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Population growth and urban development

One useful issue raised by Tony Abbott, Dick Smith and, with less coherence, by Pauline Hanson, is the size of Australia’s immigration intake. Do we want cities of Melbourne and Sydney to have populations of 8 million by 2050? Do we wish, under a high immigration intake scenario, seek to double our total population by then?  I definitely don’t. Our cities are large and congested now and a doubling of their population would make them unpleasant (and ultra-expensive in terms of house prices) places to live in – if not for me then for my children and their children. Moreover, the natural environment of Australia is one of the most remarkable on the planet – I’d like to conserve it as well as provide a home base for people.

Then there seem to me two ways out. Either one of two options: (i) Dramatically cut the immigration intake so that our population tapers off at a few more million than it is now – perhaps at 27 million. The immigration program would be designed to offset the significant emigration that occurs from Australia each year and from the shortfall in natural population growth required to maintain population size. Or (ii) Develop new cities at a sufficiently rapid rate so that net growth in the major population centers is reduced to zero. I prefer option (i) because I cannot see the option (ii) working satisfactorily.

The option of creating new cities would require the creation of 10 new cities (or the augmentation of existing small cities) by 2.5 million people each over the next 30 years of so.  It is a big task made difficult by the practical difficulties of socially-engineering where people will live.  This is the reason that academic areas such as “regional development” have fallen into such disrepute. Australia has only a handful of large cities now but the imperatives of doubling our population by 2050 would require the creation of 10 new cities the size of Brisbane or Perth.   Those who wish to pursue the high migration intake – the Housing Industry Association that represents the construction industry and the various business interest groups must explain clearly how this task will be carried out.  Otherwise, they must rationalize the creation of large megacities in all the current capitals.

The standard response on the left to such concerns is to claim that those expressing them are “racists” which is true in the case of a few but overwhelmingly untrue.  It is not the composition of the immigration intake that is being questioned here but its aggregate size and the implications of current intakes for how Australians will live in the future.  An additional foolish response is the claim that we need more young immigrants to balance the aging of our population.  This is Ponzi scheme reasoning  – let us take in more now to delay the problem that will be worse in the future because of our current efforts.  With a bigger population and a declining birth rate the problems will get increasingly worse not better.

A final argument is that by taking people from the overpopulated parts of the world (China, India, Africa) we relieve population pressures there.  That is true but, with reduced population pressures, these short term effects will be plausibly offset by increased births in those immigrant source countries.  China has already abandoned its “one child per family” policy and India will soon overtake China as the most populous nation on earth.   These countries will become “developed” over the next half century or so and will impose crippling demands on the global environment as a consequence.  They should, to the contrary, be forced to face up to their population problems now.

I used to believe that economic manipulations (entry charges, congestion taxes etc) could handle the issue of rapid population growth in Australia’s favor. I no longer do.  High house prices as a consequence of immigration-driven population growth as well as high rates of urban disamenities such as congestion and pollution are not being addressed by economic instruments such as taxes and charges. Indeed, I was naive to think they ever could be.   The charge towards a high population Australia needs to be stopped.  A small bunch of political figures are raising such issues and they deserve to be listened to.

6 comments to Population growth and urban development

  • derrida derider

    Harry, aren’t you confusing two broad issues in that last para? The first is what population growth we should want. The second is, given our decision on the first, what is the best way to organise our cities and population to have the best lifestyle and environment.

    It seems to me that a change in views on the first does not imply much change in views on the second. In a ZPG Australia it would still be optimal to do those “economic manipulations” to get better cities and a better environment. Just as it would in a rapidly growing Australia.

  • hc

    I used to argue that high immigration rates merely intensifies reasonable arguments for efficient pricing but now think that is glib. If you cannot implement such policies in a satisfactory way then high rates of immigration just results in higher social costs. Apart from the limited experiments on the Sydney Harbour Bridge we do not have congestion tolls on any Australian road. High rates of population growth require such tolls for efficiency with compensations being paid to current residents. The same is true for any infrastructure investment that is motivated by high population growth. In principle, you could privatize everything and put it in the hands of residents who would then welcome lots of congestion and pollution since they would derive income gains that more than compensated their increased disamenities. Or you could charge immigrants at the gate for all increased costs via an entry charge.

    These sorts of policies will never be implemented so, in lieu of massively higher costs, slow down population growth and avoid the externalities.

  • Robert Braby

    Harry, I am delighted that you have changed your views. I think it was Keynes who said to a colleague that ‘your trouble is that you are still a Keynesian, whereas I have changed my views’, or something to that effect. In my 1972 Masters thesis I argued against decentralisation in favour of a multi-nodal urban structure, and even included a chapter on a critique of Max Neutze, who developed the theory of decentralisation. (As examiner he was not impressed!)

    But I now regard the multi-nodal idea as a third best solution, decentralisation as second best and population restraint/decline as first best, for reasons similar to those you have outlined.

    I am not up with the latest in economic theory or developments, but I think for anyone interested in urban economic theory Neutze’s book should be essential reading. I have a rare copy which I will soon be discarding, so can give to anyone who is interested.
    G.M.Neutze, Economic Policy and the Size of Cities, ANU 1965. And for the record: R.H. Braby, Urban Growth and Policy: A Multi-Nodal Approach, Economic Analysis and Policy, Vol 4 No. 2, September 1973. Reprinted in Australian Urban Economics – A Reader Eds. J.C. McMaster and G.R. Webb, 1976.

  • Henry Haszler

    I agree completely on the issue of a smaller rather than a bigger Australia. One reason is that a bigger Australia will involve more crowding which in colonies of rats — used as the experimental animal — makes rats nastier. Trouble is that it is so easy to point to the — Ponzi — economic growth that comes with high immigration.

    We need to distinguish between the gains to immigrants from their decision to come to Australia and the impacts of that immigration on already resident Australians. As far as the already resident Australians go I don’t see any economies of scale and scope from an even larger Australia so where is the benefit? I think all we get is more crowding — I don’t see the expansion of the number of cities as working all that well — and more pressure on our resources and environment.

    However I’m not sure that the changing age balance of the population does not need addressing more thoroughly. One response is to argue that 1) the nature of work is changing so as to require on average less muscle than before and 2) today’s older Australians at the age of 65 etc are healthier than in years past and so can probably continue to contribute to their own support in ways not possible in the past. Is there anything else?

    Harry, good to see the blog is back.

  • Henry Haszler

    To Robert Braby

    Hello Robert. If you are discarding it anyway I don’t mind adding Neutz to my library. Happy to pay for postage.

  • Harry

    We’ve had some traffic on a Facebook post today and I was prompted by this to attempt to follow your blog, which seems to be impossible without a follow button on it, which is either not present or is hiding from me.

    So I’ve bookmarked you instead. We disagreed today on one aspect of migration policy, but I think we’d see more closely eye to eye in a broad framework.

    Cheers

    Richard Laidlaw