GDP Growth Annually  Click to enlarge

It will not improve the living standards of you or I; nor will it reduce poverty and inequality or foster innovation and creativity. The only beneficiaries of high immigration are the immigrants themselves and while that is great, we can safely say that the government is not pursuing immigration for humanitarian reasons. Instead it is creating an illusion of growth while hoping you don’t realise the reality”.Australia has the highest population growth in the developed world. But what are our immigration policies trying to achieve?  Excerpt from The Big Australian Illusion by Callum Pickering for The Business Spectator.

Without reforming infrastructure investment, our failures of the past will become our failures of the future.  The only way


forward for the Australian economy is productivity growth and the only economic plans worth following are those that promote productivity.

Callum Pickering wrote; “Unfortunately they are creating an illusion of growth,  with little consideration of the long-term implications for Australian infrastructure. A few weeks ago Alan Kohler laid out the future for economic growth in Australia.

Illusion of Growth

It was all about people or more specifically, “the infrastructure required to house, feed and transport them” (Australia’s new boom: human beings, April 2). There is little doubt that migration will sit at the forefront of economic growth in Australia over the next generation. Australian politicians have embraced and run with the concept of a ‘Big Australia’, with high migration leading to elevated population and economic growth. But high migration levels are not achieved without a cost.


Congested Roads Click to Enlarge

High population growth puts pressure on existing infrastructure and commonly leads to greater congestion on our roads and public transport. Not to mention the impact on our natural resources and environment. There is also considerable debate as to whether high migration policies benefit the existing population. The Productivity Commission has found that high migration has, at best, boosted per capita GDP modestly. Its study in 2006 found that doubling the annual rate of migration would boost real GDP per capita by (only) around $383 over two decades.

The real beneficiaries of migration are the immigrants themselves who benefit from higher domestic wages and relatively better infrastructure. But if high migration is not improving Australian living standards, what is it trying to achieve? Unfortunately, it is doing little more than creating the illusion of growthDespite high migration,  Australia’s growth in per capita GDP has been lacklustre, with growth over the past five years slowing to its slowest pace in around three decades. Effectively our standard of living is now improving at a much slower pace than we had grown accustomed to.

Readers shouldn’t underestimate how important minor changes to growth are to our standard of living. If per capita growth rises annually by 2 per cent, living standards will double in 35 years; by comparison, at 1 per cent growth it will take 70 years for per capita income to double. The reasons behind the slowdown are many and varied but include the usual suspects: declining labour market participation, slower productivity growth, insufficient infrastructure investment and disruption caused by the global financial crisis.

What should be recognised though is that high immigration policies are not by themselves a recipe for growth. Immigration is not a substitute for productivity and so far Australian residents are seeing little benefit from Canberra’s immigration policies.  If politicians want to pursue a ‘Big Australia’ then they should be prepared to approach it in the right way – they cannot ignore the mounting pressure on existing infrastructure and our natural resources.

Unfortunately, there is little evidence that our politicians – at all levels and of both political persuasions – are capable of finding, selecting and funding the infrastructure that can make the most of our population boom. Australia has suffered from a public infrastructure shortfall for decades now, as successive governments at all levels have wasted a once-in-a-lifetime opportunity to fund infrastructure, boost productivity and set Australian up for the future. Instead we find ourselves on the back end of a resources boom, with long-term budget issues and a huge backlog of necessary investment projects.

The Productivity Commission released a damning assessment of public infrastructure earlier this year, citing “numerous examples of poor value-for-money” projects and inadequate project selection. Without reform it suggested that “more spending will simply increase the cost to users, taxpayers, [and] the community” (The great infrastructure drain must be pluggedMarch 17). Politicians are great at playing politics but not so successful at making sound investment decisions. The end result is an economy that is being driven by population growth, with little consideration of the long-term implications. How will we deal with the additional traffic congestion? What about increasing the housing supply? Does anyone care about the environment or natural resource depletion?


  1. Fighting Force says:

    The public are happy with the present day population but our politicians are not because they want a Ponzi scheme growth that will put us in recession. The Pauline Hanson One Nation party exists because they have tapped into the community concerns of there being no infrastructure or jobs to support Australia’s current immigration policy.

  2. J. Arnold says:

    It is getting to the stage when the percentage of immigration will exceed GDP growth then what will they do? As an example of the lack of money for infrastructure: When asked what is proposed in the way of infrastructure on Doncaster Hill, the federal member for Menzies, Kevin Andrews, was able to confirm that funds were being provided for a pedestrian crossing in Tram Road just north of Applewood. However, it would be some time before it could be installed because it had not been designed as yet.

    • Sel Murray says:

      If a pedestrian crossing, that hasn’t been designed yet, is all the government can afford in the way of improved infrastructure, then god help us! Most of the money that could be directed for the benefit of Doncaster Hill is being soaked up by the cost of our top heavy administration.

  3. Not So Squeezee says:

    It will be increased population on the cheap unless we increase the services to match, such as for health, education and transport otherwise we will all be queuing up for the same facilities.
    And look at the fall in the GDP to 1.8 % compared to immigration at 1.6%…..where’s the benefit to the country…duh.duh.

  4. Steve says:

    The issues that most annoy me are:
    The destruction of our lovely and unique architectural heritage in Melbourne.
    It feels like local government planning departments and councils favor property developers more than existing home owners.
    Increased immigration will lead to a long term lowering of the majority of Australian’s quality of life not improve it.
    Perceived ongoing corruption of local, state and federal governments in Australia, when will that ever end.
    Melbourne municipality needs the reintroduction of council wards to enable a more open and democratic governance.
    Stop building high rise blocks of flats next to existing home owners single and double story historic homes, put them in new developments on Melbourne’s outskirts.
    VCAT to be abolished and reinstate the powers of local government planning departments the way it ought to be.
    Stop the jerrymander of voting in Melbourne that gives businesses two votes each and residents only one vote each.
    outrageous overseas junkets and property development.
    An introduction of laws that withhold money from property developers for a period of time that will go towards building defects and warranty issues.

    I could go on….

  5. Brian Duke says:

    What is the point of immigration if their only destination is Sydney or Melbourne. They will live in vertical slums and take jobs away from our own people. Australians think we have enough people here so why aren’t the politicians listening.

  6. J Harper says:

    The government’s plan to settle immigrants evenly across regional Victoria to cities like Geelong, Bendigo and Ballarat will be a plus for decentralisation if they can make it work.
    Citizenship will be contingent upon migrants living in these centres for at least three years.

  7. Geraldene says:

    They Government (FIRB) changed the regulations to enable overseas investors to buy new apartments off the plan and provide rental accommodation for immigrants. Otherwise most of the high rise apartment developments would not have got off the ground due to there being no local demand. Overseas investors who purchased through dubious overseas intermediaries, had no idea of the lack of infrastructure and the negative capital gain.

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