When GDP per capita flatlines or declines it is a sign that population growth is not helping. That is lost on business lobbyists who see immigration as a driver of relentless economic growth. Politicians are easily blackmailed and open the doors to more people. It's not just the building industry but what I'd call the Concern Industry who bring in unskilled non-English speaking people to make themselves feel good. Meanwhile those already here get slightly poorer or have less amenity. In future the criterion should be whether the influx is likely to keep reducing per capita GDP. That could mean no more net migration.

Globalisation, mass immigration and compulsory superannuation all lower wages. A recent report showed that Keating's super scheme takes $20 billion away from wages.

Yes, because flawed trickle-down economics can't stand on its own to increase demand!

And needs pernicious population growth to prop up demand. And similar to most ponsey schemes inasmuch as you need to be pushing it in at the margins in order to get something back out.

And done by also allowing debt to ballon and ballon until it can ballon no longer! Thus we have a thirty-plus year infrastructure deficit and over crowed gridlocked cities not fit for purpose.

Made manifestly worse because those in charge WILL NOT address entirely unnecessary and counterproductive poverty. But create or maintain it to keep a lid on wages growth! It's the sort of economic management you get when the inmates have taken over and are running the asylum!

Moreover, like conspiracy theorists, convinced they are right and on the right track and helped by the electoral system that obligates the dullards to also vote and basically elect various fundamentally flawed governments with mountainous flawed policy paradigms ad managed by even more flawed power junkies!

And I know you know what and who they are.

Were this not demonstrably so!? There'd be very different outcomes!
TBC. Alan B.

Cont.
If we want to draw down debt all while growing the economy and wages growth!?

Then we are left with no other choice than to make what money is in the economy do seven times more work than the current economic management model allows.

And not possible with our current foreign investment and the insane privatisation of our best income-earning assets!

Only cooperative capitalism allows every one dollar to take full advantage of normal economic flow on factors and do the work of seven or more. And as we embrace more and more funded and facilitated cooperative capitalism we can garner a larger tax revenue and attack endemic poverty. which also translates to large and larger budget surpluses!

Co-ops were the only free market, private enterprise business model that survived the Great depression largely intact! And because they were and remain the most efficient and productive business model!

Add on MSR thorium and power prices as low or lower than 3 centsPKWH Plus deionisation dialysis desalination!

Moreover, tax reform manifesting as real root, branch and twig reform, i.e., A single, stand-alone unavoidable, flat tax of just 15%.

Plus also embrace SELF CANCELING social credit as our non-debt creating funding mechanism! Then no nation on earth, not replicating our economic model, could compete with us. AS A WORLD LEADING MANUFACTURING ECONOMY!

We need to embrace automation and advanced technology and ASAP! WE HAVE NO TIME TO LOSE!

And when we do all the above. Replete with absolutely essential decentralisation assisted by the rollout of rapid rail!

Both economic growth and true self-reliant independence (SECURITY) will be ours and needs to be done yesterday!

We just do not need more than natural population growth to grow the economic pie. Just the entirely missing rationalism and be attacking and removing poverty, not with charity or handouts but with wealth creation opportunities for all!

And only available via some form of the above!

Can't cherry-pick but need the whole package/plan!
Alan B.

Great article, Eric, you say it all. Even so, nothing is going to change until more people start putting the major parties (and the Greens) last, with the sitting member last of all. The politicians will quickly lose their enthusiasm for Big Australia and big political donations (aka bribes) if it means being kicked off the Parliamentary gravy train. Their business mates can give them election funding and cushy, lucrative jobs after they leave politics, but they can't force you or me to vote for them.

Thanks Divergence. I fear you are right about the politicians. We in the environmental "movement" love to complain that politicians don't think long term, they only think about the next election, but they build train lines and toll roads that have a 50 year life. I suppose the difference is you can ride the train in a few years, the impacts of high population aren't felt for a long time. When they are felt there is a lot of other white noise, "bad planning," "over consumption," even global warming diverts attention.

I think the impacts of population growth are broader than the impacts of global warming, and population stabilisation would reduce global warming but the climate change protesters and the New York Times don't see it that way. Thanks for commenting

As long as our jobs for life and generous pensions, bureaucrats have no skin in the game and politicians seem to be serving/advantaging powerful vested interest and our economy is all but welded to the USD, we have as much control over outcomes as a leaf in a raging torrent!

Simply put if the decision-makers are devoid of vision or suffer any consequences of THEIR decisions It'll b business as usual and debt growing and Australia going ever further backwards!

If nothing real changes? Then all we will have is the same old by the same old cliche!

One of those now essential changes has to be fastening our currency to the gold standard, Rather than have to be completely dependant on the whim and caprice of fundamentally flawed fiscal illiteerates!
Alan B.

Great article Eric - and especially good to refer back to the insights of the Productivity Commission so many years ago. Just two comments:

1) As you say, GDP per capita may sound a better measure than GDP, and in some ways it is. But in the end it is still just the madness of GDP with all its deeply inadequate measures, simply divided by the number of people in the population. It's no surprise it keeps going up, but that means very little to most of us, as you point out. We need other measures in parallel, such as GPI (the Genuine Progress Indicator).

2) As Al Gore says, representative democracy has been hacked by large vested interests. It has not worked for most people nor for the commons for decades. We need to phase in participatory democracy and phase out political parties. There are lots of excellent and successful trials of this approach happening around the world, and we need to make it mainstream in Australia. It will be long road, and bitterly opposed by selfish vested interests who couldn't care less about growing inequality or trashing the planet. But it could be a peaceful revolution instead of a violent one.

So true, the article, but why target immigration when the majority of population-growth comes from the baby-making industry?

No it doesn't Yuyutsu. With out immigration our population would be declining.

Baby making industry. Wow there's an expression designed to take the joy out of having kids. For the past 13 years immigration has been between 50% and 65% of Australia's population growth.

https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1819/Quick_Guides/PopulationStatistics

Hasbeen you are probably thinking that since Australia's fertility rate has been below the 2.1 replacement since the 1970's that would mean our deaths were greater than births, but that isn't the case, because there were so many young people to start and young immigrants moved in.

https://data.worldbank.org/indicator/SP.DYN.TFRT.IN?locations=XD-AU

Poit - Whatever methods we take to bring about a change will require the efforts of an engaged and intelligent citizenry. I hope we have that.

I'm encouraged by the letters to the editor I read and comments on articles online. I'm not encouraged by the recent election except that the minor parties continue to make sure there is no majority for the majors in the Senate.

Suppression of wages and increasing population have been a part of neo-liberal policies for the past four decades. It's their way of creating economic growth and development. A classical example is my home town of Sydney: the LNP government has a policy of bringing in large numbers of cashed-up migrants who generate demand requiring development in the infrastructure and building industries as well as creating local employment. Problem is growth in migrant intake is running far ahead of the economic capacity to cater for them resulting in overcrowded transport, insufficient and expensive housing, and rising prices in food and commodity. In other words neo-liberal policies are unsustainable for the long-term interests of the city.

While I fully accept and agree that immigration is a nett detriment for the welfare and wealth of those already here and that curtailing such immigration would benefit the working and middle classes somewhat, if your main concern is the wages of the workers perhaps you could look elsewhere for solutions.

"The [US] Labor Department’s June jobs report showed average hourly earnings for private-sector workers increased 3.1% from a year earlier..."

This compares to increases in Australia of around 2.2%.

Australia hasn't had 3% wages growth since 2012.

Additionally the US wages growth is roughly double the inflation rate, whereas Australian wages are barely keeping up with inflation.

So you want to improve wages - look to the US. Massive cuts to regulations, business friendly policies, significant tax cuts etc.

But don't hold your breathe.

mhaze there are of course several factors that go into wage increases. Interestingly you will find that population increased by 1.64%, 2016 to 2018 in Australia, and only 0.63% (2.6 times as much) in the US. Also immigration was 2.8 times higher in Australia than it was in America (1.01% v 0.35%), plus illegal immigration is down in America.

https://databank.worldbank.org/indicator/SP.POP.TOTL/1ff4a498/Popular-Indicators#

https://www.migrationpolicy.org/programs/data-hub/us-immigration-trends

https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/3412.0Main%20Features42017-18?opendocument&tabname=Summary&prodno=3412.0&issue=2017-18&num=&view=

I'm sceptical on the wisdom of reducing taxes on the rich
https://www.nytimes.com/2019/08/01/opinion/trump-economy.html

Dear Hasbeen
You don't have to worry that without immigration we'd run out of people overnight because of low fertility.
Last November's ABS projections show that with zero net overseas migration, and a total fertility rate of 1.8 (ie well below 2.1), and high life expectancy, natural increase will keep on adding to our numbers until at least 2055.
As Eric explains, we still have a relatively youthful population. This means that there are a lot of young and youngish people who haven't yet had children. This provides momentum for growth from natural increase within our age structure.
Congratulations to Eric on a fine article.

Those unskilled migrants already here will ensure the population growth will continue.
It's merely the greedy white Australians who are so selfish that they choose to remain childless.

For those like individual and Jane Grey who are worried about population decline I have only one thing to say: STOP WORRYING! because there are tens of millions of Chinese signing up to come here creating a new Sino Australia. Australia definitely has a future; it's just not our future!

Our political class has embraced mass immigration as a crude way to inflate aggregate economic growth numbers. To quote Alan Kohler: "Australia’s actual national economic strategy, as opposed to the pretend one, is to simply add numbers – not to encourage jobs and growth through tax cuts – and it has been since 2005, when John Howard doubled average immigration from 100,000 per year to 200,000.”

Of course, as the author of this piece rightly notes, the Population Ponzi model is failing to lift the living standards of incumbent residents. Per capita incomes are going backwards. Our labour market has been flooded, leading to increased job competition and stagnant wages. Our cities have been crushloaded and are now struggling in terms of infrastructure, services and housing. Australia’s infrastructure deficit has fallen badly behind over the past decade and will continue to do so under the current mass immigration program, thus further eroding residents’ living standards.

Economist Leith van Onselen debunks some of the stupid pro-high immigration/Big Australia arguments here: http://www.macrobusiness.com.au/2018/02/mb-submission-governments-migration-program-review/

The majority of Australians are opposed to high immigration and a bigger population but Liberal, Labor and Greens politicians continue to ignore public opinion. Bob Birrell and Katharine Betts from the Australian Population Research Institute offer some insights into this glaring public-elite divide over immigration and population growth in this interesting report: http://tapri.org.au/wp-content/uploads/2019/04/Tapri-survey-2018-final-report-April.pdf

It makes you wonder what kind of 'democracy' Australia really is when the major parties are able to pursue such thoroughly anti-democratic policies.

Thanks very much FrankU. I highly recommend the Leith van Onselen / MacroBusiness article for anybody reading my article. It says most of the things I wanted to say in more depth than I said them and hits a few I didn't say really well. The section on GDP/capita v. Ageing workforce and labor productivity v ageing workforce is brilliant. I love how he nails the quotes from Malcolm Turnbull and Bernard Salt. They never thought they had to present data, except GDP is going up.

And how good is this quote: The Australia Institute’s chief economist, Richard Denniss, the very purpose of foreign worker visas is to “suppress wage growth by allowing employers to recruit from a global pool of labour to compete with Australian workers”. Kabamm

The TAPRI (Birrell and Betts) report is also great. It's long but I recommend just the Executive Summary for busy readers.

On your last point though, the political parties know our version of 'democracy' better than all of us. They know that we won't vote for the minor parties in the house of representatives. Their job isn't to "represent the majority," their job is to win elections. If Labor, Liberal and Greens all support high immigration there is no danger of the high immigration policy changing. We can't just cry that it is anti-democratic (although it seems it is) until we get out and vote them out of office. Lab Lib and Greens know that big business will not support them and the Murdoch press will smash them, so they proceed with their marching orders. I wish I knew how to change that. Hopefully more people like you will vote them out.

We can't just cry that it is anti-democratic (although it seems it is) until we get out and vote them out of office.
ericc,
That's why they ensure that the public Service is so insanely huge, it's their safety net !

Hi Eric. I would also recommend the following recent report by Leith van Onselen and Cameron Murray dismantling the claim that high immigration is needed to offset an ageing population.

Three Economic Myths about Ageing: Participation, Immigration and Infrastructure - http://www.macrobusiness.com.au/2019/04/mb-report-three-economic-myths-ageing-participation-immigration-infrastructure/

Overview:

"Population ageing due to longevity is one of the greatest successes of the modern era. However, it is widely thought to dramatically reduce workforce participation and overall output resulting in significant economic costs.

This widely held view is wrong. Ageing countries have higher economic growth and the improved health and longevity of older people increases their economic contributions.

High immigration is also thought to combat population ageing and be a remedy for these non-existent costs of ageing.

This is wrong. Low immigration can affect the age structure by helping to stabilise the population, but high immigration has almost no long-run effect besides increasing the total population level. This creates bigger problems in the future.

It is also widely thought that simply investing in infrastructure will accommodate high immigration and population growth at little cost.

This too is wrong.

Diseconomies of scale are a feature of rapid infrastructure expansion due to (1) the need to retrofit built-up cities, (2) the dilution of irreplaceable natural resources, and (3) the scale of investment relative to the stock of infrastructure."

In any case, keep up the good work. I hope you'll keep writing on this important topic.

Eric and individual, I totally agree that the voting patterns of Australians are part of the problem. Australian voters tend to grizzle about the state of the country and the behaviour of the major parties but overwhelmingly still vote for them. The major parties know they can essentially do what they want and still get voted back in.

I am heartened that more people appear to be voting for minor parties but we have a long way to go.

FrankU,
The changing of a mentality can only be achieved by changing education. We, as citizens must demand that Teachers attain a much better standard than is the case recently/presently. If they fail to perfom their pay gets reduced, simple ! Teachers should be permanently on probation as should all public servants. This is the only chance for us to get value for Dollars AND a better society ! Being in the public service is a privilege not just a no-effort required career path !

Thank you FrankU (hey that rhymes). This paper by Cameron Murray and Leith van Onselen is very comprehensive. I especially love the comment at the end of Appendix A about the members of the 'growth lobby.'

"The common thread behind Australia’s ‘growth lobby’ is that its members privatise the gains that arise from mass immigration via the expansion of the domestic market and the reduction in wages, while the costs are socialised among the broader Australian community."

I would go even one step further based on the April BCA report "A plan for a Stronger Australia." The BCA wants high immigration and high population growth and they want poor infrastructure planning and construction, so that congestion increases. They are then hoping (and it is all included in this paper) that government will allow Big Business to take over infrastructure planning and construction. Of course, this would be accompanied by massive 'User Pays' fees and charges, as well as a free hand in which projects are approved.

It is very frustrating that the 'growth lobby' doesn't need to defend themselves against reports and papers like the one you've recommended. They just go on saying that the economy will be bad if immigration is reduced and they are rarely questioned.

Dick Smith had a justifiable hissy fit last year when the ABC had a 'panel' full of pro-growth spruikers and implied that it was balanced. When he complained and got a bit of publicity, the ABC defended themselves by totally missing the point and saying they give a lot of coverage to the population issue. Yeah, the coverage is one-sided towards high population growth.

At the SBS I don't think you are allowed in the door if you oppose high immigration.

The growth lobby also doesn't have to even comment on the environmental impacts of high population growth. I guess it's a little too complicated scientifically for the average voter / consumer and they know that voters won't change their votes based on impacts to the environment. I generally agree that voters are more attuned to economic issues.

The growth lobby is plain & simply nothing more than a club of self-serving greed mongers with no regard whatsoever for a better society.

Judith Sloan in the Australian this week:

"At this year’s federal election, there were clear differences in the positions of the two major parties on every significant policy area save immigration on which, except for a few details, they effectively ran a joint ticket.

The Coalition spoke of sending migrants to regional areas; Labor wanted to reduce the number of temporary skilled workers while providing open-slather entry for grandparents. But the parties were in heated agreement in their support for high migrant intakes, both permanent and temporary, and the associated high population growth.

But political support for large-scale immigration does not tally with voters’ views. Support for large migrant intakes has fallen significantly during the past decade. People want immigration cut and slower population growth.

The evidence is in figures collected by Newspoll, Essential Research, the Lowy Poll, the Scanlon Survey and the Australian Population Research Institute. The politicians know what we think. They just act like they don’t.

The lobbying behind immigration is so strong that both parties have concluded the views of ordinary folk can be ignored. These forces include the bureaucracy — check out the Treasury’s reports — big business, property developers, the universities and various interest groups, some ethnically based."

http://www.theaustralian.com.au/commentary/politicians-ignoring-voters-by-supporting-population-growth/news-story/75507098c2885c8307b30f7e476f0f99

Infuriating, isn't it? Our country's immigration program has been hijacked by special interests and ideologues. And ordinary Australians are paying the costs.

I'm happy to see the Australian run with this kind of article. I don't subscribe to the Aus so I could not read the article.

This ABC article says voters are split on immigration. Not sure about the methodology. Voting is still the real test.
https://www.abc.net.au/news/2019-04-24/vote-compass-election-immigration-asylum-seekers/11038070

Yes it is infuriating but it is up to us to do something about it and we don't. We still vote for the big parties in the house of reps and they know we will so they don't bother to change the policy.

Michelle Rowland is my state Member. She had a little coffee get together near my house. About 5 of the 15 people asked her about limiting immigration and she dodged and danced defending labor's policies even in the face of complaints about congestion and flat wages. Nobody there defended high immigration but she acted like it was a 50-50 debate. Very frustrating