49 am

Crispin is the first journalist in Australia to question Swan’s projecton of 35 million by 2050 – it is just astounding that every other media outlet in Australia has regurgitated it without even attempting to do the sums!

The article nails is spot on in its analysis of ageing and its suggestions for the Institute to be renamed and the ABS to issue more per capita information, and it’s good to see the compounding growth issue explained in detail – let’s hope someone in Treasury can use Excel!

However the figure of 1.9% quoted by Crispin has been superceded. The Bureau itself issued a press release on 22 September stating that “Australia’s population increased by 2.1% for the year ending March 2009”.

By the way, congratulations everybody, our population has now passed 22 million – interestingly the bureau did not issue a press release about that – instead someting about opening a new office in Darwin!

Colin Samundsett 10.03.09 at 4:39 pm

Crispin, I confess: “Stop Laughing, This is Serious!” and I should, but am caught up in the absurd; like Stan Smith’s lower man of the two in his 1933 cartoon, laughing at the ridiculous as his life-support stretches to its limit.
The ridiculous lies in the avoidance, by those with power over society’s direction, of realities; that those realities, so adequately expressed in articles such as this one of yours, continue to be denied. And why they continue to be denied.
Malcolm Fraser thought he knew. Early-on as Prime Minister he stated that people could now turn straight to the sport pages. He had come to power on the basis of the homily that all evils come from Canberra – and an assurance of no more fire out of that dragon. To his eventual distress he found that it was not forever that the public could live by sports pages alone.
Since then, for the needs of people wanting more than sports pages, “think tanks” came into being. With few exceptions they provided in-depth indoctrination biased to benefit the big end of town. So much so that The Australia Institute launched itself (1994) to provide data and comment based on scholarship and integrity. Its frank independent publications cause heartburn to most of the power-crazed of our society. Unfortunately, they have small audience – as do similar frank, fearless and informative magazines such as Dissent.
Now WWW is all the go and Crispin’s, rising above much chaff, is a delight. I appreciate the comment about ABS providing data in a manner which could easily mislead – providing some solace to current Governments’ apparent efforts to misinform.
The Housing and Property industries might be pleased with deviant figures. In statements made within those industries a year or so ago, there was ready admittance that the then high rate of immigration was a foundation stone for them. John Howard lauded the rise of property values which accompanied the high rate of population increase, of which a major part was immigration (the house-affording affluent preferred, the needy deterred). House prices rose astronomically. Great for those who have no debts outstanding on them, desperately crook for others. Nothing much has changed: Alan Kohler (ABC TV second Oct 09) noted Aussie house prices had increased 6.6 per cent this year; Michelle Singer (Fin Review Oct 2-4) wrote “property prices have increased, on average, at a rate of 1 per cent a month since January.” And that is after the economic downturn of 2008.
Yes, fostering population increase at the rate of a million in less than three years – a benefit to Australia? Laughing- if you can – is better than crying.
Colin

Serious 10.03.09 at 6:10 pm

Where is the concerted campaign from the “fourth estate” to bring to account the government and the twisted output of the ABS? Following Crispin’s maths, I’d suggest there may be a decimal point and a few zero’s in front of the “fourth” if this is the first article published in the press on this matter. And where are the similar campaigns on other examples of “massaged” ABS data? Great article, thanks.

Jenny Goldie 10.04.09 at 12:02 pm

Excellent article thanks, Crispin, especially for refuting that high immigration is needed to counter ageing. Every demographer I have spoken to says immigration can only help ageing when it gets to very high levels, say twice what it is now. And thanks for pointing out that the health costs come in the last few months – up to two years – of a person’s life, as was the case with my parents and their siblings. To Jack Waterford who put an opposing point of view, I say: if you must accept GDP as a measure of well-being, then surely it is GDP per capita and not total GDP. Of course population growth will lift total GDP but that is not the point. If population growth rates – ours are now 2.1 per cent – exceed economic growth rates, then well-being goes backwards.

Bill 10.07.09 at 4:18 pm

An important matter, well described including ensuing consequences from our short-sighted immigration policy. I concur entirely and have nothing to add to the content. I believe that such an article is too valuable for only to confine it to a local newspaper. It should be distributed everywhere in order to make people aware of the disadvantages they have to expect from the coming population explosion in Australia (which would only benefit of a few groups).

I don’t think that our current government has a mandate to ramp up our immigration that much (when people wake up, there could be an election backlash). Since the whole Australian population will be affected, there should be a referendum, carried out about this matter, with clear independent information about the consequences.

If – in this context – our government wants to save on welfare including age pension costs, it makes sense to give more weight to PREVENTION of diseases instead of only concentrating on their treatment (after the horse has bolted), e.g. by banning junk food ads entirely, by encouraging people to lead a healthy lifestyle, also to be taught in schools, and by giving every household a free health info brochure. This could save many billions per year alone in the health sector.
Bill

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