Guessing growth is not the answer

Eugenie Joseph

10 August 2018 | Ideas@TheCentre

This week, Australia’s population clock ticked over to 25 million: a moment of celebration for some and consternation for others.

Remarkably, this milestone was reached more than 20 years ahead of schedule if we believed official government projections from 2002.

Yet this has highlighted an inconvenient truth: governments are not good at predicting long-term population growth.

And this undermines public confidence in their ability to plan for a bigger Australia.

After all, how can governments plan for larger cities and more infrastructure if they cannot anticipate future population with any certainty?

To take one example: in its 2014 Plan for Growing Sydney, the NSW government estimated that an extra 664,000 homes would be needed in the next 20 years. Just two years later, this was revised up to 725,000.

Population growth is inherently difficult to forecast. This is why agencies like the Australian Bureau of Statistics make projections instead — that is, estimate different possible rates of population growth, based on assumptions about birth rates, life expectancy and migration levels.

However, these projections are often treated like a crystal ball; even though they are, at best, a form of sophisticated guesswork.

And another problem is that the underlying assumptions can be very conservative ¾ and even implausible in some respects.

For example, the government projections from 2002 assumed that annual net migration would stabilise at 90,000 – even though it peaked at 300,000 in 2008.

More recent projections also assume the level of net migration will stabilise in the long-term – although realistically it could keep growing, barring major policy changes.

This is why governments should approach population projections with extreme caution – and not present them to the public as divine revelation.

Otherwise, the public will lose all faith that governments are capable of planning for a ‘big Australia’. And public reaction to population growth will become increasingly more consternation than celebration.

This is an edited extract of an op-ed published in the Spectator online earlier this week.

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