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The Forum > General Discussion > Solving the Housing Dilemma

Solving the Housing Dilemma

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Fester, the connection between population growth and infrastructure costs was yours, not mine.

>>I always thought that for observational studies, correlation does not imply causation<<

True, it does not. But to support your argument, living costs would need to rise alongside population growth, which they clearly have not done in the past. While they may or may not do so in the future, one would need some additional factor to appear, for example a "saturation point", to cause the marginal cost of one more person to increase the total burden by more than the average of them all.

You offer no evidence to suggest this has happened, so all we have to go on is history, which tells us that more people has not led to higher per capita costs.

Your sneer...

>>I guess that is why you unquestioningly present an article claiming that 6 1/2 billion people could live in Texas<<

...simply shows that you chose to take the observation literally, when Sewell was merely trying to bring an element of simple perspective to the problem that most people have in visualizing six and a half billion people. Maybe it would have helped if I used New South Wales, which might possibly make it easier for to visualize than Texas.

Which is in the United States.

Of America.

>>The Productivity Commission found there to be essentially no economic benefit from population growth in Australia, and the fact that huge infrastructure debts are being incurred to cope with increasing populations tends to support this view<<

A citation would help at this point, so that we can understand the force of the word "essentially" in the phrase "essentially no economic benefit", and some quantification of the hugeness of the "huge infrastructure debts".

If you are referring to the "Economic Impacts of Migration and Population Growth" that appeared in May 2006, I should point out that the first paragraph of its media release included the statement:

"Increasing skilled migration would make a positive overall contribution to Australia's future per capita income levels"

So presumably you are thinking about an entirely different report.
Posted by Pericles, Monday, 16 July 2007 7:39:48 PM
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Fester,unfortunately we have to increase our population to justify and consolidate our claim to such a vast continent with such a minute population.We will not always be able to rely on the US for security.

Australia will not become a viable autonomous country with the present pop status quo until we have a population of at least 60 million.

Ancient China at it's nemisis had a pop of 20 million.They now have 65 times that number.We need more people and more affordable housing to bring security to the great lifestyle that too many people now take for granted.
Posted by Arjay, Monday, 16 July 2007 9:27:14 PM
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As I sasid earlier, you are all waffling around the point.
If you borrow on two incomes you need two incomes to repay.

The price of houses will always match the amount of money available.
Until the two income borrowing is removed houses will be unaffordable
to families on one income.

Nothing at the edges will change that !
Posted by Bazz, Tuesday, 17 July 2007 8:59:58 AM
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Pericles

Had you looked at the PC Report a little more closely, you may have noted that people will work longer at a lower hourly rate. You might also have noted that the existing population would not earn more, and that the study did not attempt to factor in infrastructure costs or increased utility charges, such as water.

That you seem blind to such things interests me less than what effects on living standards you see from increasing Australia's population markedly. I am unaware of any great mass of evidence, theoretical or observational, to suggest any great benefit to Australians from such an endeavour. So an advocate of population growth seems to be an advocate of a journey into the unknown. What do you do if the journey turns out badly? Shoot people?

A drastic cut in immigration at present would be disastrous, but only because of Australia's parasitic reliance on skilled migrants.

Arjay

Should your premises be correct, I could only agree with you. But I have doubts about whether 60 million Aussies would enjoy a better life than today. I also suspect that many growth advocates are more interested in the short term.
Posted by Fester, Tuesday, 17 July 2007 6:41:00 PM
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Good question Fester, thanks for asking.

>>That you seem blind to such things interests me less than what effects on living standards you see from increasing Australia's population markedly<<

Leaving aside the "markedly" - which you probably added as an afterthought anyway - a normal and steady increase in population levels will underpin our continuing economic growth and prosperity.

To quote from the May 2006 "Modelling The Economic Impacts of Migration And Population Growth" from Monash, which was asked to "identify how the labour market might absorb the increase in the number of migrants" following the government policy proposed in a previous paper:

"For the first four years of the policy there is a small (but growing) positive deviation... in real (consumption price deflated) GNP. The positive deviation in real GNP per capita then grows steadily from 2009 onwards [to 2025]."

Interestingly, this finding is consistent with the experience of most other developed countries. The UK has, for example, experienced a significant influx in recent years from Eastern Europe, particularly Poland. Despite this - or in fact because of it - their economy has continued to grow and prosper. Also noteworthy is that during this period, those immigrants have also boosted their "home" economies by sending them billions of pounds. Win/win.

Now it is my turn to turn the questions around.

What effects on living standards do you see from decreasing Australia's population markedly?

(You can ignore the "markedly" too, if you like.)

There's no need to model your answer with the same diligence and professionalism applied by Monash. But it would be useful if you could include some idea of how this population reduction would come about. If it is through "natural attrition", some comments on the impact on our economy of an aging population would not go amiss.
Posted by Pericles, Wednesday, 18 July 2007 6:11:06 PM
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Thanks for that, Pericles. Whether there is any plus or minus from population growth is a very tough question, and dependent on many factors. The survivors of the plague in Europe enjoyed improved living standards. Continued population growth in Australia will see the taxpayers burdened with a huge infrastructure debt, and ratepayers will face this as well as greatly increased water charges. This is happening, yet you trust that we will all be better off because of an economic study, probably one heavily reliant on computer modeling? Would you give the same credence to global warming models?

If Australia could support 80 or 100 million people then I think that would be great. But I dont see this as being possible without substantial technical progress, and I would like to see the technology developed first.

To give an example, I note that you raise the question of how to support the elderly. As you would know, if you want to maintain the same average age of a population, this would involve the ultimately unfeasible strategy of growing the population exponentially. But if you consider the elderly as a subgroup of those incapacitated by disease, then you are really looking at a technical challenge. Medical breakthroughs in the treatment of debilitating diseases like arthritis would bring large economic benefits, as did the development of a cure for tuberculosis. You might also note that the increasing numbers of older Australians coincides with reducing numbers of young Australians, so it might be relevant to offset the cost with the saving from not raising children.
Posted by Fester, Wednesday, 18 July 2007 7:23:06 PM
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