dependency ratio

A graph from "Australian Population Scenarios in the context of oil decline and global warming" at http://www.crudeoilpeak.com shows that the bulge in the Australian population pyramid which growth economists say will cause a larger number of aging people than the economy can cope with, was obviously caused by high levels of post-war immigration. Dr Jane O'Sullivan has quantified the enormous cost in new infrastructure and maintenance of population growth.

This population pyramid, which appeared at http://www.crudeoilpeak.com/?p=1300 was made using ABS on-line population modeling software and purports to represent our population at 2007. [1]

Bulging Australian population pyramid

The graph shows that the bulge in the Australian population pyramid which growth economists say will cause a larger number of aging people than the economy can cope with, was obviously caused by high levels of post-war immigration. (The lighter coloured parts of the pyramid represent the overseas-born part of the Australian population.)

Without this high immigration, projections would show a much more moderate increase in the future proportion of aged to other cohorts in Australia's population. [a]

A growing population grows the problem: Dr Jane O'Sullivan

By continuing immigration at higher and higher levels our governments and the developer lobby will create a real monster of a problem.

University if Queensland, Agricultural Scientist, Dr Jane O'Sullivan has quantified the cost of constantly increasing infrastructure stock. She says:

"The point most overlooked about population growth is that it costs bucket-loads more than ageing, and many times more than the additional revenue from the extra people. You might think that, at 2 per cent growth, we need 2 per cent more infrastructure and services each year.

The problem is, to add 2 per cent to our infrastructure stock each year, we need more like 100 per cent more infrastructure construction activity that we'd need for a stable population. It works like this: if a cost-weighted average lifespan of infrastructure is around 50 years, we need to replace around 2 per cent of it each year to maintain current stocks. If we also have to grow by 2 per cent, that is twice the infrastructure burden.

The same multiplier principle applies to any durable asset. It turns out that the average lifespan of an asset is equal to the percentage increase in cost caused by each 1 per cent of growth. If buses last on average 15 years, we need to spend 15 per cent more on buses per 1 per cent of growth, just to maintain current service levels. If the average doctor or engineer works for 25 years, we need to graduate 25 per cent more per 1 per cent growth - at 2.1 per cent growth, that's over 50 per cent more graduates, and 65 per cent more enrolments per head of total current population.

Little wonder that the skilled migration program has only made the claims of skills shortages more strident.

The 2010 Intergenerational Report anticipates additional ageing-related costs of only 2.4 per cent of GDP by 2050, with population growth to 36 million.

Stabilising at 24 million would only increase this cost by around 0.8 per cent of GDP."Newcastle HeraldApril 28, 2010

Of course the Australian growth lobby knows this perfectly well and has ... um... engineered ... the situation. Australia, unlike European countries, pretends that this growth will create its own wealth, seeing population growth and demand for more infrastructure as an economic stimulus. In Europe it is rightly considered a cost.[2]

Notes

[a] [30-4-2010 this sentence was edited from one which said there would be no increase, which was overstating the situation.]

[1] I erroneously attributed the 'population pyramid' to the Productivity Commission, on 29-4-2010 when I first published this, but when I sought further details the next day, I found that it came from http://www.crudeoilpeak.com/?p=1300 My apologies.
[2] See Chapter Seven, notably the heading, "Reasons for Connections made to Housing and Demographics", in Sheila Newman, The Growth Lobby and Its Absence.