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Infrastructure Australia Population Immigration

From Kohler on the ABC about immigration, population and infrastructure in Australia:

“Infrastructure deficit puts us on a road to nowhere. There’s every indication we are approaching a national emergency when it comes to infrastructure, writes Alan Kohler.

One of Australia’s many political ironies is that the national effort to Stop The Boats has disguised an immigration boom.

Immigration has increased five-fold since the Howard Government came to office and with a big increase in births over the past ten years, in part also due to Howard Government policies, Australia’s total population growth has doubled and is now about three times that of most other developed countries.

The Abbott Government’s ambitious paid parental leave project will ensure that the baby boom goes on and the pressure for immigration from India and China – apart from New Zealand the two leading sources of migrants – will only increase as well.

Last year Australia’s population grew 1.8 per cent, or 407,000, compared with 0.7 per cent for the United States, 0.5 per cent for Europe and China, and minus 0.1 per cent for Japan.

The extra 400,000 or so people a year is the reason Australia has not had a recession for 23 years and it’s why GDP growth is now around 2.5 per cent. On a per capita basis, Australia’s economic growth is among the weakest in the world, and per capita consumption growth is zero.

In other words, population growth is the only reason it looks like the economy is growing.

One obvious consequence of Australia’s population boom, apart from disguising a fundamentally weak economy, is rising house prices because not enough houses are being built as a result of restrictive planning laws and high construction costs.

Not enough infrastructure is being built either, to the point where a national emergency is approaching.

There is far too much focus on politically motivated big ticket infrastructure projects that soak up the available funding, and not enough on what you might call business-as-usual infrastructure…..

…. With Australia’s population growing the way it is, infrastructure has become as important to the economy as monetary policy – if not more so.”

At face value this all seems true and correct, however:

  1. Kohler like in media most accepts the “population growth rate” is due to permanent immigration.
  2. Population definition used since definition change in 2006 (UN) has included net overseas migration NOM which defines resident as anyone who is in Australia for 12/16+ months, not just Australian permanent residents and citizens.
  3. Accordingly this sweeps up temporary entrants such as students, 2nd year backpackers, 457 visa temp workers, New Zealanders, returning Australian residents and dependents.
  4. The permanent immigration program of a bit over 200k merely stabilises the population which is ageing and declining in fertility.
  5. The solution like other countries is to use temporary residents such as fee paying students with limited work rights to subsidise education and local students, backpackers are also on limited work rights and paying taxes, while 457 visa workers also pay taxes, yet only a minority will be eligible and able to apply for resdiency, therefore they do not have access to many services let alone state pensions.
  6. This ‘churnover’ not only subsidises the permanent population by paying taxes and not drawing benefits, they reinforce the tax base to support the permanent population.
  7. Finally comparing Australian citizens and permanent residents with temporary residents is invalid, like comparing apples with oranges….. and the temps are part of the solution.

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