Rudd moves to defuse growing population pressure

KEVIN Rudd's sparse announcement that Tony Burke will become the first population minister is a blatant election-year political fix that hopefully will deliver a substantive policy result next term.

Burke is being asked by the Prime Minister "to develop Australia's first comprehensive population strategy". There are no terms of reference, just a couple of generalised and vague paragraphs from Rudd issued on Easter Saturday that would have taken five minutes to knock up.

The public is told it is expected Burke will finish his task in 12 months, happily after the election, that he will hold an open dialogue (no details provided), that his new responsibility is within Wayne Swan's Treasury portfolio that has just released its own detailed projections of a 35.9 million population at 2050, that Rudd likes the idea of a bipartisan approach on population (especially when the public is getting restless) and that Burke will consider challenges, opportunities, cross-government frameworks, roads, housing, service delivery, water, urban congestion and the environment (in short, anything that matters).

It typifies the political-driven improvisation that seems embedded in the Rudd government's character. It is another example of catch-up after Rudd's misreading of voter concern following his declaration last October that, "I believe in a big Australia" of 35 million. Labor misjudged the angst from the intersection of high population growth and inadequate infrastructure and planning.

The substantial point, however, is that Rudd needs a circuit-breaker in a dangerous debate going off the rails. John Howard's ability to expand immigration yet contain the backlash now looks impressive, though Howard's numbers were far below Rudd's.

The real significance of this government initiative is to pre-empt a deeper backlash against immigration by reframing the political and policy debate. Australia's national interest is squarely on the line. Rudd and Tony Abbott both believe in a growing population and will need to be called to account if they succumb to populism.

Burke is an excellent appointment. A former opposition immigration spokesman, he is a Sydney member of parliament with a heavily multicultural seat who, as Agriculture Minister, knows the regions. Burke's reputation is also known; he favours population growth and is devoid of green ideology. The reason there are no terms of reference is because the cabinet wants to control this process. This is no "hares running" independent inquiry and that is sensible. The Treasury will provide the advisory platform for Burke and he told The Australian yesterday that "a section in Treasury will be dedicated to the task". This puts a sound economic framework around the project. But the first job is to row back from Rudd's 36 million benchmark that he nominated last October but has wisely refused to repeat this year.

Asked whether Treasury's 35.9 million population figure from its recent Intergenerational Report would stand as his target, Burke said: "That figure is a projection only. It is not a plan, a target or an ambition. It is not our policy to get there. The projection applies only if we change none of our existing policy settings."

And the point of Burke's project is to produce such policy changes. Burke said his strategy will not lead to an optimal population target. Such aversion is sensible since targets create problems, a lesson Rudd has learned. Nor is Burke interested in population caps, a point Swan made last week when he dismissed caps as impractical and said Treasury's IGR was not about targets or caps. It is, however, about trends and it is where Australia is headed at present.

The main point in Treasury's projection seems forgotten; it has population growth slowing, yes slowing, to an annual rate of 1.2 per cent in the next 40 years compared with an average of 1.4 per cent in the past 40 years. The present mood overlooks that economic growth is also slowing to a projected 2.7 per cent annually in the next 40 years compared with 3.3 per cent in the same past period.

Incredibly, what is also overlooked, as Treasury outlines, is the detrimental effect of low population growth, which it illustrates by reference to Japan and Italy. In these countries population decline will mean stagnation, old age dependency issues, serious equity challenges and big fiscal pressures.

Finally, Treasury's IGR projection assumes net overseas migration from 2012 of 180,000 annually, which is a sharp fall from the 244,000 annually in the past three years. The present figures are high and are not expected to be sustained; when the opposition says these numbers must fall, this is Treasury's own assumption.

Burke's theme is that "both sides in the current debate speak the truth", and this will surely become Labor's election-year stance. He means the employer in Western Australia calling for more people and the frustrated worker complaining about Sydney's grid-locked traffic are both right. "My view is there is no single answer for the nation," Burke says. "My task is to work out what is in the national interest. But our needs are different in different parts of the nation." He argues some areas have

reached capacity because of water constraints while others can continue to expand population to meet economic needs. Recognition of regional differences is at the heart of Burke's project. The politics are highly convenient: Labor can talk the talk of growth and environmental constraint.

Burke says immigration must take account not just of economic demand but "other capacity constraints" as well. He says his remedies will go to supply and demand, that is, both infrastructure and immigration numbers.

For Labor, this becomes a political holding operation in election year made necessary by the artificially high intake at present. Rudd's problem, the inherited legacy of many years and unsolvable in the immediate term, is the gap between arrival numbers and proper urban management. Given Australia's economic demand formigrant workers there is no easy overnight solution. But Rudd is making a pledge to fix it. The appointment of Burke is sensible but a classic Rudd manoeuvre: it raises expectations about his government's ability to solve a complex policy problem that underwrites Australia's future population growth. The scale of the policy challenge is huge, another test, ultimately, of whether Rudd is all talk and little action.