The ABS released its population projections figures today, a series that always warrants a fair level of interest.
The projections look at different scenarios for migration, fertility, and mortality, and project a range of scenarios from an Aussie population of 37½ million to almost 50 million by the year 2066.
New South Wales remains the populous state under all scenarios with its population potentially ballooning as high as 15 million, while the high growth scenarios also see Victoria (14½ million) and Queensland (10 million) adding very substantially to their headcount.
Western Australia is, as ever, hard to predict, but my bet is that it will have a significant growth cycle in its economy sometime soon.
Strong migration: bipartisan support
No doubt the release will be tortured until it confesses to any number of memes, but just three observations here today.
Firstly, previous forecasts and projections have significantly underestimated actual population growth – and it’s worth considering for a moment why this is.
The key reasons were laid out by the Intergenerational Report: governments tend to like immigration because new migrants grow demand in the economy – in aggregate, if not always in per capita terms – new migrants are younger than the average Aussie, and they tend to work and pay tax for a long time.
This has become known as the ‘demographic dividend‘ because:
- lower immigration would lead to slower economic growth;
- lower immigration would lead to an ageing population; and
- lower immigration would lead to lower participation rates (with an adverse consequences the tax take).
On that basis governments of both stripes may prefer to look at diverting demand away from the two main capital cities rather than cutting immigration.
A second point is that with today’s rapid rate of technological change, healthcare and medicinal breakthroughs could see life expectancy increase far more rapidly than we can imagine today.
This would play havoc with forecasts and potentially see population growth exceeding even the high range estimates.
A third and final observation is that if the population does grow as assumed by the high range forecast, then further growth in the Aussie population would not be preventable, even under a draconian and highly unlikely zero immigration policy.
Growth would become self-perpetuating due to the rate of natural population increase (birth minus deaths).
Overall, this was an interesting set of figures which implied that even with immigration helping to slow the ageing of the population, the number of Aussies aged 85 or above will double over the next 25 years, while the dependency ratio would increase under the medium scenario.
It was further interesting to note in a PTUA report released last week that – although there are ever more cars on the road – peak car usage and come and gone, with Aussies now more and more likely to embrace public transport.
There’s a lot you can take from today’s population projections, but for now those are some observations for you to be going on with!
Subscribe & don’t miss a single episode of Michael Yardney’s podcast
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
Need help listening to Michael Yardney’s podcast from your phone or tablet?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
Prefer to subscribe via email?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.