Thursday, December 23, 2010

Dr Jeff Harmer on Disability Support Pensions

The outgoing head of the Families Department, Jeff Harmer, is quite right to say the Government needs to explore policies to encourage disabled people and older Australians into work, to lift participation and productivity.

It is quite remarkable that on the one hand we are told there is a shortage of workers and high migration is needed to fill the gap, while on the other hand we have over 792,000 people receiving Disability Support Pensions – more than the number receiving unemployment benefits! Disability Support Pension numbers have grown over 30% over the past decade, now cover 5% of all Australians, and will cost $13 billion this financial year.

The first thing we need to do is to return the ‘skilled’ migration category to the 25,000 per annum it was in the middle of the 1990s. This will open up job opportunities for people not presently in the workforce, and lift our participation rate.

Dr Harmer is also right to say that there is a problem with middle class welfare, with family payments being made to people high up the income scale. Some of this money would be better spent in Universities and TAFES, giving people who are presently not in the workforce the education and skills they need to join the workforce.

Tuesday, December 21, 2010

Reports Confirm Melbourne’s Population Growing Too Fast

Two State and Federal Government reports confirm that Melbourne’s rapid population growth is harming our open space and leading to longer commuting times and declining housing affordability.

The Victorian Environment Assessment Council has told the State Government that open space per person will halve by 2026 for municipalities such as Melbourne, Hume, Whittlesea and Cardinia. The Council’s inventory of public land and open space in metropolitan Melbourne shows that rapid population growth is threatening the liveability of Melbourne suburbs as more people compete for public space such as parks and sports ovals. Its discussion paper shows that we will struggle to accommodate an extra 600,000 homes over the next 20 years, both in outer areas, with open space in Wyndham declining from 7.8 hectares per 1000 people to 3.3 hectares per 1000 people, and in inner areas, with open space in Moreland declining from 3.5 hectares per 1000 people to 2.9 hectares per 1000 people.

The Federal Government has been given a similar message. The Prime Minister’s Department’s incoming government brief has told the Prime Minister that “The perception that the quality of city life is declining is supported by declining measures of liveability (including from greater congestion and longer commuting times), declining efficiency, and a lack of affordable housing”…. “Without disciplined planning for growth, demographic pressures will negatively affect living standards, particularly in cities, as housing prices rise, congestion increases and it becomes more difficult to access services.”

These reports make clear that rapid population growth is damaging both our living standards and our quality of life. The Federal Government should reject the advice it is getting from property developers and big business, and cut Australia’s migration levels to those we used to have in the late 1970s. And the Victorian Government should not acquiesce in “Big Melbourne’ – it should protect our existing open space, both in inner Melbourne and at the city limits, and listen to the voice of residents concerning planning issues.

Comment on Sustainable Population Strategy Issues Paper

The release of the Sustainable Population Strategy Issues Paper is a welcome step forward in the national debate we need to have about Australia’s growing population.

Minister Tony Burke is right to say we shouldn’t have an arbitrary target, but that doesn’t mean we shouldn’t have a considered target. Otherwise we’ll stay on our present path, sleepwalking our way to an environmental disaster.

Minister Burke is also correct to say that sustainable population goes to “how much sunshine is left at the end of the day after a long commute.” It also goes to how much sunshine you get in your backyard if developers build high-rise buildings next door or behind you.

Unfortunately one of the Reports, by the Productivity and Prosperity Panel, shows no understanding of the downside of Big Australia, and trots out all the hoary, discredited old myths about the alleged advantages of population growth.

MYTH: “If it is balanced and managed well, living standards will rise with population growth, not fall.” (p.2)

FACT: A recent examination of the 100 largest US metropolitan areas from 2000-2009 found that faster population growth rates are associated with lower incomes, greater income declines, and higher poverty rates. Unemployment rates tend to be higher in faster growing areas. The 25 slowest-growing metro areas outperformed the 25 fastest growing in every category and averaged $8,455 more in per capita personal income in 2009.

MYTH:  “Population growth will help lift living standards, not make them fall.” (p.5)

FACT: If this were true, the wealthiest countries would be the most populous countries of Asia and Africa. In fact they’re the world’s poorest. The nations in the world with the highest living standards have small populations – eight of the top 10 nations in the world in terms of per person GDP have populations of less than 10 million.

MYTH: “A bigger workforce as a proportion of a larger population will mean more people paying taxes which will allow government to pay for essential services.” (p.5)

FACT (1): One of the reasons the smaller nations are wealthier is because they have a higher labour force participation rate. Because they’re not running big skilled migration programs job vacancies are filled by their unemployed.

FACT (2): The bigger the population the more essential services and taxes you need. Bringing in more people doesn’t make the task of providing essential services easier, it makes it harder.

MYTH: “The ageing of the population if ignored could produce labour market bottlenecks because there would not be enough skilled workers to go around.” (p.8)

FACT: Australia does not have a shortage of workers. Broadmeadows has an unemployment rate of 15.9%. An ageing workforce will help reduce unemployment, and provide opportunities for people with disabilities and indigenous Australians to enter the workforce. As Simon Crean recently pointed out, they should be our priority.

MYTH: “Slowing population growth would not make the infrastructure problems go away.” (p.9)

FACT: It would certainly help! The reason Zurich has a much better public transport system than any Australian city, even though it is just as spread out, is that Zurich’s and Switzerland’s stable population gives its policy makers time to address the needs. In rapidly growing cities infrastructure provision is like a dog chasing its tail, we never catch up. Jane O’Sullivan from the University of Queensland has calculated that population growth of 2% per annum doubles the amount of money required to maintain adequate infrastructure.

MYTH: “Slowing the rate of population growth will not make housing more affordable.” (p.9)

FACT: Yes it will! During 2009 housing affordability around Australia declined by over 22% due to a massive gap between the number of dwellings being built and the number of new people wanting housing. The Housing Industry Association said Australia’s fast growing population was pushing new dwelling requirements to record high levels. The inevitable consequence of this is rising house prices, rising interest rates and declining housing affordability.

MYTH: “The environment need not suffer from population growth.” (p.11)

FACT: But it has. In 2002 the Biological Diversity Convention pledged countries right around the world to stop the rate of biodiversity loss. This year, the International Year of Biodiversity, saw countries right around the world confess they had failed to stop the rot. Australia is no exception. We have hundreds of species of endangered birds, plants and animals, and every year their numbers deteriorate.

I encourage Australians who care about the future of this country and its beautiful wildlife to take advantage of the Government’s opportunity to provide comments on the issue, which is open until Tuesday 1 March 2011, by writing to:

Sustainable Population Strategy
PO Box 787