Prof Bob Birrell, Co-director of the Centre for Population & Urban research at Monash University, delivered the following address at Global Access Partner’s National Economic Review 2011: Australia’s Annual Growth Summit on Friday 16 September 2011.
The current Labor Government’s endorsement of the Big Australia outlook is partially justified by concerns about the impending increase in the proportion of Australia’s population aged 65 plus.
Under the assumptions of annual net overseas migration of 180,000 and fertility at current levels, Australia will grow from 22 million in 2010 to 36 million by 2050. About 10 million of this increase will be attributable to migrants and their children born in Australia. The other 4 million will be a consequence of natural increase and will occur even if net overseas migration is zero.
Under the Big Australia outlook, the share of Australia’s population aged 65 plus will grow from about 13% now to 22% by 2050. This share will be a little higher with lower migration. Nevertheless population ageing is unavoidable.
Another inevitable consequence is a slow-down in the growth of the working-aged population, relative to that of the past decade or so. As a consequence, unless the participation rate of those in the working ages increases, the rate of aggregate economic growth will also slow (assuming there is no change in productivity levels) relative to the recent past.
These developments are of great concern to business interests because they will affect the bottom line. The economy and thus individual businesses face potential speed limits, in the sense that the rate of aggregate economic growth may be constrained by the pace of labour force growth (if there is no improvement in productivity).read more