AFR

This article opens Australia's productivity closet and finds an extreme population growth skeleton there, masquerading as high labour costs. Some of us would think of it more as an elephant in the room than a skeleton, given the size of the problem, but the metaphor of hiding the issue serves its purpose.

The Australian Financial Review in an article entitled, "Australian businesses shackled by high labour costs:poll, on 27 Nov 2013 stated that:

"Falling productivity is of more concern to Australian business leaders than ­others in the Asia Pacific region a report has revealed and more than half think their ability to address the issue is ­average or poor.
A survey of Australian businesses by recruitment firm Randstad showed the 25 per cent of the nation’s business leaders interviewed were worried about productivity levels compared with 17 per cent in Malaysia, Hong Kong and Singapore and 19 per cent in India."

There is talk in the article about what aspects of the labour market might be impacting productivity, but none of what other underlying causes might exist. For example the rising cost of land impacting on rents for business premises and mortgages, which drives up overheads to contribute to lower profit margins.

Refer to these articles for more on this: "Land and Rent Costs to Business make Australia uncompetitive" and , "Cost of housing and cost of dependency in Australia."

"The survey found that 46 per cent of business leaders interviewed believed the top productivity challenge was developing leadership skills among employees to drive business growth. But 26 per cent said legislation impacting on workforce flexibility and costs was their biggest challenge to productivity."

"Productivity"

So let's look at how the ABS defines this Key Performance Indicator they call "productivity":

"Productivity is the efficiency with which an economy transforms inputs (such as labour and capital) into outputs (such as goods and services). When a nation achieves productivity growth, it is able to produce more goods and services from the same quantity of labour, capital, land, energy and other resources. In turn, improved production efficiency can generate higher real incomes and lead to long-term improvements in Australia's living standards. While education and training improve the quality of the labour force over time, and are a key input into productivity growth, lack of innovation, research, development, or investment in assets can reduce productivity growth and thus Australia's ability to compete in the international market.

The most comprehensive Australian measure of productivity available is multifactor productivity. It measures the efficiency with which combined labour and capital inputs are transformed into outputs. In the long-term, it represents improvements in ways of doing things (technical progress), which is the primary source of real economic growth and higher living standards. In the short term however, multifactor productivity also reflects unexplained factors such as cyclical variations in labour and capital utilisation, economies of scale, and measurement error."

Now you'll have to forgive me for taking a simplistic view of all this:

• "When a nation achieves productivity growth, it is able to produce more goods and services from the same quantity of labour". So it's a no-brainer that more people are only going to improve productivity if the net result of their existence is productive (= their additional output - the additional overhead they create). So there are two factors at play here; the number of people and their respective productivities. Pretty simple stuff from a "big picture" perspective don't you think?
• It is not true that "improvements in ways of doing things" is the primary source of real economic growth in Australia. Australia's government uses mass migration as a primary driver of real economic growth whenever the Prime Minister of the day choses; at his/her absolute discretion and "by stealth and without consensus"
• As we know, roughly 50% of Australia's export revenue is produced by roughly 5% of the workforce.
• Population has increased by about 18% over the last decade, while unemployment has increased by roughly 26%.
• The larger population drives demand for goods (including real property) and services (including costly public funded services), which in turn drives prices, and labour costs, higher - even as unemployment rises. In fact wages have been rising at around 4% per annum over the last decade as the CPI has risen at around 2.8% per annum.
• The ABS statistic described as Multi Factor Productivity has been declining at 1% per annum in recent years
• It doesn't take a genius to see that a combination of these "big picture" issues might be expected to have a negative impact on productivity.
• A reasonable person could easily conclude that using mass migration as an economic tool "by stealth and without consensus" might be an ill-founded and illegitimate strategy

So why doesn't Government and Treasury open up the closet and expose the extreme population growth skeleton?

Well you might ask.

If you are questioning the legitimacy of government conduct in this regard, please review and consider signing this petition and forwarding it to as many people as possible: Australia requires a public inquiry to determine a basis for the optimum rate of population growth

"Populate and reap rewards," was Monday's editorial (2 December 2013) in the Australian Financial Review. Its flimsy self-serving logic provides a curious contrast to Kelvin Thomson's superb speech on the same topic to a full auditorium of concerned citizens on Sunday. (The speech is embedded in this article.) Where Thomson has reacted to the news that population growth is completely out of control by attempting to help people to organise against the growth pushing forces who seek to benefit financially from overpopulation, the editorial in the Financial Review is cynical in its enjoinder to exploit those problems for elite gain.

Click here for Kelvin Thomson's speech about Victoria First and our population problem.

Orwellian AFR Editorial

In this editorial, Fairfax news markets overpopulation in a sinister fashion. It distorts economic principles. It views the economy only from the angle of the very rich, but doesn't bother to warn the uninitiated that that is its perspective.

It minimises the projections to 53.6 million by 2101, rather than the even worse likelihood of 70m by the end of the century. (See http://candobetter.net/?q=node/3560.)

The editorial talks rot about the dangers of a 'stagnant' population, taking a gratuitous swipe at Julia Gillard's initially unfavorable attitude to big populations.

It pretends that a small population causes inflation, when inflation is actually created by demand, i.e. more people wanting finite or fixed goods and resources.

The rationale appears to be a belief in endless economies of scale making everything cheaper, however this is contradicted by the reality, which is diseconomies of scale. These the editorial ignores because that is what big business is able to profit from at everyone else's expense. Hence Victoria and other states' problems with huge infrastructure projects that trample democracy and trash natural and social ammenity, like the East-West link.

Shameless

The editorial shamelessly promotes the idea that a small population would harm the 'national housing wealth' - which it fails to admit is a product of just the inflation it pretends would result from a smaller population, as well as a recipe for homelessness and housing stress. The rising cost or 'value' of housing is a direct result of rising demand related to population growth. Fairfax (like Murdoch) should declare its dependency on the real estate market to its readers.[1]

The editorial fear-mongers by relating the possibility of housing prices coming down to loss of returns on superannuation, shares and savings, but fails to factor in how lower housing prices would cause lower cost of living, making it much cheaper to live. We would not need inflated returns on investment.

What manufacturing?

It claims, nonsensically, that we would lose manufacturing to bigger populations overseas. A sane response would be, "What manufacturing?" When there were 7 million people here we had a thriving manufacturing sector, which has actually declined to almost nothing during the precise period that successive Australian governments have been engineering population growth through mass immigration. The rising cost of land, power and other resources, like water, drives up all costs of manufacturing. Wages must be higher for people to be able to afford these costs and businesses must also pay those costs. These are direct results of population growth.

The only kinds of business that can survive in this environment are huge corporations, such as transnational banks, mining, agribusiness, infrastructure and property developers. These corporate entities survive and 'prosper' because they actually own most of the resources, assets, and utilities that cost the rest of us - wage earners and small business - so much. But these are the only kinds of economic entities that really interest the elite agenda.

What is this editorialist smoking?

It is as if the editorialist is drunk, or believes that his/her audience is, as he/she strings outlandishly contradictory assertions together. For instance, the article maintains, on the one hand, that we need a huge population, but then bases this on the idea that Australia will "prosper as a supplier of minerals, energy, food, specialised manufacturing and professional services" to growing middle classes in Asia. That is not a description of the kind of economy that needs a lot of workers. Mining, utilities, industrialised agriculture and professional services are sectors with low ratios of workers to product.

This statement is bizarre:

"Instead, the striking successive increases in population projections since 2003 reflect the advent of Australia's China boom since that time, and subsequently the broadening of the opportunities through our so-called Asian century."

It can only be due to the lack of media diversity in Australia that this kind of intellectual foaming at the mouth can get published.

The editorialist insists: "A wealthier nation in turn will attract more people both to produce these export-oriented goods and services and to supply services to a more prosperous (and ageing) domestic population."

Note that more immigrants means bigger faster-aging cohorts,[2] but that seems to be what the Murdoch Press and its cronies really want: more expensive problems to market expensive 'solutions' to the rest of us.

The editorialist raves on, like the Queen in Alice: "This provides the chance for the Australia concept as we know it - a western outpost at the foot of Asia embodying the best of British-American Enlightenment concepts such as the rule of law, an open society and a vigorous meritocratic democracy - to fortify our security through increased national wealth that will sustain a healthy defence force and underpin our diplomatic and trading efforts."

What democracy?

What democracy? We have super-corrupt governments at every level of our society.

As Ted Mack recently commented in his brilliant Henry Parkes Oration [emphases added]:

"The fundamental problems of our system of government have not seriously ever been addressed since Federation. These problems can be summarised as the level of over-government. The obsolescence of the constitutional relationships between the three levels of government. The two party “winner-take-all” executive domination of parliament and the associated corrupted voting systems. The domination of the political system and public service by the two private unregulated political parties and their largely self regulated access to the public treasury. Almost a total absence in the school system and for new citizens of any education concerning the three levels of government, their function and voting systems."

"Big business is implacably opposed to more democracy. It wants more centralisation of power. It currently employs more than 600 registered lobbyists in Canberra and spends millions of dollars to subvert democracy. Big media is always constrained by its owners' interests. Since the Second World War there has been a growth of corporate propaganda to protect corporate power against democracy."

"The 2010-13 Federal Parliament saw the major parties virtually eliminate any real form of democratic debate substituting little but character assassination of opponents. It was a three-year election campaign of personal abuse and fear mongering. It was debased even further with aggressive bullying by the media and special interests at unprecedented levels. The same period saw both state and federal governments pandering to special interests allowing massive increases in the promotion of gambling and alcohol. Pandering to the development and mining industries and the seemingly endless privatisation of public assets often creating private monopolies, continued irrespective of public opinion." - Ted Mack, Henry Parkes Oration 2013 [3]

Perseverative demographic policy

The Australian Press's 'Asianisation obsession seems to be code for a big population - of any origin. Not just a big population, but for population growth at frightening levels never previously imagined, rightly feared by those already here.

I liked what Aung San Suu Kyi had to say about this systematic legalised mass invasion, which many won't criticise for fear they will be called racist, even though it is the massive numbers rather than their origin that is so frightening:

“I’d also like to remind you that you are unique and you do not have to go all Asian,” she said. "I understand that this is a trend of Australia today – to try to become ‘Asianised’ as it were. “You are special because you are a unique combination of the east and the west. “I hope and pray that Australia will … make an example of the possibility of genuine unity and diversity.” [4]

As Kelvin Thomson says, the bird has flown; we are already a multi-racial society. No-one I know is trying to make us British again. We do not have to work to make Australia multicultural. It already is.[5]

Push for overpopulation and authoritarian government in Australia

The editorial rightly says that "Immigration will be the major driver of this fresh population growth." As our population grows the fertility opportunites increase so that high immigration finds its echo in a rising birth rate overall. We are now facing the loss of control over population growth that India still faces and which caused China to bring in the one-child policy. At the same time we are looking at a decline in energy resources that power the world's economy. We are on a collision course of overpopulation with dwindling resources. And the press is applauding.

Although the huge volumes of mass migration that are now in train threaten to impoverish Australia's environment and most of its people, by far the most immediate threat they pose is their ability to atomise our social organisation through displacement and induced competition for scarce resources and opportunities. Our vulnerability in this is already apparent in the lack of public participation in government or independent grass-roots movements among our young. Without the social organisation that we once grew up with, along the lines of family, clan and neighborhood communication, we will increasingly become isolated overworked commuters, forced to observe the rules of a manufactured consensus such as we can read today in this intellectually and morally corrupt editorial in the Financial Review.

The editorial gives no quarter to democracy on this issue. It concludes with this understatement:

"It will be hard work to accommodate a bigger population. Sydney in particular, where 40 per cent of the population already live in apartments, and which is playing catch-up with road, airport and rail capacity, will need to be better managed. Tony Abbott's promise to be the infrastructure prime minister, with improvements in financing, regulation, incentives, and demand triggers, could not have been better timed."

Under these demographically explosive terms, Australia has as much chance of catching up on its infrastructure needs as the Phillipines and its democracy is similarly doomed.

There is one new hope: Join Kelvin Thomson's "Victoria First" NGO, which is helping Australians to organise against overpopulation. Contact Kelvin's office to know more at http://www.kelvinthomson.com.au/

NOTES

[1] "The reverse takeover of Fairfax’s high-value classifieds business Domain by glossy real estate upstart Metro Media Publishing is complete after Antony Catalano was appointed Domain’s CEO this morning. Property Observer's sister publication Crikey can reveal that Catalano, a former Fairfax executive, will seize the reins of the Domain group following Fairfax CEO Greg Hywood’s decision in March to spin the booming business unit out as a standalone entity. There is now frenzied speculation that Hywood and Fairfax will end up floating Domain to prop up shaky revenues elsewhere in the business. Alternatively, Hywood could sell all of Fairfax’s flailing publishing and broadcast assets and retain Domain with Catalano at the helm." Andrew Crook, "Catalano appointed CEO of Fairfax’s Domain,"
Tuesday, 19 November 2013 http://www.propertyobserver.com.au/news/catalano-appointed-ceo-of-fairfaxs-domain/2013111866435

[2] Because immigrants arrive in Australia after they are born they are always older than people born here, thus contribute to an older population. In fact they are usually of working age or quite mature, and will often bring out their elderly parents. That has quite a bubble effect on our demographic pyramid. See, for instance, http://candobetter.net/?q=node/1986
[3] The Henry Parkes Oration 2013, The State of the Federation, presented by Ted Mack, Sir Henry Parkes Memorial School, http://www.parkesfoundation.org.au/HPoration2013.pdf
[4] "Aung San Suu Kyi awarded honorary doctorate from ANU"
[5] Paraphase from Kelvin Thomson's speech launching Victoria First. See video at https://www.youtube.com/watch?v=qL4e0swBntg&feature=player_embedded