The catchcry of "populate or perish"
has lost its impact as Australia approaches the next century.
The Coalition is grappling with the immigration debate,
and there are growing doubts that a low population can
deliver economic prosperity. PAUL CLEARY and DIANE
A frightening future awaits Australia in the 21st century
as fears of high immigration and related population growth
persist in determining Government policy.
Australia is heading for a small, stable but rapidly
aging population within a generation. And this threatens
to undermine future economic growth and integration with
the Asia-Pacific region.
These fears reach from the Prime Minister, John Howard,
down to the proverbial fish-and-chip shop owner.
They will result in Australia's population stabilising
at around 23 million by around 2020, the over-65 population
doubling to around 20 per cent.
The engine of Australia's economic growth for half a
century will have seized up. At the same time, populations
in Asia will have surged ahead. It's estimated that by
2050, Indonesia's population will be 320 million, up from
194 million. Malaysia, now on par with Australia, should
double to 38 million.
Such an equation suggests Australia's low population
growth presents a huge risk to both economic and security
Australia's looming population slowdown stems from a
birth rate falling below replacement levels and immigration
cutbacks to an effective net intake of 50,000 from net
150,000 in the late 1980s.
It has major implications for sustaining a bright and
vibrant economy. The reality is dawning on Australia business.
The Housing Industry Association represents the sector
which will be hit first and hardest. It now plans a major
research project to examine the impact of immigration
on the economy. The Business Council's Australia 2010
manifesto also underlined the role of immigration in Australia's
development. It states "as a sparsely populated nation,
the size of our population must grow".
But it failed to advocate a target and said further "study
and debate" was needed to determine policy.
Population policy is something that Australia should
be thinking about now. Yet it is amazing that population
as an area of public policy is virtually non-existent.
In the last Budget, the Federal Government axed its only
research arm on this crucial issue, the Bureau of Immigration,
Multicultural and Population Research (BIMPR).
The debate about an appropriate population objective
stretches back to the first settlement. The post-WWI era
Imperial plan to "stock the Dominions" raised the notion
of a 100 million population for Australia.
It was Prime Minister Billy Hughes who voiced the catchcry
"populate or perish" after WWI. And Arthur Calwell as
Immigration Minister made it the mantra of Australia's
post-WWII development program.
There have been numerous population inquiries, from 1975's
National Population Inquiry (the Borrie committee), to
the four Federal Government studies under various guises
since 1990. A common feature of these latter studies is
their reluctance to nominate a population target while
advocating greater population planning.
A 1994 study by the House of Representatives Committee
for Long Term Strategies, chaired by Labor MP Barry Jones,
said that aiming for a population of 50 to 100 million-plus
would be "politically and socially impossible". But it
conceded a 30 to 50 million target could be adopted "with
The executive chairman of IBIS Business Information,
Mr Phil Ruthven, makes the bold prediction that the creation
of a regional government in the Asia-Pacific region, similar
to the European Union, would take population control out
of Australia's hands. And being a member of the most densely
populated region in the world would see Australia accepting
free movement within the region, leading to a population
of around 150 million by the end of the next century.
He argues that Australia could easily accommodate such
a population with environmentally friendly, medium- to
high-density cities of one million to three million at
intervals of 400km around the coast. Cities such as Sydney
would be capped at five million to six million. Ruthven
is not an advocate of higher population. But he says it
will happen because of integration with the region. It
will be similar to the way State governments lost control
of immigration when the Federal Government was created
Australia's own security interest will force acceptance
of a bigger population, he says, because this and our
involvement in a regional government "is the best way
to avoid war". There is also a moral imperative. If Australia
is "fair dinkum about a fair world", he says, it should
accept a higher population density. In Asia, the average
population density is 85 people per square kilometre.
Australia's is just two.
The population debate is skewed towards support for low
population growth - and this is a view that the Coalition
is keen to endorse. Few people, apart from housing groups,
are advocating much higher immigration to lift population
growth. Most Australians seem to believe that huge open
spaces are an integral part of their quality of life.
The Australian capital, Canberra, is symbolic of that.
This city of 306,000 people spans 40km from north to south
and, with eight people per hectare, it has one of the
lowest densities of any city in the world.
Its density is a 10th of European cities - and yet this
doesn't seem to make Canberra a more pleasurable place.
More Australians prefer to fly to Europe for holidays
rather than visit their capital.
The doyen of the low-immigration movement, Professor
Bob Birrell at Monash University's Sociology School, argues
that Australia will have difficulty coping with an increase
of five million people between now and population stabilisation.
Even Birrell concedes, reluctantly and with qualification,
that the population slowdown will have significant implications
for the economy.
He told the Herald there was "no doubt" that a higher
immigrant intake created "extra demand" in the domestic
"The domestic market is important. It's one of those
arguments you can make for immigration, but you'd need
to grow very fast, with major social upheaval to make
it meaningful." And he adds: "One of the stronger arguments
is from the point of view of getting going ... it's a
help to establish in the local market, but what sort of
scale you need with the domestic market is the telling
But drawing on the experience of globalisation, Birrell
and others argue the domestic market is becoming increasingly
less important and that focusing on it is a throwback
to the protected economy of the 1950s. Australian firms
should be looking outside to the fast-growing Asian economies
for their expansion and economies of scale, he says. "The
investment opportunities here have little or nothing to
do with the arrival or more manpower. It's got to do with
external markets," he says.
Professor Bob Gregory, head of Australian National University's
Research School of Social Sciences, says big companies
in Australia with a significant market share must look
outside Australia for their future growth, otherwise they
will have to content themselves with prevailing national
growth rates of 3 per cent-plus.
"For a whole bunch of big companies, their growth potential
is outside the country," he says. But it seems a basic
tenet that the domestic economy will continue to matter,
just as it mattered enormously during the last recession.
The current debate over the economy's slowdown bears
witness to this, notwithstanding the inroads into fast-growing
Professor Steve Dowrick, of the ANU, says there is a
clear link between population growth and economic growth.
"If your population growth increases then the growth rate
of the economy increases in line with that," he says.
He says that 1.5 percentage points of Australia's annual
economic growth rate of about 3.5 per cent was the result
of population growth, and that slower population growth
would lead to a commensurate reduction in economic growth.
A recent paper by Dowrick on demographic change and growth
in the Asia-Pacific region says the transitional effect
of a reduction in birth rates - a sudden demographic change
- produced an increase in per capita income that stemmed
from having a higher working age population.
But Australia is also about to experience a demographic
change that is quite the reverse. The aging of Australia's
population will produce a slowdown in population growth
and a rise in the dependent population from 20 per cent
to almost 40 per cent by the middle of next century.
Professor of Demography at the ANU, Peter McDonald, says
the aging of several European countries is much further
advanced than Australia's. In many, more than 20 per cent
of the population is above the age of 65. They will provide
some real-life examples of the implications of the population
slowdown. Some, such as Germany, are expected to experience
population reductions in the order of 25 per cent.
Already, these countries are being plagued by pathetic
rates of economic growth of around 1 per cent.
McDonald says Australia has avoided the European population
slowdown partly because of more flexible support for working
In Europe, where women have fewer opportunities to work
while raising children, the birth rate has plummetted
in response to around 1.3 children per woman, compared
with 1.9 in Australia.
He says maintaining Australia's high birth rate will
be a real challenge for the future. Support for child
care will be critical.
High immigration is another reason that Australia is
20 years behind Europe in the aging process. So cutbacks,
coupled with retirement of the Baby Boom generation, is
certain to produce an older Australian population.
A drop in the birthrate - a big risk for Australia -
could actually trigger a decline in the population in
the absence of immigration, according to McDonald.
Birrell also concedes that the impact of aging is an
argument for immigration "in a decade or two", but argues
that higher immigration now will only exacerbate the problem.
It's clear that immigration will be a significant part
of Australia's future in the 21st century, whether we
like it or not. Moreover, it appears that the impact on
the economy would not be as bad as most Australians like
Economic research is generally supportive of immigration,
showing that economic growth is boosted while unemployment
Dr Lynne Williams, formerly with the BIMPR and now with
the Productivity Commission, describes immigration as
an "investment". "It costs the Budget at first, but provides
a greater return over time, although the benefit is only
small in any one year," she says.
Migrants create as many jobs as they take, the research
shows. Jobs on the demand-side - making and supplying
food, clothes, homes and other services - outweigh the
supply-side effects of migrants offering their skills
and experience. Migrants also bring large amounts of cash
and assets, especially those participating in the business
Migrant skills and expertise are the keys to improving
the productivity of existing capital, says the former
head of the BIMPR, John Nieuwenhuysen. "The argument lies
in the diversity of people who come, bringing with them
their business acumen, contacts in overseas networks,
investment flows and knowledge of different methods."
Skilled migrants also provide quick relief to shortages
of skilled labour which can not be filled domestically
without years of training. "The big benefit to the economy
is through the flexibility migration gives," he says.
"For Australia to survive in the open market, it also
has to be open to people movements," which includes temporary
movements such as Asian university students and tourists,
many of whom choose to stay on permanently.
Migration does entail building more infrastructure but,
he says, "capital widening is not a swear word, it is
economic activity, it adds to demand".
In the early days of their arrival, migrants face worse
employment prospects than the rest of the community. But
different types of migrants have widely different employment
Those arriving through business migrant programs have
faster success in getting a job, while other migrants
catch up over the longer run, suffering more normal levels
of unemployment. The main inhibitor to job success for
migrants lies in education, according to Andrew Jakubowicz,
Professor of Sociology at the University of Technology,
Refugees have more trouble finding work because of poor
education, the disruption of war or other persecution.
This explains findings from studies of employment history,
based on country-of-origin, which show that Vietnamese
and Lebanese migrants have the highest unemployment rates.
"Employers are neutral to ethnic background, but are
more concerned with educational attainment," Professor
Jakubowicz says. But he notes that geographic location
also plays a part in job-search success.
"Many migrants settle near smoke-stack industries which
are closing down. This coupled with a fractured education
experience combine to produce higher rates of unemployment,"
he says. But migrants create jobs for those already living
here, helping to cut the unemployment rate for those already
residing in Australia.
Migrants can cause some short-term infrastructure bottlenecks.
State governments tend to be responsible for their infrastructure
needs but, in the long run, migrants pay sufficient taxes
to cover the cost, especially where governments save on
education costs because the migrants are already skilled.
Australia can pride itself on having managed a massive
influx of migrants and, despite recent efforts to generate
racial tension, it is without doubt the most successful
melting pot in the world.
The overseas-born population is now 22 per cent, well
ahead of the US with 9 per cent and Canada's 14 per cent.
In Sydney, it's 37 per cent. And it's this experience
that confirms Australia's ability to grow its population
Source: Sydney Morning Herald, 16 November 1996.