Urban planning policy? That was then, this is now

I HAVE advice for business and others concerned about the political hype that threatens to reduce the population growth rate of Australia.

I HAVE advice for business and others concerned about the political hype that threatens to reduce the population growth rate of Australia.

Australia's population growth rate peaked at 463,000 in the year to March last year.

By the end of December, the rate had dropped to 430,000 and by my reckoning the figure for the year to June was probably running at about 400,000.

The number needed on average to achieve 35 million by the middle of the century is 350,000, which includes 180,000 in net migration and 170,000 by natural increase.

At the current pace of deceleration, I don't think the growth rate will drop below the 350,000-mark until late next year and because we have already had some years of growth over and above this average, the labour-market and tax-base impact of slowed growth will not have a significant negative impact on the economy until 2015 and beyond.

In other words, it is technically possible for politicians (of all persuasions) to tighten this figure throughout the whole of the next term of office before it becomes absolutely essential that labour, skills and the tax base are boosted to put the nation back on the 350,000 trajectory. And by then, the political, bureaucratic and popular opinion landscape will have changed.

I have been examining and commenting on public demographic and urban planning policy for more than 20 years and in this process I have discovered something quite remarkable: public policy changes.

And I might add that both politicians and bureaucrats are completely shameless in their switching of positions.

For example, in December 2002 the Victorian government issued a document called Melbourne at 2030 that placed limits on the city's physical expansion.

Developers' pleas for more developable residential land fell on deaf ears throughout much of the first half of this decade.

Then in October 2007 newly released census data confirmed Melbourne was growing more rapidly than the bureaucrats had imagined (apparently the developers were right all along; there was heightened demand). What ensued was a new policy: Melbourne @ Five Million. (They had to give it a new name because it would have been embarrassing to produce "Melbourne at 2040" before putting anything of Melbourne at 2030 into effect.)

Within the space of half a decade the game had changed.

Old bureaucrats who championed the previous policy had retired or moved on and there had been ministerial changes. And all a new bureaucrat or minister need do in these circumstances is say "that was our old policy; now we have a new policy".

There is no ownership between what went before and what is being advanced now.

Take Julia Gillard's emphatic statement in June just three days after her elevation to the role of Prime Minister: "I do not believe in a big Australia."

But hang about, wasn't Julia Gillard 2iC to Kevin Rudd for eight months during which the big Australia debate raged? Isn't it the role of a 2iC to provide counsel to her boss: "Look, Kevin, I have reservations about this whole big Australia thing"?

Maybe she did say something but agreed to remain silent. I can understand that while Kevin was PM, he got to call the shots and, in fact, it's kind of ennobling to think Julia would have subjugated her own views in deference to those of the PM's.

But if silence can mean dissent (as it obviously did with Julia) then perhaps we had better hear the views of every cabinet minister on big Australia before the election.

In less than a year, there has been a switch from what was said then and what is being said now on the matter of Australia's rate of population growth and, oddly enough, this is why I am relaxed about the current state of the big Australia debate.

The numbers are historically high and will remain so for another year.

And we can even tolerate much-reduced growth for a year or so beyond that before the country really needs to be put back on track. That's a three-year timeframe before we may need a complete policy shift.

In three years time, the sharp edge of public opinion will be elsewhere. Three years ago it was the skills shortage; two years ago it was the global financial crisis; one year ago it was the ETS; and today it is the desperate need to save Australia from the ravages of over-population.

Stay calm and trust that within three years, when the issues associated with the ageing of the baby-boomer generation become critical, the public mood will have shifted: the impact of the hyper growth will have subsided; there will be in all probability at least one new leader of the two main parties, perhaps even a different prime minister.

And who's to say that in this new world of about 2013, with new political players and a public attention fixated on other things, that the migration rate cannot be quietly, gradually and purposefully raised.

I can just imagine the prime minister of the day saying that small Australia was old policy; we've got a new policy now and, true to form, the politicians and the bureaucrats will simply roll forward and never look back.

Bernard Salt is a KPMG partner; [e-mail]; www.twitter.com/bernardsalt