Get ready for the “Big Australia” debate to go up a notch or two.
According to data released by the Australian Bureau of Statistics (ABS) today, Australia’s estimated residential population soared by 389,100, or 1.61%, to 24.512 million in the year to March, the fastest increase since 2014.
From 1990, that means Australia’s population has now increased by a mammoth 40%.
Over the year, most of that growth came via net overseas migration, increasing by 231,900, or 2.4%. Natural increase, a figure simply derived by subtracting deaths from births, accounted for the rest.
This excellent-yet-simple chart from the ABS shows the breakdown between the two groups, along with the total increase in Australia’s population.
As natural increase slows, net overseas migration is picking up, and fast, returning to the levels seen immediately before and after the global financial crisis, periods when Australia’s economy was significantly stronger than what is presently the case.
Within the net overseas migration figure, arrivals jumped to 540,300 over the year, the highest 12-month total on record. Going in the other direction, departures stood at 308,400.
And not only is population increasing quickly but accelerating, rising by 126,100, or 0.52%, in the March quarter alone.
In numeric terms, that was the largest quarterly growth in nine years.
According to Michael Workman, senior economist at the Commonwealth Bank, a large chunk of Australia’s total population increase is occurring in just one state — Victoria.
“Victoria’s population growth was the highest of the States,” he says. “It rose by 2.43%, or 149,000, over the year to March 2017. A lift in net overseas migration and net interstate migration are behind the strong Victorian outcomes.”
The annual percentage increase was the highest since 1960.
With around 75% of the state’s population residing in Melbourne, Workman estimates that Australia’s second-largest city is growing at about 120,000 per year.
If that keeps up, it will see Melbourne surpass Sydney as Australia’s largest city in the coming decades.
Outside of Victoria, annual growth rates of between 1.5% and 1.8% were reported in New South Wales, Queensland and the ACT, offsetting significantly slower levels in Tasmania, Western Australia, South Australia and the Northern Territory.
This table from the ABS shows the population of each state and territory as at the end of the March quarter, along with the change recorded over the past year.
And this chart, also from the ABS, breaks down the increase in population by natural increase, net overseas migration and net interstate migration.
Economic conditions, and as a byproduct of labour market strength, go someway to explaining the divergence between Australia’s eastern states and territories and other parts of the country.
Given the latest population growth estimate, it will undoubtedly see the debate over the merits of strong population flare again, providing fuel to both the proponents and naysayers of a “Big Australia”.
On one hand strong population growth helps to boost economic growth, with more people adding to aggregate demand — a handy outcome when real GDP is measured in volumes.
It also helps to boost government revenues, with more people in work translating to higher income tax and GST revenues, among others.
And, with an ageing population, strong population growth will help to deal with demographic challenges in the years ahead.
However, for all the benefits that it brings, it’s easy to argue that it presents an equal amount of challenges, perhaps more.
With so much of Australia’s population increase centered in Australia’s eastern states, in particular Melbourne and Sydney, it creates all kinds of issues that impacts the standard of living of those already residing in these areas.
More people means more demand for housing and infrastructure, and an increased supply of labour.
Just think of some of the common gripes you hear everyday from Australians: housing affordability, packed public transport, schools and hospitals and why real wage growth is going backwards.
While not the sole reason for these issues, population increase, particularly net overseas migration, has clearly played a part.
And though both federal and state government’s have started to address some of these concerns, to many its too little too late
The key question that has to be considered in the debate is whether strong population growth is helping to improve the standard of living for those already living in Australia, and what level of increase will be required to keep that steady or higher in the future.
NOW READ: NOT FULL, BUT NOT FUNCTIONING: — Why Australia needs to start talking about its population growth
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