Macrobusiness reported the latest ABS release on demographics.
“…….The ABS released its Australian demographic statistics for the March quarter of 2017, which revealed that Australia’s overall population growth rate has accelerated led by unprecedented growth in Victoria, which has once again obliterated records.
According to the ABS, Australia’s population rose by 1.61% in the year to March 2017 to be way above the 30-year average:…..”
389,100 new people last year.
If nearly 400,000 sounds like a lot that is because it is.
To give that figure some context check out the demographics for the USA between 1790 and 1890.
The population grew from about 3 million to 62 million.
That is about 59 million over 100 years or about 600,000 per year. Considering Australia is a lot more arid than the USA 400,000 more people a year is an ambitious target.
However, although 400,000 is an ambitious target the critical issue is whether we can ensure that the productivity of the existing population and the productivity of new arrivals grows, as that means the total pie is getting bigger faster than the mere rise in population would require.
At the moment the pie is barely growing fast enough to maintain the size of individual slices. When that is the case the question arises, why do it?
So what is the problem?
A lack of productive investment and far too much unproductive #fakeinvestment aka speculation.
Rather than investing – allocating resources – to increase the productive capacity of the economy we are encouraging great gobfuls of resources to be sprayed at speculation in the prices of existing assets.
What is to blame for that?
The ‘reforms’ to our monetary and banking model over the last 40 years that did not bake in a requirement that banking system credit creation be directed to increasing the productive capacity of the economy.
Rather than use their extraordinary credit creation privilege to support productive new capacity and investment our private banks took lazy street and offered easy credit to speculators in the prices of existing assets.
This tendency was encouraged by Costello and Howard who offered attractive capital gains tax discounts for asset price speculation.
This deliberate LNP policy of incentivising speculation or #FakeInvestment has meant, not surprisingly, that Australia’s productivity growth has slowed and continues to worsen.
So at an absolute minimum, all the rootless cosmopolitans who campaign for open borders and a global welfare function and all the “Gerry Harvey” Big Australia fans MUST immediately pursue reform of our banking and monetary system simply to ensure that there is sufficient productive investment to support a growing Australia where not just the total pie but the individual slices of the pie grow.
Now before everyone gets excited and consign the Glass Pyramid to the Big Australia camp remember that reform of the monetary and banking system to encourage productive investment DOES NOT mean that the population must grow. That remains a political and environmental question.
It is simply an essential pre-requisite to population growth that will not antagonise a growing percentage of the population.
It is a shame that a bright guy like Dr Andrew Leigh of the ALP could not explain this in his Big Australia cheer leading effort “Choosing Openess” the other day. Perhaps his Lowy Institute book will focus on this critical issue.
Until the ALP really starts to nail the issue of how our dysfunctional and broken banking and monetary system and tax policy ‘reforms’ over the last 40 years, are diverting resources to #fakeinvestment (asset price speculation) they are going to continue to sell an idea that will have a strong whiff about it to more and more Australians.
Voters opposed to a Big Australia are not fools, they know they are being sold a lemon.
Congested roads, congested public transport, congested hospitals, expensive land and housing are ALL symptoms of 40 years of too much #FakeInvestment and not enough real investment.
For more discussion of these problems wander the corridors of the Glass Pyramid as the shelves are packed with discussion of these issues.