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Australian cities have reached diseconomies of scale: Sustainable Population Party

At the 2000 Sydney Olympics, Australia’s population was 19 million, and will reach 24 million in late 2015. That extra 5 million people means a 25 per cent increase in just 15 years, or another Sydney.

The federally registered Sustainable Population Party says the Intergenerational Report’s predicted doubling of Australia’s population to 40 million by 2050 will deliver greatly reduced infrastructure services for ordinary citizens.

Why can’t infrastructure be doubled?

“The doubling of our population demands a doubling of our infrastructure, but this will be impossible to deliver in Australian cities. The increasingly obvious reason is that our cities have reached diseconomies of scale,” said William Bourke, President of the Sustainable Population Party.

“Diseconomies of scale are the forces that cause governments to produce infrastructure - like schools, hospitals, road and rail - at increasing per-unit costs.

“In short, governments do not receive enough proportionately extra tax from each new citizen to provide for this disproportionately expensive infrastructure.

“It used to be easy to deliver infrastructure when the government owned the land, but because our major cities are already planned and built up, there is no room to retro-fit new infrastructure without expensive additions like land buy-backs and tunnelling.

“Consequently, projects like Melbourne’s East West Road Link and Sydney’s North West Rail Link now cost $18 billion and $8 billion respectively. That’s an astounding $350 million to $1 billion per kilometre. The impact on government budgets is clear. According to The Grattan Institute, state and territory borrowing for capital expenditure over the last seven years drove their finances backwards from $37 billion in the black in 2006 to $69 billion in debt in 2013.[1]

“Huge infrastructure costs then force unpopular asset sales, increased debt borrowings and austerity. The ongoing failure to deliver infrastructure leads to congestion and lower productivity.

“Sustainable Population Party rejects the bipartisan political agenda to double Australia's population to around 40 million by 2050. We support a target of around 26 million.

“Sustainable Population Party is #RedefiningGrowth to secure a prosperous economy, healthy environment and better quality of life for all Australians. Real growth means better, not bigger.

“We call on the federal government to urgently hold a national population summit, closely followed by a referendum-style vote,” said Mr. Bourke.

[1] http://grattan.edu.au/report/budget-pressures-on-australian-governments-2014/

Comments

Western Australia's collapsing GST allocation is the most severe economic shock the state has faced since the share crash of the late 1980s, Premier Colin Barnett says. The premier said he would not accept less than the state's current share of 37.6 cents in the dollar and WA was going to start being more 'selfish'.

Western Australia is on track to only receive 30 cents in the dollar back from its GST contribution due to falling iron ore revenues.

Deidre Willmott, chief executive of the Chamber of Commerce and Industry of Western Australia, argued the failure to prepare the state's economic future "would be funny if it weren't so serious". She warned that the slump in ore prices and declines in the share of GST have left its economy vulnerable.

Since 2007, WA has been the fastest growing State or Territory in Australia, and in the last few years the volume of growth has almost outstripped that of Queensland. In the period 2012-13, Western Australia’s population increased by 3.3%, or 81,300 persons. It also reached the minor population milestone of 2.5 million persons. However, the state has slipped to third on both housing finance and dwelling starts and has fallen to seventh on unemployment. High population growth in the last decade has increased pressure on Perth’s road infrastructure and public transport network. The down turn of the WA economy is putting many employees at risk of losing their jobs.

The recent influx of people to Western Australia has put a tremendous strain on all their infrastructure etc. The powers that be seem to have no trouble keeping count of the population in Australia, and the location of most of these people, so how hard would it be to determine the GST for each state purely on a per capita basis.

Unlike Australia Norway has transferred its tax/royalty revenues from its key resource, oil and gas, into a sovereign wealth fund. Norways sovereign wealth fund has now reached a value of 6 TRILLION Kroner or nearly $1 TRILLION Australian dollars. Compare this with Australia and all we have to show from our resources boom is a budget deficit.

The state should have created a sovereign wealth fund, and we can compare Perth today with what happened to Melbourne during the debt-fuelled property boom of the 1880s. WA have squandered their mining boom on population growth.

The Committee for Economic Development of Australia's (CEDA) report "Addressing entrenched disadvantage in Australia" found that more than 1 million Australians were battling permanent disadvantage. Current policies aimed at getting people back into the workforce were not working.

CEDA's chief executive Professor Stephen Martin said successive governments had failed "massively" in dealing with the problem. "Telling people who do not have a stable home base or in some cases even basic education levels to go and get a job is pointless. People need a stable foundation to start with for labour market programs to work".

The fact that Australia is failing to produce enough "jobs" to keep up with population growth can't be deduced logically? After more than 2 decades of glorious "economic growth" in Australia, we are producing more poverty, not prosperity.

Professor Martin said the past 20 years had essentially been a massive failure by successive Governments to address entrenched disadvantage and that policies had been economically short-sighted. - See more at: http://www.probonoaustralia.com.au/news/2015/04/million-aussies-living-poverty#sthash.plcURSmq.dpuf

“It is unlikely that any country can wholly eliminate poverty and disadvantage. However, Australia most definitely can and must do better.” They must believe in an economy without limits, and an infinite universe when it comes to human activities. The "lucky Country" concept is clearly been eroded. There's no concept of "carrying capacity", or more people sharing finite resources!

Contradictorily, CEDA is committed to ensuring a "growing and vibrant economy, which requires good policies and frameworks to govern government decision making". So, the solution is "good policies", not measuring population growth to match our economy's success and progress?

The fact that we are not producing stability, and that "growing and vibrant economy" is failing to produce wealth, seems to elude their logic - guess CEDA depends on government support and funding?