An even bigger Australia

"I actually believe in a big Australia. I make no apology for that," Kevin Rudd famously said three years ago on ABC-TV's 7.30 Report. Apparently the focus groups went ballistic.

So when Julia Gillard used her first major announcement as the new Prime Minister to reassure voters that she does not believe in a "big Australia", many of us relaxed.

Rudd's answer had been a response to Kerry O'Brien's question about Australia heading towards a population of 35 or 36 million by mid-century. Treasury secretary Ken Henry had expressed disquiet in a major speech in Brisbane that day about a 60 per cent increase in Australia's population in 40 years, a significant jump on the projections that Treasury had made only two years before.

Population growth is a combination of two factors: net overseas migration and natural increase. The Commonwealth alone determines what the immigration and humanitarian intakes will be, though the Trans-Tasman Agreement means tens of thousands of New Zealanders can and do enter Australia outside of any migration quotas.

Decisions of the Federal Government can affect natural increase as well. Fertility was fairly stable at 1.7+ (children per woman) for a number of years, but after the introduction of the baby bonus in 2005 it steadily climbed to 1.96 in 2008 though it fell back slightly to just under 1.9 in 2010 and 2011. While this is below replacement (2.1), there is a 'demographic time lag' and it is some decades before below replacement fertility rates are reflected in negative population growth.

Thus, if net migration were zero, that is, immigration equaled emigration, Australia's population would gradually stabilise and then very slowly decline, but not until the late 2040s.

Unfortunately, we are a long way from zero net overseas migration. In figures released by the Australian Bureau of Statistics (ABS) last week - during the Christmas party season so no-one noticed - net overseas migration in the year to June 2012 was 208,300 people, 22 per cent higher than the net overseas migration recorded for the previous year. Natural increase went up as well, by 800, to 151,300.

So in one year our population grew by just under 360,000 people at a growth rate of 1.6 per cent.

So what's wrong with a growth rate of 1.6 per cent, you ask?

If you cast your eyes down the world rankings for population growth rate to see what company you keep at 1.6 per cent, you find yourself equal to Somalia, squeezed between Laos and Bangladesh. Not exactly prosperous countries. In fact, at the top of the table where growth rates are over 3 per cent, apart from oil rich states like Qatar, most are desperately poor countries like Zimbabwe, Niger and Uganda. In contrast, most OECD countries have growth rates well below 1.0 per cent.

What's more, a 1.6 per cent growth rate gives us a doubling time of 44 years, in other words, our population would hit 45 million in 2056 should this growth rate continue. That's a lot more than the 35-36 million figures they were bandying about on the 7.30 Report.

Of course, the population growth rate may well drop back from 1.6 per cent as below replacement fertility slowly takes effect. Before we conjecture too much, we should look at what the ABS projections are to mid-century and the start of the next http://www.abs.gov.au/Ausstats/abs@.nsf/mf/3222.0 They have three series: high growth A; medium B; and low growth C. Current fertility and net overseas migration puts us about half way between A and B. Roughly, that means a population of 39 million by 2056 and about 54 million in 2101.

Not just a big Australia, but a bigger and bigger one!

So what's wrong with that, you ask? After all, we have plenty of land. Much of the land is arid, however, and while we can grow enough food to feed 60 million, we will not if climate change wipes out 90 per cent of irrigated agriculture in the Murray-Darling Basin. Nor will we if oil prices nearly double within the decade as the International Monetary Fund predicts, unless we heavily subsidise farmers' fuel use.

The next 20 years will be different from the last 20. A smaller population will find it easier to adapt to the coming crises of climate change and higher oil prices. As a first step, we have to get our growth rate under 1.0 per cent as soon as we can. That means no more than 230,000 extra people annually, not the 360,000 we have now. That means 130,000 fewer people each year. It means an end to incentives to have more than two children and it means a significant cut in immigration, a halving in fact. And we have to do it now.