Opinion & Commentary
What's missing from the population debate
Population has been dominating the headlines for weeks, but you could be forgiven for wondering what on earth the debate is actually about. Tony Abbott thinks it’s about migration. Bob Brown thinks it's about the environment. And Julia Gillard hasn't really given us much of a clue, except that she thinks that whatever it is, it's in western Sydney in places like Rooty Hill. For all the rhetoric, population remains a resolutely policy-free zone.
But this is not surprising. Our federal leaders don't actually have much to do with the challenges brought about by population growth – rising house prices, overcrowded buses – so it's not surprising that they have so little to say about them. In fact, these problems fall firmly in the domain of state governments.
This gives us a clue as to why they are going unsolved. To seriously meet the challenges of population growth, we first need to deal with some problems with the functioning of our federation.
In Australia, the few levers that governments have over population growth – such as migration – are controlled by the federal government. The federal government also has an implicit interest in keeping Australia's population growing. In our heavily centralised tax system, all new revenue flows in one direction: towards Canberra.
However, most of the costs of population growth – the new schools, the new roads, the hospitals – must be met by the states. In this sense, state governments have an interest in keeping population growth down.
Here we have a fundamental disconnect. The federal government gets all the benefits of population growth, but state governments bear the costs.
It's little wonder that state governments around Australia are taking a 'heads in the sand' approach. Most premiers have been conspicuously absent from the population debate. No doubt they hope that if they keep their heads down the whole thing will pass them by and it will be business as usual.
But as George Megalogenis highlighted in The Weekend Australian earlier this year we have already had something of a natural experiment in what happens when governments take this approach to population growth. You could call it the 'Bob Carr effect'. The former NSW premier famously declared that Sydney was full, and spent a decade studiously avoiding doing anything to prepare for the fact that Sydney's population might grow.
The result is that while NSW was once the driver of the Australian economy, and Sydney the jewel in its crown, it is now mocked as an economic basket case. NSW's growth, in terms of both its economy and its population, lags stubbornly behind that of Queensland and Victoria. And with Sydney's roads and public transport systems at breaking point, it's little wonder that the people of western Sydney – at whom Julia Gillard aimed her 'small Australia' pitch – are sceptical about the ability of governments to deal with population growth.
So with the failed experiment of NSW in mind, do we really want to expand the Bob Carr model to the rest of Australia?
This kind of approach suggests that if we could somehow limit population growth then all our infrastructure and environmental problems would be solved. But the almost inevitable reality of population growth and ageing means that we can’t afford to be complacent about meeting these very real and pressing policy challenges.
A good example is housing. We have about nine million households in Australia. But if our fertility and migration levels remain constant we will have about 16 million households by 2050. If we were to dramatically cut migration to 70,000 a year – the number suggested by some small-population advocates, such as Labor MP Kelvin Thompson – we would still have 14.5 million households by 2050.
Even under the most restrictive assumptions of zero net migration and falling fertility, we will need an extra three million houses by the middle of the century.
This is because as the population gets older, household sizes shrink. This is a development we can already see taking place in the low-fertility countries of Europe. Under every realistic scenario for population growth and ageing, we will probably need to double our housing stock within the next 60 years.
If governments don't lift some of the constraints on building immediately, our existing housing shortage is going to get much worse in the very near future, regardless of what happens with migration and the birth rate.
There is a very real danger that the debate at the federal level about limiting population growth will translate into excuses at the state level for not doing enough to prepare for the inevitable challenges ahead.
Issues like housing and transport require urgent policy reform and should be at the centre of our population debate.
Until we realign our federation so that the states share in some of the benefits of population growth – and perhaps a more competitive type of federalism is the model here – it seems unlikely that they will rush to shoulder the costs of that growth.
Until then, perhaps it's time we brought the premiers into the population debate.
Jessica Brown is the Policy Analyst at the Centre for Independent Studies, and co-author of the CIS’s coming report Populate and Perish?
