By Michael Pascoe
Julia Gillard might claim “we’re better than that”, but there’s nothing like migration or, heaven forbid, boat people to bring out the worst in politicians’ armoury of dissembling, half-truths and spin - on both sides of parliament.
Too bad the realities of the Australian economy are shuffled off to the side as the government and opposition play to the lowest common denominator in the current election campaign. With better leadership, today’s labour force statistics should bring the reality back into focus: we are facing the problems of success again.
With another 45,900 jobs created last month, resulting in 11.1 million Australians in work and the unemployment rate at 5.1 per cent seasonally adjusted, there’s already a shortage of skills in key areas and a looming shortage of labor in general that will have the Reserve Bank’s monetary policy finger itching before the year is out.
We can’t wait for the kiddies christening Julia’s school sheds to grow up super-productive and solve our immediate challenges. Besides, they’ll be too busy paying higher taxes to support the tsunami of retired baby boomers.
Aside from the hardcore Greens wanting to return to a subsistence agrarian lifestyle, as a nation we have a history and culture of wanting to explore and realise our potential, enjoying and sharing the benefits of growth.
Our productive capacity though smashes hard up against the reality of our demographics, never mind the criminal legacy of Labor and Liberal, State and Federal, under-investing in skills and education.
There are the easy examples to point to - the “two-speed economy” bogeyman of the resources industries’ shanghaiing workers from farms and city workshops, the constant pirating of foreign hospitals to staff our own, today’s story of the national broadband network stalled by a lack of skilled workers. (Gee, wonder if they can pick up some former Pink Batts installers...) - but the issue is actually much broader than that.
Political tragedy
The fad to minimise Australia’s population growth immediately threatens to increase inflation and, therefore, interest rates. Most immediately, it would exacerbate the “two-speed economy” effect, damaging non-resources businesses. In the medium term, the tax implications become quite nasty and in the longer term one can wonder about a backwater that artificially restrained itself - potentially an economy like South Africa’s under apartheid.
The current political tragedy is that the Labor and Liberal parties are running away from the great success story of Australian migration. Instead of explaining and championing migration’s crucial contribution to the Australian economy’s long, golden summer of growth, Gillard and Abbott, West and Morrison, by sly deed and innuendo are portraying our raiding of other nations’ investment in people as something thoroughly undesirable; at best a necessary evil that must be as limited as much as possible.
I don’t believe the party leaders and their immigration spokespeople are quite as ignorant as they sound, in which case they are simply duplicitous, saying whatever they think is required to win government. No news in that.
Falsehoods
The cornerstone falsehood in the current denigration of immigration is that the 35 or 36 million people Kevin Rudd referred to actually represents a “Big Australia”. Second to that is the idea that we can’t handle population growth.
KPMG demographer Bernard Salt and Australian Industry Group CEO Heather Riddout combined on a 7.30 Report discussion earlier this year to put those issues in context.
“The forecast population from 22 million to 35 million does represent a 60 per cent increase in population over the next 40 years,” said Salt. “However, over the last 40 years, between 1970 and 2010, the population has increased from 12 million to 22 million which is a 75 per cent increase. So in fact we have been here. We've done it over the last 40 year, that's the big picture perspective.”
The KPMG partner in his newspaper column has suggested the question should first be “how can we grow?” rather than “why should we grow?”. He may have been thinking of that on the 7.30 Report:
“In some respects we would say we were very happy with our society at the moment. We want to keep it as it is and we don't want to compromise our quality of life into the future. The issue there is that a lot of the approaches that we adopted over the last 40 years are not open to us over the next 40 years.
“For example, we are not likely to build new dams or new coal-fired power stations. So if we are to head towards 35 million then we need to change the way we organise society. Maybe it will be necessary for every household in Melbourne and Sydney and Brisbane to have their own water tank. Maybe every household will have a solar panel to make a contribution to the power grid.”
Challenge of aging
Riddout honed in on the challenge of Australia aging:
“We have about 870,000 or so people over 80 in Australia at the moment. By the year 2050, we'll have 2.7 million Australians over the age of 80 on current projections. Think of this: the next apology to Australians will be made to people in nursing homes if we don't match this age care issue very carefully.”
Riddout says we’re going to halve the current dependency ratio - the proportion of the population in the workforce. Without strong immigration, current school children and Gen Y will have to come to terms with a tax burden that no politician wants to face. Much of the Henry tax review – the vast majority of it that was dumped by the government - was an attempt to come to terms with those demographics.
Salt has written that Australia faces a choice between low growth and higher taxation or managed growth and moderate taxation.
“Naysayers never seem to apply their minds to finding solutions to congestion, water, power, housing affordability and infrastructure issues. Do you really think these issues will disappear with a significantly reduced rate of population growth?” he asks. “Those who oppose strong growth never fully explain the options: managed growth and moderate taxation; or low (or no) growth and raised taxation.”
Grubby move
The Immigration and Citizenship Minister, Chris Evans, put out a grubby little media release on June 30 trying to claim credit for a fall in the rate of our population growth.
“The latest statistics confirm Australia's net overseas migration (NOM) level is on track to drop by about 20 per cent by the end of the financial year in response to government reforms to temporary and permanent migration and economic conditions,” Evans trumpeted, apparently taking credit for Indian student bashings in Melbourne and fewer Australian expats returning home from GFC-damaged jobs overseas.
Those “latest statistics Evans’ referred to were for the December quarter - the government’s new skilled occupations list (SOL) didn’t kick in until last week.
The release got worse, blaming high long-term international student numbers on coalition government policies - policies than Evans had been happy to let run for more than two years while the local international education industry made hay.
Evans has either been complicit or incompetent in his ignorance of the abuses of the international student industry by the dodgy end of the trade. It seems only when population growth became a political issue was the Minister shocked to find all was not kosher with the hairdressing and cooking courses Melbourne’s taxi drivers were taking. Maybe he needs to get out more - by taxi.
Whatever the reason, the minister was happy to claim that the level of NOM had peaked and was clearly on the way down.
''The government is committed to ongoing forward-planning and reform to ensure immigration levels are guided by Australia's needs and not by the desire of prospective migrants to come to Australia,'' Senator Evans said.
‘‘Prime Minister Gillard has already articulated her vision for a sustainable population- one that supports our environment and our renewable resources and that is in turn supported by proper resources and infrastructure.’’
Bernard Salt put those same figures in a different perspective: Slashing last year’s population growth of 432,000 by 20 per cent will still mean Australia has 35 million people by mid-century.
Not so dense
As to the politicised threat to our lifestyle such a “bigger” Australia poses, a submission by one Jim Hanna in the Crikey.com.au comment section neatly answered Dick Smith’s usual criticisms:
“Our biggest capital city, Sydney, has one of the lowest population densities of any major city in the world at just 2058 persons per square kilometre. Vienna, supposedly the most liveable city in the world (according to the 2010 Mercer Survey) has almost twice as many people for the space at 4050 persons per sq kilometre.
“Even if Sydney's population were to double tomorrow, we'd still have a lower population density than Greater London (4758) and Vancouver (5335)...
“We do have room to grow in Australia - and just as well. That growth is going to occur because our population is living longer and our birth rate is rising. Immigration as a proportion of our population growth is expected to decline over the years.”
What we’re left with politically though is the sort of soft-minded pap trotted out on this week’s Q&A by Liberal Senator George Brandis and Labor’s Tony Burke, he of the PR-title ministry, Sustainable Population Growth.
Neither was capable of anything more than trying to blame the other for a problem that they couldn’t prove existed. Both dissembled furiously when challenged to put a number of what our population should be.
You wouldn’t trust either of them to look after your chooks, let alone the future of Australia.
Michael Pascoe is a BusinessDay contributing editor.