This week we’re exploring the state of nine different policy areas across Australia’s states, as detailed in Grattan Institute’s State Orange Book 2018. Read the other articles in the series here.
It’s already started. We may be only entering the formal election campaign in Victoria tonight, but massive transport announcements are in full swing from the state Labor government, the Coalition opposition and the Greens. And with an election due next March in New South Wales, we can be sure the major parties in that state won’t be far behind.
Expanding the capacity of the transport network always gets far more attention than other ways of managing a fast-growing population. In reality, though, governments have a far bigger menu of options to keep Australia’s capital cities moving – and they should use them all.
The swag of promises in Victoria to date has been big on rail. The Andrews government would, if returned, build a 90km suburban rail loop connecting all major suburban lines. Work is to start in 2022 at an announced cost of A$50 billion.
A Matthew Guy-led Coalition government would, if elected, build high-speed-rail to regional cities. The first trains would come into operation within four years, at an announced cost of A$15-19 billion.
People also love big new infrastructure because it feels as though it comes for free. While a politician may have to pick just one from a menu of large projects, voters don’t have to confront this kind of choice.
Rather, we face the difference between a new station or service near our home, or no such new station or service. If you are the beneficiary of a new rail service, you may support the candidate promising it. By contrast, the losers are dispersed, and it’s hard to get too agitated about services we never had.
The median commute distance for Melburnians barely increased, from 8.6km to 8.7km, over the five years to the most recent Census in 2016. The median commute time has remained at 30 minutes each way since 2007.
Despite only modest new infrastructure, people have adapted. Some have changed job or worksite, and working from home is on the rise. Some people moved house, or even left the city. And some changed their method of travel, leaving the car at home and catching the train, tram or bus to work. Other people simply accepted a longer commute, at least for a time, and particularly if they were earning more.
Of course, not everyone is better off when the population grows rapidly. Some people elect not to take a new job that’s too far from home; some pay higher rent, or cannot afford a place they once could have. But the lesson from Melbourne is that people are not hapless victims of population growth, depending for their well-being on governments building the next freeway or rail extension.
So what are the best ways to help cities cope?
The Grattan Institute’s State Orange Book 2018 recommends that governments work with, not against, the adaptations that people make. Here are three ways state governments can help:
They should stop making it so hard to move house, by replacing stamp duty with a broad-based land tax.
They should stop locking new residents out of their preferred locations, by combining a relaxation of zoning restrictions on residential density with clear assignment of on-street parking rights.
The incoming governments of Victoria and NSW should introduce time-of-day road congestion charges in the most congested parts of Melbourne and Sydney (offset by a cut to vehicle registration fees), with the funds earmarked for public transport improvements.
On Sky News, Hanson said Australia is “the highest growing country in the world”.
The senator added that at 1.6%, Australia’s population growth was “double [that of] a lot of other countries”.
Are those statements correct?
Checking the source
In response to The Conversation’s request for sources and comment, a spokesperson for Pauline Hanson said the senator “talks about population growth in the context of our high level of immigration because in recent years, immigration has accounted for around 60% of Australia’s population growth”.
World Bank data for 2017 show that Australia’s population growth was 1.6%, much higher than comparable countries with immigration programs like Canada (1.2%), the UK (0.6%) and the US (0.7%).
One Nation leader Pauline Hanson was correct to say Australia’s population grew by 1.6% in the year to June 2017. But she was incorrect to say Australia is “the highest growing country in the world”.
According to the most accurate international data, the country with the fastest growing population is Oman, on the Arabian Peninsula.
Senator Hanson said Australia’s 1.6% population growth was “double than a lot of other countries”. It is fair to say that Australia’s population growth rate is double that of many other countries, including the United States (0.7%) and United Kingdom (0.7%), for example.
Since Hanson’s statement, Australia’s population growth rate for the period ending June 2017 has been revised upwards to 1.7%. But Hanson’s number was correct at the time of her statement, and the revision doesn’t change the outcome of this FactCheck.
In terms of the 35 countries in the Organisation for Economic Cooperation and Development (OECD), Luxemberg was the fastest growing country in 2016, with Australia coming in fifth.
Caution must be used when making international population comparisons. It’s important to put the growth rates in the context of the total size, density and demographic makeup of the population, and the economic stage of the country.
How do we calculate population growth?
A country’s population growth, or decline, is determined by the change in the estimated number of residents. Those changes include the number of births and deaths (known as natural increase), and net overseas migration.
In Australia, both temporary and permanent overseas migrants are included in the calculation of population size.
According to Australian Bureau of Statistics data, Australia’s population grew by 1.6% in the year to June 2017 – as Senator Hanson said.
Since Hanson’s statement, Australia’s population growth rate for the period ending June 2017 has been revised upwards to 1.7%. But as said in the verdict, Hanson’s number was correct at the time of her statement, and the revision doesn’t change any of the other outcomes of this FactCheck.
That’s an increase of 407,000 people in a population of 24.6 million.
All states and territories saw positive population growth in the year to June 2017, with Victoria recording the fastest growth rate (2.4%), and South Australia recording the slowest growth rate (0.6%).
How does Australia’s growth compare to other OECD countries?
Comparison of Australia’s average annual population growth with other OECD countries shows Australia’s rate of population growth is among the highest in the OECD, but not the highest.
This is true whether we look at annual averages for five year bands between 1990 and 2015, or single year data.
Looking again at the World Bank data, Australia’s rate of population growth for 2016, at 1.5%, was double that of many other OECD countries, including the United Kingdom (0.7%) and United States (0.7%).
The greatest contribution to the growth of the Australian population (63%) currently comes from overseas migration, as Hanson’s office noted in their response to The Conversation.
The origin countries of migrants are becoming more diverse, posing socioeconomic benefits and infrastructure challenges for Australia.
Sometimes people confuse net overseas migration (the total of all people moving in and out of Australia in a certain time frame), with permanent migration (the number of people who come to Australia to live). They are not the same thing.
Net overseas migration includes temporary migration. And net overseas migration is included in population data. This means our population growth reflects our permanent population, plus more.
Population changes track the history of the nation. This includes events like post-war rebuilding – including the baby boom and resettlement of displaced European nationals – to subsequent fluctuations in birth rates, and net overseas migration.
We can see these events reflected in the rates of growth from 1945 to the present.
The rate of population growth in Australia increased markedly in 2007, before peaking at 2.1% in 2009 (after the height of the global financial crisis, in which the Australian economy fared better than many others).
Since 2009, annual population growth has bounced around between a low of 1.4% and a high of 1.8%.
The longer term average for population growth rates since 1947 is 1.6% (the same as it is currently).
It’s worth remembering that a higher growth rate per annum coming from a lower population base is usually still lower growth in terms of actual numbers of people, when compared to a lower growth rate on a higher population base.
There can also be significant fluctuations in population growth rates from year to year – so we need to use caution when making assessments based on changes in annual rates.
Economic factors, government policies, and special events are just some of the things that can influence year-on-year population movements.
Other factors we should consider when making international comparisons include the:
total size of the population
demographic composition, or age distribution, of the population, and
the economic stage of the country (for example, post industrialisation or otherwise).
Any changes to the migration program should be considered alongside the best available research. – Liz Allen
The FactCheck is fair and correct.
The statement about Australia’s population growth rate over the year to June 30, 2017, is correct. The preliminary growth rate published by the Australian Bureau of Statistics at the time of Senator Hanson’s statement was 1.60%; the rate was subsequently revised to 1.68%.
It is also true that many developed countries have lower population growth rates than Australia, but some have higher rates. According to United Nations Population Division population estimates, Oman had the fastest growing population between 2014 and 2015 (the latest data available).
With regards to misinterpretations of net overseas migration, it should also be stated that some people think this refers to the number of people migrating to Australia. It is actually immigration minus emigration – the difference between the number arriving and the number leaving. – Tom Wilson
The Conversation’s FactCheck unit was the first fact-checking team in Australia and one of the first worldwide to be accredited by the International Fact-Checking Network, an alliance of fact-checkers hosted at the Poynter Institute in the US. Read more here.
Have you seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at email@example.com. Please include the statement you would like us to check, the date it was made, and a link if possible.
As we move closer to Treasurer Scott Morrison’s third budget, what we do know is this – Australia has a revenue problem. A more global and digital economy; an ageing population with fewer taxpayers and sluggish wage growth make future predictions of revenue even more precarious. There’s never been a better time for tax reform.
But as governments have tried to reform (and stumbled) over the years the burden has shifted to individual taxpayers and the latest budget is likely to be no different.
We looked at revenue data over the last 20 years drawing from budget papers, government finance statistics and the Australian Tax Office. To compare revenue over time, we have adjusted for the effect of inflation by using real measures.
Tax revenues have risen 26% in Australia since the global financial crisis, from A$310.3 billion in 2009 to A$389.8 billion by 2016.
Income tax has contributed most to this growth and some is driven by rising wages and jobs growth. Between 2009-10 and 2016-17, individual income tax revenue grew by 37% – an average of 5% each year.
But bracket creep also comes into play as personal tax thresholds have not kept pace with inflation, causing average tax rates to rise among middle income earners in particular.
The growth in business tax revenue leading up to the global financial crisis was heroic – averaging 11% each year and well above any budget forecasts. In the ten years to 2007, business tax revenue grew by almost 130% – from A$41.4 billion to almost A$95 billion.
But what goes up must come down, and business tax fell by 6.3% between 2008 and 2016. However we can see strong growth between the last two periods, with business tax receipts growing by 10.7% from A$72.6 billion to A$80.3 billion.
Revenues from GST and sales taxes have risen, by 16% since 2009.
The relationship between Australia’s economic output and its tax revenue looks somewhat different. The tax-to-GDP ratio reached nearly 25% prior to the global financial crisis, but dropped to 20.5% in 2010-11. It recovered to around 22% by 2012 and has remained essentially flat since then.
Successive governments have attempted to create an efficient tax system that’s fair and reliable with few distortions. Prior to the turn of the century the Howard government argued the tax system was out of date, complex and inequitable, heavily reliant on individual and company tax, and prevented Australia competing on a global level.
The Howard government’s new tax system in 2001 was an answer to this. This new tax system seemed to have all the reform solutions needed – income tax cuts for hard working Australians and at long last the introduction of a goods and services tax, along with some pretty big welfare reforms.
Everything appeared to be going quite well with the new tax system – revenue from company tax was way, way above any Treasury official’s forecast.
But fast-forward 10 years and cracks began to show, prompting a new review into the effectiveness of Australia’s tax system. The Henry Review, provided some 138 recommendations for tax reform, yet very few saw the light of day. And just five years later, another review was conducted with then Treasurer Joe Hockey at the helm, which since seems to have been not so much parked as abandoned.
Income taxes from individuals have always made up the greatest share of tax revenue in Australia. Prior to the introduction of the Howard government’s tax system, income tax from individuals made up 57.3% of the total tax pool – it now accounts for 51.0% of total tax revenue.
The Howard reforms included a reduction in personal income tax rates. During the next ten years Australian businesses shouldered a greater share of the tax burden, with their share rising from 17.9% in 2000-01 to 27.4% in 2007-08 at the peak of the resource boom. This has since fallen to 20.6%.
The contribution of taxes on goods and services has remained fairly steady since moving from sales tax to the GST in 2001. GST revenue is consistently around 16% of all tax revenue.
The share of tax revenue from customs duties, excises and levies has been falling since 2001, from 14.5% to 9.5%. Other tax revenue has been fairly consistent over time, contributing less than 2% of total tax revenue. However, in 2012-13 this increased to around 4%, with the introduction of the short-lived carbon pricing mechanism.
The problem with predicting future revenue
Taxation revenues were consistently underestimated prior to the global financial crisis, but have fallen below expectations since its end. The tax-to-GDP ratio has been anchored close to 22% since 2012-13. This is despite eight successive federal budgets since May 2010 projecting future tax revenues in excess of 24% of GDP.
And where does the greatest divergence lie between forecast revenues and out turns?
Company tax revenues are consistently – and by some margin – the most difficult to predict. Receipts fell short of forecast estimates of around 5% of GDP, by around one percentage point over four years, since the May 2010 budget.
Estimates of company tax receipts for 2017-18 were revised upwards by A$4.4 billion in the latest MYEFO update in December 2017. Should this eventuate, it will take total company tax revenues for 2017-18 to A$83.8 billion (around 4.6% of GDP).
The government may well feel that this creates space for a company tax cut and personal income tax cuts in the upcoming budget.
Revenue from individual income tax has been projected to rise to around 12.5% of GDP over the forward estimates, in each budget, since May 2013. Revenue has risen from 9.5% of GDP in 2009 to 11.4% by 2016 before dropping marginally by 0.2 percentage points in the latest Mid-Year Economic and Fiscal Outlook (MYEFO) forecasts.
But wages have not played the leading role that they have been cast in, in every budget going back to May 2011. Since this time wage growth has been forecast at an elusive 3% mark or thereabouts, yet has fallen well short of this each year and currently stand at 2.1%.
Tax thresholds remained fixed between the 2012 and 2016 budgets, and the only change since has been to lift the 32.5% tax threshold from $80,000 to $87,000, effective 1 July 2016. Tax revenue growth up to now has certainly been driven by the effects of bracket creep.
Unless tax thresholds in the future are increased at least in line with inflation, this means that average taxes will continue to rise.
Plans for a 0.5% increase in the Medicare Levy rate from July 2019 have been shelved, which would have raised around A$8.2 billion over the next four years to support the National Disability Insurance Scheme.
It’s hard to see how this will lead to anything other than a shift in the tax burden towards individual taxpayers – at least in the short term. This is unless company tax cuts are balanced with substantial, not modest, cuts to personal income taxes as well.
It seems Scott Morrison will be banking ever more on a strengthening economy to support Australia’s taxation revenues into the future.
Population growth has profound impacts on Australian life, and sorting myths from facts can be difficult. This article is part of our series, Is Australia Full?, which aims to help inform a wide-ranging and often emotive debate.
Western Sydney is one of the fastest-growing regions in Australia. It’s also one of the most culturally and linguistically diverse, as a key arrival point for refugees and new migrants when they first settle in Australia.
Various publicfigures and media outlets have connected asylum-seeker intake and immigration to traffic congestion and queues at hospitals in Western Sydney.
However, this kind of reaction can pin the blame for infrastructure and affordability problems on culturally diverse populations who may have already lived in Australia for many years, if not several generations.
Growth from international and domestic migration
Greater Western Sydney includes Blacktown, the Blue Mountains, Camden,
Campbelltown, Canterbury-Bankstown, Cumberland, Fairfield
Hawkesbury, Liverpool, Parramatta, Penrith, the Hills Shire and Wollondilly.
We examined census data compiled by WESTIR Ltd, a non-profit research organisation based in Western Sydney, partly funded by the NSW Department of Family and Community Services. These data show that Greater Western Sydney’s population increased by 9.8% between 2011 and 2016. Over the decade from 2006 to 2016, it grew by 16%.
About 55% of those living there were born in Australia, and about 39% where born elsewhere (the remainder did not state their place of birth). Most put English or Australian as their first response when asked about their ancestry.
New births are slightly down in the region, meaning growth is coming from other sources. This includes new international migration arrivals, but also incoming residents from other parts of New South Wales and interstate.
Greater Western Sydney has long-established cultural and linguistic diversity. The percentage of residents born overseas has increased from 34.1% in 2006 to 38.7% in 2016. Overall, the west accounts for 50.2% of the overseas-born population for the whole of metropolitan Sydney.
Reasoned debates on sustainable migration intake levels are a crucial part of discussions of urban and regional growth. There are valid criticisms of “Big Australia” policies, based on resource and environmental sustainability.
But while the number of new arrivals settling in Western Sydney has increased steadily since the second world war, with a significant jump over the last decade reflecting accelerated skilled migration policies to fill labour shortages, the majority of overseas-born living in the region are long-term settlers who have been in Australia for ten years or more.
Increasing diversity does not always mean more new migrant settlers
The data show that 64% of Western Sydney residents have at least one parent born overseas. This is greater than the number of those born overseas. This correlates with national data indicating that Australian-born second-generation migrant residents outnumber those born outside of Australia.
So while critics may look at non-white Western Sydney residents and assume they are recent migrants, what they’re often really seeing is multiple generations of multiculturalism. Most of these people are long-term local residents, not necessarily a sudden influx of new arrivals.
In addition, not all overseas-born residents are permanent settlers. Australia takes far larger numbers of temporary entrants than it has in the past. Most of these temporary visa holders, such as international students and temporary skilled workers, live in major metropolitan areas and their surrounds, like Western Sydney.
While some portion of these populations do stay on longer-term, they are not all permanent settlers who will add to long-term population growth. Net migration figures, which take into account people who depart Australia every year as well as arrive, and exclude short-term visitors, have generally been decreasing over the past six years.
Who do we define as ‘migrants’?
New Zealand citizens moving under Trans-Tasman agreements and migrants from the United Kingdom are still among the largest migrant groups in Greater Western Sydney.
In many local government areas in Western Sydney – such as Wollondilly, the Hills Shire, Penrith, Hawkesbury and Campbelltown – England and/or New Zealand feature in the top five countries of birth of overseas-born residents.
If anxieties about migration and population in Western Sydney are based on genuine sustainability concerns and not xenophobia, why target mostly refugees and non-white migrants? Why focus only on areas with large non-white and non-English-speaking background populations?
Migrants do use infrastructure, but also drive economic and jobs growth
It’s never as simple as one new arrival “using up” an allocation of limited resources, whether jobs, housing, or seats on trains. In fact, new arrivals fill the gaps of an ageing workforce, and current migration policies are targeted to favour younger migrants and specific skills shortages.
Western Sydney, like many regions in Australia, has an ageing population. Residents aged 65-74 years increased from 6.2% in 2011 to 7.2% in 2016.
Infrastructure problems are also problems of policy, planning and funding, rather than just population numbers. Problems in transport and health infrastructure in Western Sydney cannot be easily solved by reactive anti-immigration attitudes or policies.
Cuts to programs like the humanitarian program or skilled temporary work visas, where the intake numbers remain relatively small as a proportion of the overall population, will not solve those infrastructure problems.
Western Sydney is growing, and with growth comes growing pains. But equating the region’s rich cultural diversity with a population crisis is the wrong message to send.
You can read other articles in the Is Australia Full? series here.
The religiously motivated terror attacks in France last week have exacerbated anti-Islamic sentiments across Europe, with a record 25,000 people joining anti-immigrant protests in Germany on Monday.
But even as polls show anti-Islamist sentiment rising, Islam is the fastest growing religion in Europe. Nearly 5 million Muslims live in France, the largest Muslim population in Europe, and some 4 million live in Germany.
In the video above, TIME foreign correspondent Simon Shuster discusses how French colonialism and immigration policies throughout Europe helped fuel migration from the Muslim world.
The federal election is over and the Coalition is now in government. Already there is a growing dissatisfaction with the new Abbott-led government over a wide-ranging series of issues including nepotism, asylum seeker policy, the environment, a lack of governance, etc. There is also continuing debate within the various opposition parties concerning their future direction, policies, etc. Yet for the Greens, the future is questionable, with some believing the party to be in serious decline – even among those within the party.
The link below is to an article reporting on the turmoil within the Greens party.