How much bigger should Australia get?
THE Covid-19 scourge has forced all of us to rethink our daily lives. From a bigger role for government in providing Jobkeeper to the joy and misery of working from home, Australia has changed more in the past 18 months than in the previous 18 years. Very admirably, Treasurer Josh Frydenberg in this year's federal budget put on hold our economic repair and instead prioritised jobs and services. It's refreshing to hear governments put people before profits. But we're also told that, in time, Australia can "grow our way out" of our Covid-19 slump. And therein lies the debate. Policy-makers are quick to point out that the years 2020 to 2022 will actually see a negative migration rate. That means more people will leave Australia than enter it. In fact, Australia's migration intake won't return to "normal" - at over 200,000 new migrants each year - till 2024. The "old-thinkers", from economic boffins to big business operators, certainly do. They rub their hands in glee at the prospect of an even bigger Australia that will increase demand and, in turn, economic growth. Even the major political parties are complicit. Where the Liberals' federal platform makes no mention of population at all (its population policy appears to be not to have a population policy), Labor's federal platform merely affirms the desirability of locating migrants to regional Australia. There is no mention of population targets or caps. Even the Greens, which once urged us to minimise the human footprint on the Australian environment, have gone silent. If the ecological argument doesnt worry you perhaps the economic case will. Photograph : Jason O'Brien  This is appalling given Australia is arguably facing an even greater environmental catastrophe than much of the world. In addition to global warming, Australia - the earth's driest inhabited continent with so little arable land but home to a rich ecosystem - simply cannot survive the damage 30, 40 or even 50 million bodies will inflict. Disturbingly, scientists at the Threatened Species Recovery Hub have found that European occupation since 1788 has seen 10 per cent of Australia's native mammal population become extinct. All up, at least 100 species of animals and plants have been lost from Australia in that time. And if the ecological argument doesn't worry you perhaps the economic case will. Big business, of course, is the greatest exponent of unbridled immigration because more Australians create a bigger labour pool which, in turn, keeps wage growth low. Indeed, wage growth in Australia was falling even before Covid-19 and, in 2018, was just a shade above 2 per cent. But with GDP growing between 3 and 4 per cent over the past decade, the argument that Australia cannot afford higher wages is clearly bogus. After all, Australian CEO salaries grew handsomely in the pre-pandemic years. A smaller immigration intake will also reduce the need for infrastructure and slow the urban sprawl. With reduced demand for new schools, hospitals and roads, governments can get off the borrow-to-build merry-go-round. Naturally, lower debt also means reduced interest payments, with government revenue instead invested in 'quality of life' areas such as education, sport and the arts. The Australia drought: Bringing pain to local communities: The drought in Australia is killing fish, wildlife as well as communities. Falling tourism, declining population and job losses is bring pain to rural Australia. Then there's the reduced pressure on housing costs a slower population growth would bring. With just 30 per cent of Gen Y (aged between 25 and 40) Australians today owning their own home, the Great Australian Dream is fast becoming a fantasy for millions of young Aussies. Japan is the gold standard that proves economic growth does not have to equal population growth. Despite a population in long-term decline, Japan's economy before Covid-19 still grew at between 2 and 3 per cent annually. The answer, then, is for Australia to think economically smarter, not demographically bigger. It also means allowing governments, like Japan has historically, to more actively steer investment decision-making. The pandemic has caused Australia pain but it also offers an opportunity to re-set the population target button. Let's not repeat the 'big Australia' mistakes of the past.