01 January 2011

Strength and vitality

Immigration and population growth has made Australia the strong vibrant country it is today.

Australia has grown at an average annual rate of 1.4 per cent over the last 40 years. Australias population was 13 million in 1970 and it's 22 million today. We've doubled our population, but in the same period our economy has more than tripled in size.

The Federal governments projection of 36 million people in 2050 already assumes a cut in our historical rate of population growth to just 1.2 per cent a year. If the government were to try and limit Australias population to less than 30 million by 2050, the average annual growth rate would plummet to just 0.7 per cent half its historical level.

Shortage of labour

In the coming years Australia wont have an unemployment problem; our problem will be a major shortage of skilled labour.

By cutting immigration, many Australian businesses simply wont be able to get the workers they need. Theyll either have to scale back their investment plans, or take their business off-shore. Either way, thats less economic activity and tax revenue for Australia.

Congestion

Congestion in our cities flows from inadequate public investment and planning restrictions on privately funded housing, retail and office development. Population growth is not the problem a lack of new infrastructure and misdirected town planning policies are the real culprits.

Congestion hot spots occur when there is insufficient housing, a lack of investment in roads and public transport and heavy restrictions on new retail precincts to service community needs.

Immigration actually helps to deal with the inadequate public investment in infrastructure, because new migrants increase economic activity and bolster tax receipts. This extra money should, in part, be invested in new urban infrastructure.

The impact of static or declining populations

Cities with static or declining populations typically see long-term falls in home prices. This is not as good as it sounds. It makes banks nervous about lending and people become reluctant to buy. Home owners perceive their wealth to be in freefall and they stop spending. This creates a vicious cycle.

While steadily rising home prices are a sign of economic success, it's true that, in many places, home prices are rising by too much, too fast. Thats due to a national housing shortfall that's likely to reach 300,000 homes by 2014. The shortfall comes courtesy of regulatory constraints, as well as failure by government to invest in urban infrastructure.

Environmental impact of urban expansion

When cities expand, new urban areas are generally built on cleared farmland with no significant biodiversity loss. Areas of high conservation value are protected.

All of Australias major capital cities have long term water resource plans in place to meet population increases. In the next three years the construction of six Australian desalination plants will have been completed. Recycled water can also play an important role in the future already water recycling has increased by 52 per cent across the major capital cities in the three years to 2009.

More information

For more information (and source details) please read our fact sheet:

Fact Sheet - A "Big" Australia?