Lucky country feeling crowded
Immigrants bring growth — and more congestion
Want to go for a dip at Sydney’s famed Bondi Beach? Prepare to be jammed for an hour against sweaty bodies on a bus trapped in traffic. With Australia’s population growing at the fastest pace of any major developed country, what used to be a stress-relieving outing has instead become a stress-inducing ordeal. The country’s head count will hit 25 million sometime this month— three decades sooner than the Government predicted in 2005.
While Australia’s immigration system has often been cited as a model for other countries, its largest cities are starting to strain under the continued influx, which is equivalent to one person arriving every minute.
Some may scoff at the thought that 25 million people make Australia — the sixth-biggest country in the world — feel crowded. Yet much of Australia is uninhabitable desert, and even many of the greener parts along the coast struggle to secure adequate supplies of fresh water and face periodic drought and wildfires.
For residents in cities that have traditionally ranked among the world’s most liveable, life is getting tougher. Home prices are high, roads clogged, classrooms overcrowded and wages stagnant. Many Australians blame immigration, and inadequate planning to cope with it.
“Sydney and Melbourne are transforming into global cities like London and Hong Kong in terms of scale,” says Philip Davies, chief executive officer of Infrastructure Australia, a government body charged with identifying spending priorities. “The ultimate risk is to our quality of life.”
There is one clear winner: the economy. The nation just marked its 27th year without a recession. New arrivals have been a key driver of that remarkably long streak: annual population growth that’s averaged 1.5 per cent for the past four years has essentially produced the equivalent gain in gross domestic product.
Things don’t look nearly as rosy when measured on a per-person basis, though, and many people aren’t feeling the benefit, as wage growth remains near record lows.
The discontent is fuelling an increasingly strident debate. Among the key questions: how many people can the world’s driest inhabited continent sustain, and are Australians willing to sacrifice their quality of life to see their economy grow?
“The conversation in Australia is long overdue,” says Liz Allen, a demographer and social researcher at the Australian National University in Canberra.
The consequences of curbing immigration could include falling house prices, reduced workforce participation as the population ages, and shrinking tax revenue.
“Strong population growth is a key contributor to economic prosperity,” says Su-Lin Ong, head of Australian economic and fixedincome strategy at Royal Bank of Canada. “We are mindful that the population debate is not simply economic, but we also worry that the economic discussion in this context can be distorted and diluted.”