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Five reasons Australia should be ‘big’

Published in SBS World News online (Sydney), 26 October 2011
http://www.sbs.com.au/news/article/1599781/Five-reasons-Australia-should-be-big

Economist Dr Oliver Marc Hartwich is an advocate of a ‘big Australia’. Here are five reasons why he thinks the nation has nothing to fear from a growing population.

1. Australia is growing whether we like it or not

There are three factors that determine the size of our future population:
– How long Australians are going to live.
– How many children we will have.
– How many people move to and leave Australia.

Government cannot do much about much about an improving life expectancy – nor should it. Government cannot determine how many children we will have, either. And again it’s not the government’s business anyway.

This leaves migration as the only lever for population policy. However, it is difficult to fine-tune our net migration intake, nor would it be desirable to reduce migration at a time of near full employment and reported skills shortages.

Even if we cut migration by half we would still see Australia grow to almost 30 million by 2050. This is to say we better get used to the idea of a growing Australia. It is going to happen anyway.

2. Australia has a good track-record of dealing with migration

No other country in the world has managed to integrate its migrants so well as Australia. Australia’s migrant community is, on average, less often unemployed or on benefits than the Australia-born population.

Migrants’ children do well in school tests, and migrants are not more criminal than the rest of us.

Australia is one of the most attractive destinations for potential migrants and through the points system in immigration we can continue to attract migrants who will bring the skills and qualifications that this country needs.

3. It’s easier to grow than to shrink

Most European countries would love to swap their demographic problems for ours. Many European societies are ageing and shrinking. By the middle of the century there will only be two working-age Europeans left to care for each European pensioner.

Thanks to Australia’s strong population growth this so-called dependency ratio will remain much lower in Australia for a long time. The result is less pressure on social and health services and a stronger fiscal position. Australia can use this chance to prepare its social security systems for the long-term prospect of an aged population.

4. Population growth will benefit the economy

Australia’s growing population will benefit the economy as consumers, savers, entrepreneurs, and workers.

More people will make it possible to increase the division of labour.

It will open up new opportunities for niche products and services, which otherwise could not be offered.

It will also make it possible to provide better mass transit infrastructure for which we currently lack the capacity.

5. Australia is in the most dynamic world region of the 21st century

The ‘tyranny of distance’ is giving way to an ‘opportunity of proximity’. The fastest growing region of the world is Asia, in which there are hundreds of millions, or rather billions, of people who have escaped poverty and joined the global middle class.

What is happening in front of our eyes and not far from our borders is one of the greatest economic transformations that the world has ever seen.

Australia has the chance to be part of this growing Asia Pacific region. But we are not going to achieve this by sticking our heads in the sand, yearning to halt or reverse these changes.

Population growth is going to happen, and it will ensure that Australia can fully play its role in the region.

Jessica Brown and Dr Oliver Marc Hartwich are Research Fellows at the Centre for Independent Studies. Their reports ‘Populate and Perish? Modelling Australia’s Demographic Future’ and ‘Why a growing Australia is nothing to fear’ are available here.

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