Money & Markets | opinion

Scott Morrison is right to tackle migration, but the challenge is bigger than just a numbers game

(Photo by Mark Kolbe/Getty Images)Prime Minister Scott Morrison opening construction work for Western Sydney Airport.

  • Prime Minister Scott Morrison is talking about reducing the cap on inward migration to Australia, acknowledging the pressure on infrastructure from population growth.
  • But managing the pressures from population growth needs a broader suite of policy tools than just capping the migration intake.
  • It’s not just a Sydney and Melbourne issue: it’s a national problem.
  • Bipartisan agreement and creative policies to ensure people are incentivised to live in the right areas are needed.


It appears we’re finally about to have a fair dinkum debate about population growth in Australia with Prime Minister Scott Morrison acknowledging that for all the good it’s delivered to the national economy over time, especially in the post-GFC era, the negatives for those already living here are now starting to outweigh the benefits.

“Population growth has played a key role in our economic success. But I also know Australians in our biggest cities are concerned about population,” Morrison said in a speech in Sydney today.

“They are saying: enough, enough, enough.

“The roads are clogged, the buses and trains are full. The schools are taking no more enrollments. I hear what you are saying. I hear you loud and clear.

“That’s why we need to improve how we manage population growth in this country.”

Morrison is right.

Many Australians are fed up, knowing all too well that for all the infrastructure projects that are currently being rolled out by across the country, the response has come after the fact.

The population is already here, growing at 1.6% per annum, equating to an annual increase of 380,700, according to the latest population data from the ABS.

Put bluntly, the infrastructure projects being rolled out today are only catering for problems that already exist, a scenario that will likely repeat over and over again in the coming decades should population continue to grow at a rapid pace.

Much of the national attention has been focused on Australia’s largest cities, Sydney and Melbourne, where population growth both in actual and percentage terms has been significantly faster than in other parts of the country.

That partially reflects that most around 40% of Australia’s population is located in just these two cities, meaning it naturally gets a lot of attention, but the problems being experienced there are also being replicated in smaller cities where comparatively slower increases in population can still result in negative side effects for existing residents.

Just ask anyone who has tried to get through the centre of Hobart recently, or those stuck on the freeways in Queensland’s southeast corner.

The same capacity constraints seen in Australia’s largest cities are also being seen in these locations.

It’s a national issue, not just a Sydney and Melbourne issue.

Given the position Australia currently finds itself in, it makes sense to curb immigration levels for a period of time — not only to allow for infrastructure to catch up, but also to build a holistic national approach that avoid repeating the problems of today over and over again.

Morrison is making all the right noises, acknowledging that it’s time for a “new discussion with the state and territories and local governments about how we manage and plan for our changing population”.

“We need a more targeted and tailored approach to conversations about population,” he said.

“I want the states to bring forward their population plans targeted to their states. This process can also involve local government.

“This will feed in to the setting of our migrations caps and policies for next year, ensuring that migrations is finally tied to infrastructure and services carrying capacity.”

It’s a pity that Victoria, New South Wales and Australia will all go to the polls within the next five months, meaning the fresh debate started today comes across as a populist plan to help a struggling federal government which, based on current opinion polls, will be sitting in the opposition benches by the middle of next year.

Whether that’s the idea behind today’s announcement — to help improve the chances of re-election — is up for the electorate to decide, but unfortunately the outcome of the next federal election will not address the underlying issue.

One suspects for this debate to actually translate to action, a bipartisan approach across federal, state and local governments will be required.

Nail, head

How do we encourage overseas migrants and the existing population to settle or move across Australia, not just to specific locations?

(Photo credit should read PETER PARKS/AFP/Getty Images)Pedestrians and shoppers walk down the newly refurbished George Street in the central business district of Sydney.

Morrison hit the nail on the head when he said that throughout history “people have moved to where they believe they can they see the best economic and social opportunities for them and their families”.

Right now, based on recent population statistics, that’s largely Sydney and Melbourne.

They move to where there is the most opportunity, leading to a scenario where stronger economic conditions continues to draw in more and more people over the time, compounding existing capacity constraints in these locations.

Just in my little world, my partner is from Adelaide, the bloke who sits next to me is from Adelaide and my GP is from Adelaide. All are university educated, were born and educated in Adelaide, yet they live in Sydney. They moved here for the opportunities on offer.

That’s just one little example of economic activity begetting economic activity.

To break the current cycle seen across the broader Australian economy, there needs to be jobs, and good jobs at that, in other parts of the country to help disperse population growth across the country.

While building infrastructure is useful, creating temporary economic activity through investment and employment growth, there also needs to be a focus on attracting and fostering commerce in other parts of Australia.

Like people, businesses too tend to operate in locations where there is the most opportunity.

In order for them to operate in new markets, they need some encouragement to do so.

While corporate taxation been a decisive issue in Australia in recent years, that too needs to be an area of focus when it comes to the population debate.

The creation of special economic zones — an idea that has been floated in the past in Australia — is one option that could be put forward to solve the current cyclical conundrum.

Making sure business-critical infrastructure like electricity, transport and water is available at a reasonably stable cost is another.

By offering incentives to companies to open or relocate to specific areas it will create opportunities for workers in other parts of the country and abroad, an outcome that will help to even out and diversify economic activity across the country while alleviating many of the issues with population growth — be it too much or two little — seen today.

Having the necessary infrastructure to cope with today’s problems is one thing. Having the jobs and opportunities in order to keep and attract people to these locations in the future is another, and requires a much more robust and detailed plan than changing the migration intake.

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