Population futures for Australia: the policy alternatives

Abstract

In recent years, there has been intense debate about the population size to which Australia should aim in the 21st century. Some argue for a much lower population than we have now. The environmentalist, Tim Flannery, for example, has suggested that Australians might opt for a future population of between 6 and 12 million people. Others argue for a considerably larger population. For example, former Prime Minister, Malcolm Fraser, would like to see a population of 45 to 50 million people in the next 50 years. This paper shows that the targets specified by both Flannery and Fraser are unattainable in the next 50 years because such targets can only be reached through levels of immigration which are impossibly negative on one side or impossibly large on the other side. The demographic reality is that the options for Australia's future population size are much more limited than the options that are considered in popular debate. The limiting factor is our low, and falling, level of fertility. The powerful demographic effects of low fertility have been little appreciated. One of the aims of this paper is to provide such an appreciation. We show that with zero net migration, Australia's projected levels of fertility and mortality would lead to the population rising initially to 20 million and then falling slowly in the first half of next century and rapidly in the second half. The population would age dramatically and the size of the labour force would fall markedly. We argue that these are not desirable outcomes and that, as a consequence, we should seek to have immigration levels which, at the least, lead to zero population growth. A level of net annual migration of around 80 000, in combination with our low fertility rate, would lead to zero population growth in about 25 years and a population size of about 24-25 million. Given current trends in fertility and mortality, annual net migration to Australia of at least 80 000 persons is necessary to avoid spiralling population decline and substantial falls in the size of the labour force. This level of annual net migration also makes a worthwhile and efficient contribution to the retardation of population ageing. Levels of annual net migration above 80 000 become increasingly ineffective and inefficient in the retardation of ageing. Those who wish to argue for a higher level of immigration must base their argument on the benefits of a larger population, not upon the illusory 'younging power' of high immigration. The level of about 80 000 is close to the average net migration of the past eight years and of the past 50 years. Thus, if present settings do not change, we are headed towards this outcome. There is an upper limit to annual net migration. We argue that there were difficulties in the late 1980s when net migration rose for just two years to over 150 000 per annum. While it is not possible to be prescriptive, a sustained net migration level of 120 000 per annum is at the high end of what Australia seems to be able to manage. Furthermore, it is little understood that the Australian Government has only a very limited degree of control over the final level of annual net migration. It has almost no control over movements out of the country and little control over long-term (as distinct from permanent) movement into the country. Even major components of permanent movement into the country (New Zealand citizens and spouses or children of Australian residents) are largely beyond the government's control. That is, it is not possible for any Australian government to precisely determine the level of annual net migration. For example, net migration was 72 000 in 1997 and 112 000 in 1998. The increase of 40 000 between these two years was not the outcome of deliberate government policy. If the desirable range of annual net migration is as narrow as 80 000 to 120 000 and if government is unable to determine this level with any degree of precision, heated debate about immigration levels seems pointless. In these circumstances, the major parties should reconsider the advantages of a bipartisan approach to immigration policy. Our analysis in the paper is based on the assumption that the fertility rate in Australia will not fall below 1.65 births per woman on average in the long term. In our view, population policy for Australia should revolve around ensuring that fertility does not fall below this level.