Australian Property News
Migration needed to keep economy healthy
Posted on Wednesday, February 03 2010 at 10:32 AM
Migration will play the key role in reducing the economic dent the ageing population will have on the Australian economy, according to the Federal Government’s recently released 2010 Intergenerational Report that tackles the social and economic issues Australia will be faced with over the next 40 years.
"It's clear that population growth is inevitable and essential to Australia's future," said Urban Taskforce chief executive Aaron Gadiel of the report findings that revealed Australia's population will rise from today's 22 million to 35.9 million by 2050.
Housing Industry Association managing director Shane Goodwin said this population increase by 2050 necessitates 7.1 million new dwellings and would represent a large increase over the building levels of the past 40 years.
He said it would require annual building of more than 30,000 dwellings per year in excess of 2009 levels.
"Constructing over seven million new dwellings over the next 40 years raises many serious social and economic challenges," said Goodwin.
"Where will these dwellings be located? Will these dwellings be adequately serviced by appropriate amenities and infrastructure? Will these new dwellings be affordable and appropriate for a more environmentally concerned society?"
Gadiel said the report observed that countries with low or declining population growth face more extreme ageing challenges, with greater demands for publicly funded social services and a reduced ability to meet these challenges.
"Immigrants help deal with the challenges of an ageing of the population because the average immigrant is younger than those already here," said Gadiel, referring to the report fact that 89 per cent of immigrants are aged under 40 when they migrate to Australia, compared to only 55 per cent of the Australian population aged under 40.
He expressed concern with the projections of a decline in the population growth rate from 2.1 per cent in 2008-2009 to 0.9 per cent in 2049-50.
"This kind of reduction in our long-term level of population growth will carry economic and social costs for all Australians," Gadiel said.
The predicted decline in workforce participation as a result of an ageing population is also projected to reduce the potential economic growth rate of the economy to a GDP annual average of 2.7 per cent compared with 3.3 per cent seen in the previous 40 years, said Gadiel.
"In the face of an ageing population we need to see significant increases in Australia's productivity growth to secure our economic future," he said.
"This means the outdated urban planning laws that restrict competition and reduce economic efficiency need to be tackled."
Goodwin said land supply issues, high levels of taxation on new housing at all levels of government, and a slow and highly constrained building approvals process continue to stymie the building industry from providing an adequate level of new housing now.
"Overcoming these structural barriers will require a concerted effort at all levels of government to ensure that shelter is both adequate and affordable for years to come," he said.
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