Net migration and population: The past and future

Matt Butlin’s set of slides last week got me thinking about other immigration related historical data.

Too much commentary is based on numbers out of context. For example if you are talking about population and you only look at the number of immigrants arriving, you will miss certain things. When discussing population you want to account for people who leave Australia (emigrants) also. Then, to better understand the relative contribution of the number of net migrants (immigrants – emigrants), you can compare the figure to the population at the time against history. This leaves us with: net migration divided by population as a good indicator of the migrant contribution to Australian population. Here is that figure, graphed since 1925:
Nompop19252011(Source: ABS)

Before I started working at the immigration department, I thought of the post-war immigration programs as large but not massive. In addition, I thought the boom of immigration continued right up until the oil shock recession in 1973.

You can see in the graph, both of these beliefs weren’t correct. 1949 and 1950 literally jump off the page when looking at net migration as a contribution to Australian population. At 149,270 and 153,685 people respectively, each year was nearly two per cent of the population, something which hasn’t occurred since. We also see the rate of growth start to decline before 1960, as the government slowly draws back from further increases in immigration.

The next graph shows the historical data and includes the forecasts for net migration divided by population (drawn from the ABS and immigration department). The forecasts are to the right side of the grey line:


I’m a big Australia kind of guy and these figures should be pleasing. The graph shows in the next four years, if the forecasts hold up, Australia is entering unprecedented territory with regards to trend population growth from net migration. This does not mean our population is growing faster than at anytime in the past. Fertility rates are substantially lower now than in the 1950s, meaning total population growth was faster in the post-war period. But this does mean is that the trend for population growth from immigration is higher than at any point in the 20th century. Indeed, if the forecasts prove accurate (a big if), it would be the first time ever to have five consecutive years of above one per cent population growth solely due to immigration.

If you look at policy decisions instead of rhetoric, this should not be surprising. Despite the talk of sustainability, no government in the last two decades has introduced or reformed any piece of immigration legislation or policy explicitly designed to restrict immigration to Australia (outside of asylum policy, which is doesn’t even play a marginal role in this debate). At every step along the way, Liberal and Labor, expansion has won out of restriction. Larger permanent migration programs and the introduction and expansion of temporary migration programs (students, 457s and working holiday makers) combined with a growing economy has created this trend growth.

Undoubtedly, the next economic slowdown will change the trend and its likely in the future there will be some reform to temporary migration programs which may slow future population growth.

Yet what is displeasing, and should be concerning to any bigger Australia advocate, is the complete lack of attention this growth receives in terms of the challenges presented. This isn’t theoretical anymore. We shouldn’t be arguing over 36m by 2050 anymore because with every passing year, it becomes more certain this is likely a floor figure instead of the best estimate. Current trends suggest 38-40m instead. A lack of planning, coupled with a popular backlash, will likely result in rushed, populist reforms to immigration programs, helping no-one.

The disconnect between urban policy at the state level and immigration policy at the federal level has arguably never been more acute. NSW and Victoria are the big winners from immigration yet sprawl and infrastructure capacity are serious issues in need of serious innovation. We could start with a better discussion about land taxes…

(Note: In the second graph, I used Scenario C for population estimates from the ABS, the highest growth estimates. See here for the assumptions behind these scenarios. This is because I believe this to be the most likely scenario given current immigration forecasts for the next four years. Using Scenario A or B would have generated higher trend growth for net migration divided by population, given the lower dominator)

(Note 2: Data for the graphs)


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