Growing concern: population boom expected
Bernard Salt, demographer | September 11, 2008
ABOUT two years after eash census is completed, the Australian Bureau of Statistics produces a set of population projections for all states, territories and capital cities.
This document provides one input to demand modelling by federal and state government departments.
Some states also produce population projections but they generally follow the lead set by the ABS.
In other words, you can't have a state government projecting growth on a trajectory fundamentally inconsistent with the view expressed by the ABS.
The ABS issued a new set of projections last week. It is an important document for anyone in property or, indeed, in business to understand (it can be downloaded at
www.abs.gov.au).
And if you cannot be bothered wading through pages of demographic jargon and reams of figures, here are what I think are the key points.
The previous forecast, issued in June 2004 and based on the 2001 census, shows the Australian population rising from 20.6 million in 2006 to 28.2 million in 2051.
This medium-growth outlook assumed falling fertility and net annual migration of 110,000.
Both these assumptions more or less reflected the prevailing paradigm in fertility and migration trends from the late 1990s.
Under this outlook, Australia would add 7.6 million residents over 45 years: 1.5 million being added to Brisbane, 1.4 million to Melbourne and 1.3 million to Sydney.
Outside the capital cities, Queensland was to add 1.4 million residents (mostly on the Gold Coast).
And South Australia and Tasmania were to actually lose population by mid-century, a scenario that caused consternation at the time.
Indeed, South Australian Premier Mike Rann initiated a program of targeted population growth to which he boldly set metrics to measure the state's progress.
Well, Rann would be very pleased with the new projections released last week, which show Australia's population increasing from 20.6 million in 2006 to 34.2 million by 2051, reflecting net growth of 13.5 million.
This, too, is a medium-growth assumption.
Within four years the ABS has changed its medium-growth assumption from 110,000 migrants a year to 180,000 migrants a year.
Pushing the annual net migration assumption a further 70,000 over 45 years delivers an extra 3.2 million residents.
The fertility assumptions have also been raised from 1.7 to 1.8 births per woman.
The bottom line is that there has been a paradigm shift in the way demographers view Australia's future and the key difference is immigration.
Do you, as a business person, believe Australia can sustain an immigration program at an average rate of 180,000 a year when for the past 50 years this figure has averaged 110,000 a year?
If the answer is "yes" (which is my view) then you should start aligning your business agenda with the new demographic reality.
The reason why I think immigration will accelerate in the first half of the 21st century is that as the baby boomers retire later this decade they will leave a void in the workplace that will create demand for more workers.
Governments will support this flow because of their need to shore up the tax base: a workforce constantly rising converts to a rising tax base.
Economic migrants will, therefore, flow from the developing to the developed world to plug the workforce gap.
This outlook presents challenges for government and opportunities for business.
The challenge for government relates to the provision of infrastructure and the opportunity for business is to deliver the infrastructure.
But the business opportunities go way beyond this.
Under the old forecasts the ACT (effectively Canberra) was to add 74,000 residents by the middle of the century, which basically means the topping out of Gungahlin.
The new outlook has Canberra adding 161,000 residents, which means a new town (of 90,000 residents) will have to be developed to accommodate growth beyond Gungahlin.
The new forecasts lift the existing Melbourne and Sydney forecasts by about 1.4 million each.
The net addition of about 2.5 million residents to each city means (now calm down property people) development beyond the growth boundaries.
The Melbourne 2030 and City of Cities planning documents are not designed to accommodate growth at this scale.
Either Australians must "dense it up" to European proportions, or our cities must expand into greenfields locations and most likely within master-planned communities.
The outlook in the resource states is just as exciting.
Over the 45 years to 2051, Brisbane will add 400,000 more residents than had been previously planned, and Perth will up its projected population by a further 700,000.
I'm not quite sure where Perth will put its extra residents. Perhaps Perthlings will press inland instead of along the coast.
The new projections also bring demographic cheer to the regions.
Non-metropolitan Queensland (dominated by the Gold Coast and Sunshine Coast) will accommodate not 1.4 million extra residents over the 45 years to 2051, but 2.3 million.
In just four years the outlook for regional Queensland has delivered a requirement to accommodate 900,000 extra residents.
The two "coasts" will accommodate a large chunk of this, but what does this mean for the supply of and demand for land and water in cities such as Townsville, Mackay, Cairns and Toowoomba?
Even the Northern Territory gets a shake-up in the new projections.
It was to add 145,000 residents over 45 years but the outlook now is for 170,000.
The net increase of 25,000 residents in the forecasts is big news in the Top End because it equates to the equivalent of three new towns the size of Katherine.
But I have, of course, saved the best for last.
Whereas the former projections showed regional Tasmania and South Australia going backwards, the new outlook shows nothing but growth.
Non-metropolitan Tasmania will not lose 50,000 residents as had been thought four years ago, it will in fact add 12,000 residents by 2051.
The Tasmanian seachange shift of 2003 must have set a trend that is expected to continue.
And the same goes for regional South Australia.
Instead of losing 36,000 residents between 2006 and 2051, the new outlook has this region adding 126,000 residents.
This intrigues me.
Apart from Mount Barker in the Adelaide Hills, Victor Harbour on the coast, Whyalla and Mount Gambier, there are few regional towns of any critical mass in South Australia.
The addition of 126,000 people within five decades suggests either the creation of new towns or the morphing of small places into large places in much the same way that Mandurah and Hervey Bay transmogrified in the past three decades.
Anyone up for a spot of new town formation in South Australia?
The new outlook for Australia's population and its distribution in the 21st century is an exciting paradigm shift for business and government.
At the very least, it requires all existing planning documents to be recast to accommodate growth on a hitherto unparalleled scale.
We need to think boldly about how we manage our burgeoning cities and regions in the future.
And as for business, the prizes will go to those who understand and respond quickest and best to the new paradigm of strong and dispersed population growth throughout the Australian continent.
Bernard Salt is a Partner with KPMG;
[email protected]
