Ms Gillard and the importance of population planning

I am leaving the current froth and bubble of Australian politics aside for the present until it all settles down. Instead, I have been trying to get my mind around just one thing, what Ms Gillard's rejection of a "big Australia" in population terms might actually mean.

As it happened, last week the Australian Bureau of Statistics released Australian new population estimates, including population projections. So it seemed appropriate to look at the numbers. I am also featuring the issue in this week's Armidale Express column since it is a little while since I wrote on demography there.

As with a lot of these things, actually looking at the numbers is a good first start.

One of the the things that I have mentioned before that we all tend to forget is the large number of Australians who leave the country. We actually need immigrants just to keep the population stable. As an example, assume that we had wanted a zero increase in the Australian population in calendar 2009. To achieve this, we would still have needed a bit over 77,000 new overseas migrants. Had we wanted to limit the total population increase just to the natural increase, the number of new migrants rises to 230,000.

There are all sorts of leads and lags built into the migration statistics. However, the thought that we might still need significant migration just to stand still or even grow slowly is not a common one.

For someone like me interested in the economic entrails, one of the most interesting issues lies in the nature of the dynamic effects on population distribution and the pattern of economic activity across the country. Forget the overall macro-effects, the usual frame of debate, and instead focus on the impact on particular regions and cities.

At one blow, the adoption of a zero or low growth population target would invalidate the key assumptions on which a lot of current planning is based. Of all Australian cities, the effects would be most pronounced in Sydney and possibly also Adelaide. Depending on the target set and the assumptions used, both cities could experience an actual population decline. This comes about because, on current population dynamics, both are heavily dependant on overseas migration for new people.

To flesh this out a little, it seems likely but not certain that internal population dynamics, the movement of people within Australia, would retain current patterns because these are in part driven by shifts in economic activity. The faster growing areas would continue to grow. However, with lower overall population growth, their relative share of the Australian population would increase at a faster rate. Conversely, the relative shares of other parts of Australia would decline at a faster rate. 

These shifts would flow through in a whole variety of ways. They would affect infrastructure investment, building industries, housing prices and electoral boundaries. They would affect the size of the Australian workforce.

I am not saying that all this is necessarily bad. At a purely personal level, while I am a supporter of migration, I do struggle with the idea that our big metropolitan conurbations should take so many more people when other parts of the country need people. I would be more comfortable if planning actually took into account where we wanted people to go, rather than the simple application of trends.

You can see why I find all this fascinating? That said, I don't actually expect the changes to be as dramatic as might be suggested by my analysis. In practice, the most likely outcome is simply some cut in overall migration numbers sometime in the next few years. This is likely to happen anyway, given the changes that have been made to the treatment of overseas students.