The state of Australia: our people

Developing policies to shape the level and nature of future population change must go beyond the ‘big’ versus ‘small’ Australia dichotomy. AAP/David Crosling

In the lead-up to the budget, the story of crisis has been hammered home, but there’s more to a country than its structural deficit. So how is Australia doing overall? In this special series, ten writers to take a broader look at the State of Australia; our health, wealth, education, culture, environment and international standing.

Australia is currently the fastest-growing OECD nation. In 2013, Australia’s population grew by 1.8% compared with the OECD average of 0.7%. This is not as high as the 2.2% in 2008, which was the most rapid rate of growth since 1960. However, among Asian countries, only Singapore and Afghanistan have populations that are growing faster.

How we’re doing now

High levels of net migration gain (1.1% in 2012-13) – the highest rate in the OECD – are fuelling most of the growth. The Australian government is almost unique in its ability to control the numbers settling permanently in the country, with only New Zealanders (30,115 in 2013) not subject to a cap. The Abbott government has largely maintained the skilled and family migration quotas of the Labor government but reduced the refugee/humanitarian quota (from 20,000 in 2012-13 to 13,750 in 2013-14).

In addition to permanent migrants, at any one time around one million foreigners are in Australia as visitors or temporary residents. Levels of temporary migration have remained high with 457 visa holders, working holiday makers and students all increasing in 2013 compared with 2012.

Emigration from Australia counterbalances immigration to some extent. In 2012-13, Australia recorded 369,459 permanent and long-term departures compared with 675,941 arrivals.

Net international migration accounted for 60% of Australia’s population growth in 2013. The remainder was due to natural increase – the excess of births over deaths.

The Australian total fertility rate in 2013 was 1.951, a little below the recent peak of 1.963 in 2009 but still high by OECD standards. Mortality improvements continue, with life expectancy at birth being 79.9 for males and 84.3 for females. This is respectively 13.8 years and 13.7 years higher than for people born in the year after World War Two.

The biggest recent change, however, has been in the number of extra years that we can expect an Australian turning age 50 to live. Since 1970 this has increased 8.9 years for men and 7.3 years for women. In this context, it doesn’t seem misplaced to increase the eligibility age for the pension by five years.

But there is a cloud on the mortality horizon. The OECD has identified Australia as one of the world’s most obese nations with 28.3% of Australian adults obese and another 35% overweight. If this does not half the incremental improvement in life expectancy, it will increase the death rate and prevent older Australians remaining longer in the workforce.

Obesity may increase the death rate and prevent older Australians remaining longer in the workforce. AAP/John Pryke

How we got here

There can be little doubt that the average standard of living of Australians has improved over the last decade. Australia, by any measure, is a wealthy country but a key issue relates to how this wealth is distributed.

The OECD has found that Australia is the 11th most unequal of 34 OECD members with a Gini Coefficient - a widely used measure of income inequality - above the average. Also, ABS data on income inequality show that the coefficient increased from 0.27 in 1981-82 to 0.328 in 2009‑10. The rich have become richer with the top 20% of income earners receiving over 40% of total household income compared with 38% in the mid-1990s.

However, disposable income levels of the two lowest quintiles have risen, although their share of total income has fallen. Social policy researcher Peter Whiteford has argued that interpretation of these data can be complex, with some wealth distribution data suggesting a more equal distribution than of income. The most recent report of the Australian Social Inclusion Board found some 680,000 Australians (around 5%) experience multiple, entrenched disadvantage.

Australia has eschewed adopting a population policy but has many policies influencing population trends. Despite the issue of asylum seekers dominating migration discussion, they have had an infinitesimal impact on population growth, even during 2012‑13 when irregular maritime arrivals peaked at 25,724.

The main driver of continued rapid population growth has been the high immigration intakes during the Howard, Rudd, Gillard and Abbott governments. Skilled migrants have dominated immigration, with their share of the total migration intake increasing from 29.1% in 1993-94 to 69.6% in 2005-06.

The Big Australia vs Small Australia debate flared during the 2010 election campaign but was muted during the mining boom years with discussion of regional labour shortages. The Abbott government has thus far not given any signs of any drastic reduction in immigration levels.

The latest ABS population projections released in 2013 largely anticipate higher rates of growth than did either of the two previous series in 2005 and 2008. Even the low-growth scenario envisages an annual net migration gain of 200,000, compared with the most recent net migration gain (2012-13) of 244,371. This would mean the nation’s population grows from 23.2 million currently to 26.1 million in 2021 and 29.3 million in 2031.

The “high-growth” projections assume a net migration intake of 280,000, with the national population reaching 26.8 million in 2021 and 31.9 million in 2031.

The main driver of continued rapid population growth has been the high immigration intakes during recent governments. AAP/Dan Peled

The next ten years

Ageing is clearly of significance yet it is extremely predictable. Hence, Australia should be initiating all of the policies needed to ensure we meet its challenges but at the same time take full advantage of what has been called the “longevity dividend”.

Despite the different ABS population projections, the low and high projection series show virtually no difference with respect to the numbers aged 65-plus that they anticipate in 2021 and 2031 (2%).

There are few iron-clad certainties in Australia’s future but the doubling of the population aged over 65 in the next quarter century is one of them. We need to develop a comprehensive set of coherent, integrated policies not just relating to population but involving employment, health, social security and social inclusion.

This should not only allow us to best meet the challenges this presents but also identify and include policies that maximise all of the opportunities that ageing can present.

Historically, national discussion on population has largely been a debate between supporters of zero growth and those of a “big” Australia of 50 million or more residents. It has involved the extremes talking past each other and has been very short on broad community involvement and balanced discussion based on evidence derived from the best science. Growth and sustainability have been seen as mutually exclusive goals and equity and fairness have rarely been considered.

Developing policies to shape the level and nature of future population change is an important national priority but must involve a broad-based national conversation and go beyond the “big” versus “small” Australia dichotomisation. Australia’s major political parties have avoided such a discussion, not only because of the heat generated by the two extreme positions but also because both those extremes are represented within each party’s ranks.

A national conversation that is not dominated by interest groups but is inclusive and informed by evidence is necessary. Few discussions will have a greater influence on the Australia that our children and grandchildren inherit.

Further reading: The State of Australia series