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The Forum > Article Comments > Living off our capital > Comments

Living off our capital : Comments

By John Coulter, published 5/10/2010

The assumption that Australia can continue to grow its GDP and population is putting us on a collision course for collapse.

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Satelite photos of Australia taken at night
http://www.unisa.edu.au/barbarahardy/research/electricity.asp show most of Australia’s population concentrated on a sliver of land along the east coast.

There are few other places to live, because there is not enough water.

Anyone wanting a further increase in population must be able to put forward workable plans to somehow find more water, and not just coal.
Posted by vanna, Wednesday, 6 October 2010 7:46:08 AM
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“Anyone wanting a further increase in population must be able to put forward workable plans to somehow find more water, and not just coal. Posted by vanna”

But, “Australia has more water per head of population than Europe” as cornucopians are pleased to (correctly) point out. And this issue they bang-on about, quantity/person, is misleading to say the least.

It is not simply the quantity of water in Australia imposing restriction on long-term prospects for a viable and expanding population. To demonstrate parallel ridiculous comparisons:

Antarctica is the continent with the greatest reserves of fresh water, yet it has the lowest precipitation. It also has the lowest rate of evaporation.

Comparing Europe v/s Australia - overall Annual Rainfall is about 600mm/500mm, Annual Evaporation about 500mm/2050mm.
For Australia, vastly fewer opportunities exist for capture-and-storage of rainfall for distribution to places of need; and those that exist have already exceeded the capacity of the landscape to accommodate them.
Posted by colinsett, Wednesday, 6 October 2010 10:41:44 AM
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Curmudgeon,

I didn't accuse you of being a conspiracy theorist, just said that it is quite reasonable to suggest, as did John Coulter, that rich and powerful people who benefit significantly from population growth might be able to exert some influence on government policy, especially considering the amounts they donate to political parties. Of course, you and Cheryl can always claim that corporate donations are only made out of a pure, disinterested love of democracy (even though this would be in breach of fiduciary duty).

Rhian,

Your statistics might be more representative, but don't necessarily demonstrate causation. Booming economies might just be attracting more people. Numbers 1-10 on the World Economic Forum Global Competitiveness Index (GCI) (with population growth rates) are Switzerland (0.276%), Sweden (0.158%), Singapore (0.998%), United States (0.977%), Germany (-0.053%), Japan (-0.191%), Finland (0.098%), Netherlands (0.412%), Denmark (0.280%) and Canada (0.817%). We are number 16. The latest ABS figure for Australia gives us 1.8% population growth for the year to 31 March 2010. It was 2.2% for the previous year. These figures are consistent with no correlation between economic performance and population growth.

"The GCI is based on 12 pillars of competitiveness, providing a comprehensive picture of the competitiveness landscape in countries around the world at all stages of development. The pillars are: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation."

http://www.weforum.org/en/media/Latest%20News%20Releases/NR_GCR10
Posted by Divergence, Wednesday, 6 October 2010 11:51:32 AM
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If the Federal Treasury used quadruple bottom line reporting and enaged analysts that had good peripheral vision, then their Red Book briefing to the incoming Gillard government may have reached some of the same conclusions in John Coulter's excellent article.

Sadly, Treasury is unashamedly a high population growth supporter, totally lacking long term strategic vision about the perils of living off our capital or the unsustainable consequences of constant population growth in the most arid continent.

It's true, Treasury qualified their pro-growth recommendations with a provision that infrastructure investments are necessary to accommodate a burgening population.

That condition looks like a pipe-dream given the enormous national infrastructure maintenance backlog identified by the Australian Local Government Association.

Our Australian governments cannot even maintain the assets they have. Why else would the States be flogging off railways, ports, energy providers, airports, lotteries, roads, etc, etc, on the advice of State Treasuries to reduce and eliminate deficits racked up by high operational costs, waste and exorbitant parliamentary overheads. The solution?

1) Establish an independant body like the Reserve Bank that sets population growth limits based on sustainable living, quality of life guidelines.
2) Establish a parliamentary committee to examine structural change required to deliver more cost-effective and better governance of Australia.
Posted by Quick response, Wednesday, 6 October 2010 1:24:20 PM
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Divergence

I agree, correlation is not the same as causation, and if you read what I said I didn’t claim any causal link. The article, however, DOES claim a causal link, using spurious statistical analysis to support its claim that “These figures clearly indicate that far from improving the lot of ordinary citizens, population growth by exceeding economic growth is, on average, making each citizen worse off.” This is completely wrong.

For what it worth, I also agree that if there is a causal link between regional population growth and per capita economic growth in Australia, the direction of causality is more likely to be from economic conditions to population growth, as interstate and overseas migrants flow disproportionately to States with strong economies. This is clearly not, however, making residents of the economically stronger states “worse off”. It may also make a positive contribution to growth in per capita GSP where there are skills and labour shortages, as we currently have here in WA.

The world competitiveness index is not a measure of economic welfare, and is largely determined by policy settings and institutions, so I’m not sure why you think it’s relevant. Its identifies the six main impediments to competitiveness in Australia as (in order):

- access to finance,
- restrictive labour regulations,
- tax rates,
- inadequate supply of infrastructure,
- inefficient government bureaucracy
- tax regulations.

None of these appear to me related to population issues except perhaps infrastructure, and I’d argue that our low population density contributes to the problem of providing adequate economic infrastructure.

http://www.weforum.org/documents/GCR10/index.html

Correction: in my earlier post I should have written “...with 2008-09 data unlikely to be published until late November or early December” not 2009-10. GSP data are woefully out of date by the time they are published.
Posted by Rhian, Wednesday, 6 October 2010 1:47:17 PM
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Curmudgeon,

Mass migration was cut off in the US between 1921 and 1965. See the graphs in

http://www.cis.org/1965ImmigrationAct-MassImmigration

Some of the restrictionist sentiment that led to the cut-off was based on racist ideas, but a lot was due to economic fears, both from workers worried about immigrants driving down wages and from the upper class worried about radicalisation of people lower down on the food chain. This was the era of Anarchist bombings.

So far as elections are concerned, not all major party politicians are growthists. Kelvin Thomson certainly isn't. His 14 Point Plan is excellent. The Greens aren't ideal, but are unlikely to be as bad on this as the major parties. It is always possible to hold one's nose and vote for the Far Right, as more and more people have been doing in Europe. If all candidates are growthists, a protest can be made by putting the sitting member last. This may well make him or her lose the election in a marginal seat, hopefully before he qualifies for Parliamentary superannuation and other perks.
Posted by Divergence, Wednesday, 6 October 2010 2:07:45 PM
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