Australia can cope with population growth. We just need smart planning.
MY COLLEAGUE Kelvin Thomson recently issued a "14-point plan for population reform" in which he argued that Australia's environment and infrastructure cannot cope with a population of 35 million by the year 2050, which has been forecast by Treasury.
Thomson suggested a cut to the skilled migration intake and a freeze on the family reunion intake (while increasing our refugee intake).
Although I agree that concerns about environment and infrastructure are legitimate reasons for questioning population growth, I believe such concerns can be mitigated. Minimal growth should not be our aim.
Continued high population growth is an almost uniquely Australian issue. Most developed countries are battling the reverse problem, that of population decline. The populations of Italy, Germany, Japan and South Korea will shrink by tens of millions of people over coming decades. Russia faces the greatest demographic collapse, with its population predicted to shrink from 140 million to 100 million by 2050. All these countries face disastrous economic consequences. The proportion of people aged over 65 is expected to rise rapidly, as is the cost of medical care. The growing tax burden will fall heavily on the declining proportion of the population who are of working age.
At the turn of the millennium, it seemed Australia might be going down the same path. Our rate of natural increase had been declining for decades, reaching a low of 1.7 per female, and our level of migration was lower than the average over previous decades.
However, in recent years the trends have reversed. We have had rapid increases in our rate of natural growth and in immigration. The Howard government, in fact, encouraged an unprecedented number of migrants.
While neither the Government nor the Opposition has a firm policy of supporting the positive change in natural increase and the boost in migration, principally skilled immigration, a long-standing "vibe" has prevailed in both major parties that population growth is good for the nation.
That is why I am apprehensive about moves, such as proposed by Thomson, to sharply cut our migrant intake (from its current 200,000 a year to 95,000), and particularly our intake of skilled migrants and recent graduates (from 130,000 to 25,000). Not only would it shrink the population of working-age people able to support the ageing baby boomers, it would have economic consequences as Australia still faces a skills shortage.
Research shows that cutting migration to the level Thomson suggests would cost the federal budget about $600 million in the first year. Access Economics figures show that a single year of migration (2008) will add more than $800 million to the tax base in the first year and $1339 million in the 20th year. One year alone of principally skilled migration would benefit the taxpayer by more than $20 billion over the 20-year period.
I do not accept that population growth and protecting our environment are incompatible. Australia can increase its population and still manage our water problem. We must cut our water consumption, better conserve water, modernise irrigation and invest in desalination.
One successful example is Victoria's desalination project, which will provide 150 billion litres of non-rainfall-dependent water from next year. Increased recycling, including upgrading water treatment plants, is projected to save more than 100 billion litres of water per year.
By 2036, Melbourne's population may be approaching 7 million and regional Victoria will grow by up to 500,000 people.
Plans are in place to upgrade transport systems to adjust to this growth: a new rail tunnel between west and east will increase the capacity of Melbourne's rail network by about 12,000 passengers every hour; a new regional rail link will be the biggest expansion to the rail network since the Melbourne city loop.
Last month, the states and the Commonwealth agreed that infrastructure funds would be tied to integrated urban planning that must take into account demographic growth.
If we support the ''vibe" of population growth having economic benefits, it is even more incumbent on us to cut our greenhouse gas emissions, cut our per capita energy use, boost the use of renewable energy, and put a price on carbon through an emissions trading scheme.
We can grow larger, richer and maintain our generous care of seniors, but we will need integrated planning for future water, energy and transport throughout Australia.
Michael Danby is the chairman of Federal Parliament's joint committee on migration.
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