'Big Australia' is going to get a whole lot bigger

The latest population projections from the Australian Bureau of Statistics (ABS), released last week, suggest Australia’s future population growth will be considerably greater than previously indicated. As a result, Australia’s population debate should move away from simplistic pro or anti-population growth posturing and towards the question of: “how much is too much?”

The ABS produces three main series of projections in relation to differing input assumptions for future fertility, mortality and migration levels. The projections show the population growing to between 34.3 and 41.9 million in 2050 and between 42.3 and 69.5 million in 2100.

These future population sizes are significantly larger than the equivalent figures from the previous ABS 2008 projections.

The “medium” and “high” variant projections for 2050 also exceed the 35.9 million projected by the 2010 Intergenerational Report (IGR3, which sparked the so-called “Big Australia” debate), and the 35.3 million “base case” scenario in a recent Productivity Commission report.

Bipartisan support for high immigration

The major reason for these larger projected populations is their incorporation of higher levels of net international migration. Reflecting forecasts by the Department of Immigration and Citizenship and ranging from 200,000 to 280,000 per annum, these migration levels are over 33% higher than those the ABS adopted five years earlier, and also significantly above the 180,000 per annum used in IGR3 and the Productivity Commission’s “base case”.

The assumption of a constant annual number for net immigration ignores the potential implications of an increasing population for the demand for skilled migrants and family migration.

The high levels of immigration during the Gillard government era were at odds with Gillard’s expressions of opposition to a “Big Australia” made prior to the 2010 election. Then-opposition leader Tony Abbott also expressed reservations about population growth but support for immigration and a larger population.

More recently, Abbott has adopted a pro-population growth stance, while opposition leader Bill Shorten has been clearly supportive of high levels of immigration. There appears little reason to anticipate significant cuts to immigration in the near future.

Birth rates

Both the current and the previous ABS projections assume the total fertility rate or TFR will ramp to the same long-run levels of 1.6, 1.8 and 2.0 births per woman. However, the implications of fertility for population size are magnified gradually over time by the current projections’ higher immigration levels.

Considering the 2012 TFR is 1.93, the recovery in the TFR since 2001 – and the possibility the proposed new paid parental leave scheme could affect fertility (even if only slightly) – the higher of the three fertility scenarios appears the most plausible.

In his book Battlelines, Tony Abbott concurs with Malcolm Turnbull’s call for fertility to be closer to replacement level. Since 2001, the gap between Australia’s TFR and the replacement level – which would lead to long run zero growth under zero migration and constant mortality – of 2.07 has more than halved with the increase being concentrated in the later reproductive ages.

With each of the successively smaller increases required to further halve the gap to replacement level, the very long-run implication for the size of the Australia-born population of continuation of the annual levels of fertility, mortality and migration more than doubles.

The implication of continuing support for fertility levels to be closer to replacement levels would appear to be that either a future very big Australia would abandon net immigration, or a certainty that there is no long run limit for Australia’s population.

Ageing beyond ‘living longer’

The increasing life expectancy also contributes to the projected growth. The forecast increases in life expectancies the ABS uses for its “low” and “medium” variant projections are considerably lower than those published in the peer-reviewed academic literature and the forecasts used by IGR3 and the Productivity Commission.

This projection series presents conservative estimates of the population implications of the migration levels they use. Of its main projection series, the ABS’ “high” variant would appear to be the most plausible for the longer run.

The ABS projections show the inevitability Australia’s population ageing, with the numbers aged over 65 rising to between 20.9% and 22.5% in 2050. Most of the increase would occur even without further improvements in life expectancy, reflecting lower birth rates and the legacy of past improvements in mortality.

Higher immigration partly explains the magnitude of population ageing as being somewhat less under the current ABS projections than under its previous projections.

City limits

Arguably, the most challenging aspects of the projection results are the future sizes of the largest cities. The projected populations in 2050 range between 7.4 and 7.9 million for Sydney and between 7.0 and 8.4 million for Melbourne. One fear is that these larger populations will aggravate traffic congestion.

Recent increases in births will have a flow-on effect on the numbers reaching the driving ages from the latter part of the current decade onwards. With higher levels of immigration adding to numbers on the road, the need to improve transport infrastructure will be all the more pressing.

The tip of the iceberg

The latest ABS projections show the substantial long-run implications which fertility and migration near the current levels and ongoing improvements in life expectancy would have for Australia’s population size over the period to 2101.

The projected growth over this period is just the tip of the iceberg compared to what would result from sustaining such patterns over an even longer period.

Nick Parr receives funding from the ARC and the Institute of Actuaries Australia.

This article was originally published at The Conversation. Read the original article.