Forbes’ recent article points out that Australia’s secret recipe to its economic miracle isn’t a miracle at all. It’s not even economic. It’s demographic.
FYI, Australia is now the record holder of recession-less economy. With 104 consecutive quarters without recession as of October 2017, it snatches the baton from Netherlands that recorded 103 consecutive quarters (after underwent a slight recession at 82).
If recession is defined as 2 consecutive quarters of negative growth, the last recession Australia had was when Nirvana released Nevermind in 1991. That was 26 years ago.
It’s impressive, not only because its economic growth lasts for 26 years, but also because during the same time, Asian economic crisis, the dot com bubble and the 2008 global recession took place respectively, and Australia remained relatively unscathed.
What’s the Secret?
During the same time Australia warded off economic downturns, it was also growing its population. Australia underwent a population growth spurt, from 17 Million in 1991 to 24 Million in 2016. To put it into perspective, that’s a 40-50% population growth in the span of just 25 years. That’s less than a generation time.
Most of that growth owes itself to immigration. New immigrant pops up in Australia every 53 seconds (according to the article), while babies every 1 Minutes 44 Seconds. As a result, Australia now has 28% of its population born overseas. That makes Australia the champion of immigration countries among other developed countries.
The article argues further. Australia’s impressive 3% annual compound economic growth surfed on, and a dependent of, that population growth. If you take out the population growth of 1.4% from that number, the economic growth per-capita would be just a meager 1.6% per-annum.
The Australian Population Research Institution (TAPRI) recently conduct a survey among Australian voters. Given that the above hypothesis is right, the result of the survey could as well signal the end of Australia’s economic miracle.
74 per cent of voters thought that Australia does not need more people, with big majorities believing that that population growth was putting ‘a lot of pressure’ on hospitals, roads, affordable housing and jobs.
Australian government has taken some measures that reflect those sentiment, e.g. proposing to abolish the subclass 457 visa and overhauling the citizenship bill (that got killed off in the senate earlier this month).
The 457 Visa is the favorite scapegoat for anything wrong with job availability in Australia. Some say it’s baseless, while others agree with the “Australian first rhetoric” promoted by Turnbull. The debate around 457 revolves around the idea that migrants have taken the jobs from Australians. A closer look, however, shows that 457 visa holders amounted to less than 2% of the total workforce.
A quick look on the 457 Visa Holders.
Not Enough Room?
The so-called tension between Australians vis-à-vis migrants goes beyond the economy, or jobs availability, or longer hospital waiting line. It’s about multicultural diversities too (and fear for such thing). More than fifty percent of the same respondents who said Australian are “too crowded” in the TAPRI’s survey also the ones who’d support a partial ban on Muslims, like the one supported by One Nation leader Pauline Hanson.
It’s a huge homework for the Coalition, especially with strong opposition in the Senate, to strike a correct balance in its migration-related policy. Numbers
seldom lie. Lowering immigration intake can and will affect the economy directly. However, quoting the same article, that’s the risk everyone in the Government and 74% of the survey respondents are willing to take. don’t