Let Dick have his say, but case for growth is overwhelming

YOU would not believe the timing.

YOU would not believe the timing. I release a new book arguing that we need to maintain high levels of migration over the next decade to offset the impact of retiring baby boomers, and in the same week Dick Smith releases a book on the need to wind back migration. You do realise that Dick and I are the best of friends and that we have concocted this whole "Bernard versus Dick" thing just to sell books?

The Big Tilt: What Happens when the Boomers Bust and Xers and Ys Inherit the Earth canvasses demographic, social and consumer trends for the coming decade. My thesis is that baby boomers will soon withdraw skills, labour and tax-paying capacity from the Australian workforce, meaning that if we are to maintain economic activity, employment and the tax base then the level of migration must be lifted.

For more than two decades to 2006, the Australian Bureau of Statistics produced population projections for Australia that few people outside specialist demographic analysts were aware of. These projections placed the national population at between 27 and 29 million at 2051 and were based on net overseas migration assumptions of between 90,000 and 110,000 a year.

But after the 2006 census, ABS demographers detected an uplift in immigration; they were also aware of baby boomers edging closer to retirement. The ABS sought a second opinion from Peter McDonald, head of demography at the Australian National University.

Professor McDonald is internationally recognised as an academic demographer. His advice was that because of the imminent retirement of baby boomers from the workforce the long-term migration assumption should be lifted to 180,000 a year. An extra 70,000 migrants a year were needed to offset the boomer retirement factor.

The ABS responded by producing bold new population projections in September 2008 that showed Australia reaching 36 million by 2051. Two weeks later I wrote of the significance of these projections in this column, arguing that all metropolitan plans had to be reissued, which is exactly what happened.

The new projections underpinned the Third Intergenerational Report produced by Treasury in September 2009. It was this document that Kevin Rudd was referring to in October 2009 when he said he believed in a big Australia.

ABS demographers in consultation with an academic demographer recalibrated the projected population of Australia because they could see what others could not see, or refused to see, and that is that baby boomers will retire en masse in the coming decade, thereby diminishing this nation's skills, labour and tax base. The notion that the boomer "retirement effect" will be negated by some people working longer, and by others being self-funded in retirement, is fanciful.

If there were substance to this argument the ABS would have left the migration assumption at 110,000 a year.

And it makes sense. The first baby boomer born in 1946 turns 65 this year; between now and 2015 boomers born in the late 1940s will trip across the retirement line. Many of these people worked and paid taxes for 30 years before the introduction of the Superannuation Guarantee in 1993.

First-wave boomers will not only take their skills out of the workforce but they will also rightly demand pension funding from the tax base.

One of the arguments advanced by Dick and others is that there are more Xers and Ys than boomers so what's the problem in funding their retirement? By my measure there are 4.1 million boomers, 4.4 million Xers and 4.6 million Ys in Australia. There are 2.5 million pre-boomers in retirement now who were born 1931-1946.

The issue is not the 10 per cent jump from boomers to Xers; it is the 60 per cent jump between pre-boomers and boomers. We are used to providing services to, say, 2.5 million retirees now; the funding required to deliver the same services (let alone to ramped expectations) to boomers in retirement will be 60 per cent higher. Who's going to pay for that?

One of the problems Dick seems to have with me, as evidenced by his ABC documentary Population Puzzle, screened last August, is that I am not trained in demography.

While this is correct (I have a masters degree in history and geography) I have advised business and government on demographic issues for 25 years and have written a national weekly column on the subject for eight years. I have also written four popular books on demographics and was admitted to the Paris-based International Union for the Scientific Study of Population three years ago. The IUSSP is a professional body for demographers.

I am tagged as a demographer by business and the media; it's a form of shorthand; it describes what I do. Business calls anyone who deals with population, workforce or market numbers a demographer, including pollsters. And in either case the idea of holding up net overseas migration to offset the retirement impact of the baby boomers is not a Bernard Salt invention. It is the assessment of a collaboration of demographers from the ABS and ANU. I am agreeing with, and defending, the position taken by experts.

I might also add that Dick makes reference on page 42 of his book to "demographer Bob Birrell". You might have guessed that Bob along with Dick is firmly in the anti-growth camp. The problem is that Professor Birrell's CV shows degrees in history, economics and sociology, not in demography. Apparently the anti-growth lobby is unperturbed by a lack of demographic qualifications if the views espoused align with their own.

I see the population debate as similar to the climate change debate. The conversation is enhanced by the inclusion of diverse voices from history, geography, sociology, economics and demography.

I think a range of experts have something to contribute. Even those with related skills and experience in that business, the media and Dick happily label as "demographers".

I believe the Australian people want to hear both sides to this argument. And since the screening of what many regard as the highly partisan Population Puzzle last year, I just know that the national broadcaster would be champing at the bit to balance the ledger. I propose to ABC managing director Mark Scott another documentary called Population Solution that presents the case for planned, managed and responsible growth.

Despite a bit of professional argy-bargy between Dick and myself, I must say that I respect him. His philanthropy is to be admired. This nation would be a far better place if others in business followed his lead. I also like him personally. Even in his 60s, Dick retains an effervescence that is warm and infectious. However, on this single issue I disagree with him.

Sadly, I do not expect politicians to enter the debate. In fact, I expect them to simper in the corner until the dust has settled and a popular way forward is decided. At the end of the debate, I have no doubt they will sidle up to either Dick or myself and suggest that they always knew we were right.

And since this debate is back on, I want the business community to be more vocal in its views and not to remain dumbstruck in the corner with the politicians.

Bernard Salt's new book, The Big Tilt (Hardie Grant), is in bookshops now [e-mail]