Thursday, May 10, 2012

Populate or perish?

Many global population projections point to the current world population of roughly seven billion people peaking at around nine to ten billion in 2050, after which numbers will slowly decline. In the midst of this growth, Australia’s current population of 23 million is predicted to rise to around 30 or 35 million in the same period. This low growth outlook has been called ‘big Australia.’ We are kidding ourselves, aren’t we?

‘Populate or perish’ was a rallying cry of post World War II Labor Immigration Minister Arthur Calwell as he sought to overcome domestic resistance to immigration. For Calwell, immigration was the key to quickly boosting Australia’s population numbers in the interests of economic and military security. An avowed supporter of the ‘white Australia policy’ he sought immigrants from European backgrounds. Asia was, back then, regarded as the enemy.

Above: world populations since 1960. Below: Australia’s rate of population growth since 1960. Source – World Bank. 

How things change, yet stay the same. In 2012, it’s arguably just as much in Australia’s interests to boost its population numbers, in the interests of economic security and (according to some) military security also. And again, immigration – not an accelerated breeding program of naturalised Australians – is the only way this can realistically occur. As domestic industries increasingly surrender to global competition and as energy, agriculture and services industries increasingly depend on foreign markets for their long term survival, the issue of Australia’s relatively small population – despite its obvious continental mass – raises little by way of public debate.  A larger domestic population might provide more critical mass for domestic industries, for local employment and for community wide infrastructure to succeed. Dreams of Parisian, London, or New York standards of public transport, for example, will never succeed when our cities are just small fractions of the urban mass that makes these things possible elsewhere.

But talk of a ‘big Australia’ – by which we really mean just a little less small than now – has become ‘persona non grata’ in public policy circles. We have a Federal Population Minister, but he hasn’t issued a single statement on population policy this year (compared with a swathe of environmental statements issued under his Environment Minister hat).  Our Prime Minister has other things on her mind, but even if her Government was on more solid ground her antipathy to a ‘big Australia’ is well known and a matter of public record. And such is the apparent public hostility to the notion of a bigger population, intermixed as it is with a blend of doomsday environmentalism and references to failed Malthusian or Paul Ehlrich ‘Population Bomb’ scenarios and a host of other myths (including the most preposterous: that Australia is running out of room and resources), that few political or public policy leaders want to take up the debate in favour of growth.

With that in mind, I thought some very simple reality checks might prove helpful to stimulate your thinking about Australia’s population capacity relative to the rest of the world. Wendell Cox, author of the global housing affordability study ‘Demographia’ recently published his Demographia World Urban Areas  report and there’s a handy summary article of megacity populations here on Joel Kotkin’s New Geography.   I want to take just two examples and interpose them into the Australian context.

First, let’s look at Los Angeles, California.  Often cited as a region with similarities to the Australian urban context (both in a positive and negative sense), this city popularly known for its ‘sprawl’ actually has a very high level of population density. The total population of the Greater Los Angeles area is around 15 million people. Put into context, that’s roughly two thirds of the entire population of Australia living in the Greater Los Angeles ‘sprawl.’ 

Above: The greater Los Angeles area and below, the same area superimposed in south east Queensland. 

Put into a visual context, the contrast is even more apparent. If we took the footprint of the greater Los Angeles area, representing its 15 million ‘sprawling’ inhabitants, and overlaid this at the same scale over south east Queensland (just by way of example) it’s immediately apparent that it can be done with room to spare. So two thirds of the entire Australian population, hypothetically (and that’s all this is) could fit within SEQ leaving one third or around 7 plus million to inhabit the entire rest of the continent.

In short, at LA levels of population density, roughly the area we know of as south east Queensland could accommodate some 15 million people comfortably. Not just the 3 million people it currently has, which apparently means (if you listen to some) that it’s bursting at the seams and can’t possibly take any more. Absolutely chockers. No more room. Full up. Go away.

A more extreme example, just to stretch the imagination further, is worth thinking about. Jakarta, Indonesia (our nearest large foreign neighbour) has a population of 26 million people. That’s more than the entire population of Australia, living in one (very crowded) city – at the rate of 9,400 people per square kilometre.

Now, I’m not wishing that sort of urban density (and in large part, misery) on anyone in Australia, but the hypothetical comparison still applies, for the sake of discussion only. The footprint of greater urban Jakarta, home to 26 million people, easily fits within the boundary of south east Queensland.  In fact, it doesn’t even require the Gold or Sunshine Coasts to do it. Imagine this: the entire population of Australia, crammed as it would be into this super-compact urban footprint, and not a single soul living anywhere else on the entire continent? 

Above: Jakarta’s footprint and below, the same footprint – home to 26 million people – superimposed on south east Queensland.

The argument that Australia is somehow incapable of supporting substantially larger population numbers cannot rely on some myth that we short of room. Nor can it rely on suggestions that we would exhaust our energy stocks (we are a net exporter and would remain so at much larger population numbers), nor our food production capacity (again, we are a net exporter and would remain so even with much higher levels of population). In fact, in terms of food production, a lack of domestic market scale poses a significant problem for producers. The efficiency gains of primary production (livestock to cropping) has outpaced the growth in population. 

There is an argument regularly raised that Australia has insufficient water supply to support much larger population numbers but this argument doesn’t hold water (sorry, couldn’t help that). What we do lack is water storage by way of dams, but the environmental lobby has vigorously opposed almost every proposed dam in the last 30 years whether it is for domestic supply, agriculture or hydro energy. The lack of water storage has been a policy decision made by successive governments for varying political reasons. The lack of water per se is not an issue.

Think also for a moment how cities like Mexico City (population nearly 20 million people) or Cairo (population 18 million) or even countries like Morocco (population 32 million in 500,000 square kilometres on the edge of the Sahara compared with Australia’s 7.6 million square kilometres) manage for water? For Australia to claim it cannot support more people due to water limitations would be a bit of joke if aired in the United Nations. 

Above: arable land area in hectares per person. Australia is well ahead of the field. 

Infrastructure deficits are the other vexed issue raised by objectors to population growth. They have pointed out that infrastructure investment has not kept pace with population, and in some respects they’re right. The problem though is largely that strategic infrastructure investment in this country is something really only talked about. Instead, what typically happens is that billions are doled out on pet projects in marginal seats or designed to win over particular interest groups that some focus group or other suggests could hold the key to winning the next election.  Politically motivated rail projects (especially in NSW), home insulation schemes, TV set box boxes, green energy schemes... the list of our nation’s capacity to waste vast sums quickly with little to show for it is pretty impressive. Our deficient national road network, our inadequate domestic water storage (in many areas), our looming potential energy problems (not just in price thanks to a carbon tax but also in terms of power generation shortages according to some experts) – the bigger and more strategic infrastructure priorities which would support growth seem to get the least attention. Witness the latest Federal Government budget. (Read what Infrastructure Partnerships Australia, among others critical of the budget, had to say here). 

So the capacity to fund and deliver strategic infrastructure isn’t the issue. Inept public policy is.

Instead, do we have some other more deep seated aversion to a bigger population? And is this race based? Despite being a successful nation of immigrants (and a nation of successful immigrants) are we fearful for our culture if more immigration is the key to growing our population to economically sustainable levels? Environmental impacts are often publicly cited as the reason to oppose more people, but if the examples of Los Angeles or Jakarta are remembered, we could in theory house a great deal more people without encroaching on vast areas of natural terrain. 

If it’s not race, what is the deep seated objection to a ‘big Australia’ that seems to have so many public policy leaders running for cover on the issue? At some stage, public policy is going to have to confront the issue in a rational manner. The clock is ticking for Australia’s ageing population and even the Federal Government’s own ‘Tax Reform Roadmap’ released with the May budget warned that:  “The proportion of working age people is projected to fall markedly over the coming decades. Today there are about 4.8 people of traditional working age for every person aged 65 and over. This is expected to fall to around 4 people within the next 10 years and to around 2.7 people by 2050.”

Australia’s current rate of population growth is hovering around 1.4%. We are just shy of 23 million people. We say we’re concerned about getting to 35 million by 2050, by which time the world population will have increased by 2 billion people. We know that our ageing population will struggle to be supported by a diminished workforce in that time. We know we already lack sufficient critical mass to sustain a variety of industries which are too regularly yielding to the weight of global competition, much of which is based on numerical strength. Yet we consistently refuse to confront the question of a larger population and what it would take to get there, along with the consequences of failing to do so.

Whether we aim to become a nation of 35 million or 50 million or if we ultimately agree that despite the consequences that are clearly understood we would collectively prefer to remain a small nation of less than 30 million, it’s a discussion we need to be having. Pretending the issue isn’t there won’t do anyone any good.

Tuesday, May 1, 2012

Is growth making a comeback?

The latest local government elections in Queensland, along with the by election for former Premier Anna Bligh’s state seat of South Brisbane, may point to a fundamental shift in popular mood back in favour of growth and development. After many years of anti-growth policy paranoia, it’s a refreshing wind if it lasts.
Was the electoral storm that swept ‘Can Do’ Campbell Newman and the conservative LNP to power only a few weeks ago something more than a direct reaction to a failed state Labor government? Subsequent local government election results state-wide may point to a more fundamental shift in community attitude.  Why? Because one month after a resounding rejection of the state government, voters once again lined up to sink the knife into incumbent mayoral candidates who have presided over needless bureaucracy, excessive red tape and anti-growth policies disguised in political or media spin. Those who expected a bounce back to Labor from voters recognising the very large mandate of the new LNP state government were proven badly wrong. Even Labor’s stronghold state seat of South Brisbane, narrowly held by the former Premier at the last election, barely got over the line to Labor this time in a by election.
Is this a sign that anti-growth and anti development policies, manifesting themselves in all manner of precautionary principles, red tape and green tape and which effectively ground the Queensland economy to a standstill, are on the nose? Maybe it’s not just the Labor ‘brand’ but bad public policy per se which is being rejected. ? The real economy – undisguised by the statistical support of the booming resources sector – has been suffering, with construction activity across the board falling to record lows, interstate migration and population growth slowing to record lows, and house prices and personal balance sheets under stress. Rising utility costs, partly or largely (depending on your view) driven by green-tinged policy settings, have hurt average families. New housing costs have risen and proven a barrier for a generation of young families wanting to enter the market without having to sacrifice everything in exchange for a mortgage they can’t afford. Overall, the people are clearly pissed off. And they showed it.
In Brisbane, Lord Mayor Quirk – a prominent anointee of ‘Can Do’ Campbell Newman -  was returned with an increased majority. And elsewhere, pro-growth candidates replaced incumbents whose administrations had presided over growth in regulatory process with little by way of measureable outcomes. In Redlands, a reputedly notorious local authority in terms of its hostile attitude to growth and development, Mayor Melva Hobson was turfed out in favour of pro-growth candidate and new Mayor, Karen Williams, (Williams scoring 69% of the primary vote to Hobson’s 31%).
On the Gold Coast, pro-growth candidate and Chamber of Commerce President Tom Tait won resoundingly with 37% of the primary Mayoral vote. The next closest candidate was Eddie Saroff – a long serving Gold Coast Councillor and former Labor federal candidate, on 17.5%.
On the Sunshine Coast – another Council which became notorious for being difficult to deal with and consumed with red tape and pointless administrative process – the pro growth and pro business candidate Mark Jamieson (33%) scored more than double his nearest two rivals, each on 17%.  
In Ipswich, popular Mayor Paul Pisasale increased his majority, with almost 88% of the primary Mayoral vote. You would be hard pressed to find a more passionate, pro-growth and pro-development Mayor than Pissale, especially when it comes to his beloved Ipswich. This is a man who proudly proclaimed that he welcomed development and developers to his city.
In Cairns, another region fast developing a reputation for an economy strangled in anti-development red and green tape and excessive planning controls, prominent local business identity and pro growth candidate Bob Manning picked up 56% of the primary vote, well ahead of his nearest rival, the incumbent Val Schier on 20%.
The South Brisbane by-election result adds weight to the argument that this is part of a widespread and deep seated mood for change.  Labor, in what is billed as a stronghold inner city seat, expected some solid bounce back as South Brisbane voters were encouraged not to give the LNP another seat in Parliament. They didn’t listen to the party line, and only one in three (33%) put the new Labor candidate Jackie Trad first.  By contrast 38% of South Brisbane voters put LNP candidate Clem Grehan first. Labor had to survive on the preferences of the green vote, which drew 19.4% of the primary vote in that seat.
Now take these most recent results and put them back to back with what happened in the state election just over a month ago. The LNP picked up a staggering 50% of the primary vote state wide, giving them 78 of the 89 seats. Labor picked up just over one in four primary votes, at 26%. The Greens only picked up 7.5% - less than their result in the previous election. The Greens in fact were outpolled by Katter’s ‘Australia Party’ which scored 11.5% of primary votes state wide. (I’m not sure whether to describe Katter’s party as pro growth but its connections to pro development rural interests suggests it is).
That state election was a clear cut choice between a ‘Can Do’ Campbell Newman and a Labor machine which ran heavily on anti-development messages in its campaign, alleging that an LNP Government would be hostage to developers and hostile to the environment. There was no confusion in voter’s minds when they rejected the latter and firmly chose the former. You don’t get much more pro-growth than a candidate and a party which uses ‘Can Do’ as its rallying cry.
The point of all this is that the new political mandate for growth shouldn’t be dismissed as some isolated reaction to the past government’s failings. The community seem to be making their views clear: bring back growth, bring back economic prosperity, restore the state’s balance sheet and with it, restore some health to personal balance sheets. The anti-growth movement will never be silenced by majority views but hopefully in this clear message from the people, it will take a backseat and keep a low profile, for a while at least.
For Labor, aligning itself with anti-growth movements might prove even more damaging in the long run. Average workers on average wages left the Labor Party in Queensland in no doubt they were on the nose. It’s not just an issue of a damaged brand, and much more than a failed campaign strategy. If Labor stands in people’s minds as a party which objects to progress, which imposes punitive taxation on even humble endeavours, which is responsible for excessive intrusion of regulation into people’s lives, and which is hostage to fringe interest groups in a bid to win preference deals, it may be left in a political wilderness for a long time to come.  Labor’s reconnection to working families and their values and interests is as surely the key to the revival of their fortunes, just as John Howard achieved and as Campbell Newman and a host of newly elected Mayors in Queensland have proven.