“Congestion busting” just got harder: Scott Morrison accelerates population rush

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Stephen Saunders believes that we need to start a conversation about our ever-growing population.

THE ELECTION OFFERED no respite from Australia’s radical immigration economy. We could crank it up higher, under the Coalition. Even more so, via Labor.

In 2017 and 2018, net migration clocked about 240,000. The Budget grows that by 30,000. But permanent migration drops by 30,000. How good are bridging visas?  

The long haul is real news. Only once since Federation has Australia surpassed 270,000 net migration. Before 2007, even 200,000 was unknown. Why are figures so high? How do they fly so low? Carry on regardless?

High population growth props up GDP growth

Net migration’s a mouthful. It means those arriving in Australia and staying (by whatever visa) for 12 months out of 16, less those (who are resident and) leave for 12 months out of 16.

Yet it best gauges the “mass” of overseas arrivals. Nowadays, net student arrivals swamp net permanents. Also, they swamp net temp-worker plus visitor arrivals. But about half of each year’s permanent-migrant tally is already onshore, on student or other visas.   

In Treasury estimates, net migration plus a natural increase equals population growth. The population’s set to increase by 1.7% in 2019 and 2020. Over 60% is from net migration.

This past decade, population growth underpins more than half real GDP growth. The 2018-19 Budget had 1.6% population growth, for 3% GDP growth. This Budget downgrades the 3% by a quarter. It seeks 1.7% population growth, for 2.75% GDP growth.

Perennially, Treasury forecasts resurgent GDP growth: but that doesn’t happen. More reliably, population growth powers GDP. The Budget doesn’t have to square off infrastructure and service costs of rising population, traditionally state responsibilities. The 2019-20 sweetener was “$100 billion” of “congestion busting” over 10 years.

It’s not enough.   

High migration has a pervasive lobby

New Zealanders debate net migration. Australians contest permanent or temporary migration and small humanitarian intake. Rarely net migration. 

Budgets set the tone. Usually, Budget papers 1-3 mute population. The spotlight is jobs and growth, deficit or surplus. Crucial migration and population “parameters” tiptoe into Appendix A of Budget paper no. 3.

For the Budget 2019-20, Treasurer Josh Frydenberg hyped Morrison’s population plan and its migration “cap” of 160,000. His 270,000 migration sat in its Appendix A.

Labor and the Greens countered, saying that’s no way to bust congestion. What they said was: we’ll see you then we’ll raise you. All the while, the mainstream media recycled the Budget highlights and migration cap. One reporter noticed the net migration blowout, beneath the cap and its “congestion busting” fascinator.

Moreover, left-modernism has made any querying of immigration and population less welcome. Even unprecedented migration has its self-reinforcing cheer squad, including political parties, state and city governments, developers, media, academics and unions.

Disaffected parties if any are the environment (in Australia State of the Environment reports) and the electorate (in repeated surveys).  

High population growth is steered not just “forecast”

Government wouldn’t presume to supervise a natural increase. Anyway, birth rates are low. How does the Government supervise net migration and thereby our turbo-charged (by OECD norms) population growth? 

The current “Appendix A” format debuted 2009. Up to 2017, budget-night estimates (carrying time lags in migration and population data) may be compared with end-of-year outcomes.

Assumed net migration ranges from 175,000 to 246,000. Actuals seesaw between 169,000 and 264,000.  Average annual error of estimates is over 40,000; over 20%. Estimated population growth is 1.5% to 1.8%. Actuals range from 1.4% to 2.0%. Average annual error grazes 0.2%.  

What about budget-night estimates versus end-of-following year outcomes? Assumed migration varies from 180,000 to 250,000. The average error is under 20%. Estimated population growth runs from 1.4% to 1.8%. The average error just tops 0.2%.       

Home Affairs straddles diverse visa categories and applicant queues. It can’t control outward movements. It lacks real-time net migration data. Yet Treasury 12-24 month estimates are landing okay. Short term, migration and population are steered not just “forecast”.

Long term, can we manage the population? At 25 million, we’ve broken the 1998 ABS population forecast for 2051. But those extras didn’t fall like rain. Repeatedly, our sovereign Government has intensified net migration, counting big gains but discounting collateral costs.

Opposition Labor, during the mining boom, acquiesced to a big hike in permanent migration and “457” visas. By way of thanks, the miners gelignited Kevin Rudd’s tax on their super-profits. In a Coalition phase pre-GFC, and Labor-Coalition phase post-GFC, we’ve hugely increased overseas student numbers and deregulated visa pathways, at a cost to systemic quality and local aspirants.   

It’s less that ABS can’t do the math. It's more that government has decisively upped population. Average net migration 2007-2017 — 220,000 plus — is busting twice the quarter-century average to 2006.

With overseas student numbers possibly peaking, how does the Government confect the 270,000 net migration? One opinion rates this as heavily dependent on a strengthening economy, with extra chip-ins required from working holidaymakers, visitors changing status and the new temporary parent visa. So much for the spin, that migration primarily services skills in demand.

Net migration might slump under a significantly weakened economy. But we’ve trumped 170,000 ever since 2006. To shore up the “jobs and growth”, the Government could accelerate visa processing, tweak visa rules or categories, or unleash the parent visas.

Short term, should the Government keep scaling migration cliffs? The 21st Century population surges are political rather than popular. Surfing on immigration, Morrison might yet ballyhoo “30 years of growth”.

The ordinary wage-earners might wonder, did he really burn for us?

Long term, Treasury’s Intergenerational report assumes there'll be 215,000 annual net migration annually. Obediently, today’s “illustrative” ABS projections always assume elevated migration, at 175,000, 225,000 or 275,000. Even under their middle assumptions, the population will top 37 million around 2050.

Sydney and Melbourne might hit about eight million apiece.

If taken as normal, the 37 million skates round unsustainable land clearing, habitat loss, water consumption and uncontrollable greenhouse emissions. Sydney and Melbourne urban plans both work off the eight million. Elitist and “vibrant” mega-city vistas disdain manageable scenarios.   

Forget the Canberra bubble. Consider the population bubble. The longer government inflates it, the more they disregard environment and electors, spruiking implausible infrastructure and decentralisation “catch ups”. That might only perpetuate our houses and holes (consumption and extractive) economy and its iron-coal-and-students trade. Net migration would better serve national — not sectional — interests if managed at its 1980s-1990s levels.    

In conclusion

Net migration, Treasury’s population lever, is moved unobtrusively. Government has more than doubled it. Key political parties take this now as the natural order of things:

  • Traditional “permanent migration” is increasingly subverted by temporary visas seeking to flip. More than ever, the net is the reputable migration gauge.
  • Were the net the cynosure of migration policy, we might better perceive the frequent impacts of self-regarding (government, business or community) immigration ploys.
  • Treasury’s ever-steeper migration assumptions scaffold the required “GDP growth”. Sidelining environmental cautions, our ratcheting population chases a sputtering GDP.  
  • Treasury’s 2019 and 2020 assumptions would push migration past 270,000, a high exceeded once only, and population growth to about 1.7%, last observed 2013.    
  • In the opinion of incoming Labor leader Anthony Albanese, people build their way out of the extra-urban congestion, inevitably arising from these population surges. His opponent thinks likewise.

Stephen Saunders is a former public servant, consultant and Canberra Times reviewer. His report for the Australian Population Research Institute is ‘Why do we have a big Australia?’

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