Watch CBSN Live

Is Australia Ruining Its Chances?

Australians worried about an unsustainable population and looming food crisis should take a look at the rest of the world. The economic news is good, so shouldn't the country be planning for opportunity?
OECD forecasts reckon that by 2050 Australia's population will reach 28 million, quite a bit short of Kevin Rudd's goal of a "big Australia" of 36 million people. The OECD figure is in line with the growth of the world total; we'd remain about 0.3 percent of the total, KRudd's figure would elevate us to 0.4 percent.

Australia's growth is held back a little because we don't procreate as much as some. In 2008, women aged 15 to 49 in Australia had 1.9 children, compared to 2.0 children in the UK, 2.1 in the US and 2.2 in New Zealand. I'm not sure why, perhaps the TV is better here.

To make up for the lack of action in the bedroom, Australia must continue to import people. Why? Well, in 2007 our permanent intake was 189,000 people (equivalent to 0.9 percent of the population), yet the total population over the year remained virtually static. If we imported fewer people, our population would go backwards. Fewer people mean less tax revenue, fewer purchases and a higher proportional liability for old-age pensions.

Even with our relatively high migration levels to date, the OECD forecast sees the US population growing at a rate that outstrips the rest of the English-speaking world --- up 40 percent over the next 30 years. That's despite a migration rate that half that of Australia (proportional to the population). They clearly expect migration to continue unabated, whereas Australia's figures indicate a slowing of the intake.

Australia's population growth over the next 30 years (29 percent) falls short of the US, but exceeds growth in Canada (24 percent), the UK (23 percent) and New Zealand (18 percent). All of those countries will suffer the economic consequences: whilst Australia's GDP is forecast to expand 71 percent, Canada (52 percent), New Zealand (51 percent) and UK (37 percent) all fall a long way behind. Australia already enjoys a GDP per capita higher than any of these countries --- it looks like the gap might widen further.

So what of the US? Their GDP per capita was $46,000 in 2009 (according to the World Bank) --- 9 percent above Australia. Their population and GDP will grow at roughly the same rate, whereas Australia's GDP will grow 1.7 times faster with far slower population growth. At some point, fairly soon I suspect, Australia will exceed the US rate of GDP per capita.

Why then, when it all seems like good news, do so many Australians believe their country is under siege from migrants, has a population that is out of control and needs the government to return the budget to surplus as soon as possible. It seems a strange approach for a country enjoying boom times. Instead, what's wrong with investing in infrastructure through public sector borrowing, spawning new industries and managing further population growth to expand the domestic market for goods? You know, the China approach.

Let us know your thoughts in the Talkback section below.

Data sources:

See also: Read more By The Numbers articles by Phil Dobbie here.

View CBS News In