Comment from Australia

THE Rudd government should be wary about using high levels of immigration in coming decades as a means to counteract the decline in productivity resulting from an ageing population because more over-55s are staying on in their jobs, a population expert warns. Monash University demographer Bob Birrell said Treasury’s new population estimate for Australia — 35 million by 2050 — was based on immigration levels of about 180,000 a year, a rate that may not be necessary to keep the economy running and will be difficult to provide for in terms of urban infrastructure and services.

“The government seems to have bought the argument that business in Australia needs a high amount of labour force growth to keep it going in the future. The rest of us are going to have to bear the consequences of that,” Professor Birrell said yesterday. “The government doesn’t seem prepared to explore how we need to make social adjustments; rather, they are relying on the prop of bringing in more people of younger ages to essentially put all the older people to bed.”

In a speech yesterday to launch the new Australian Institute for Population Ageing Research at the University of NSW, Wayne Swan noted the previous estimate of Australia’s future population contained in the last intergenerational report in 2007 — 28.5 million by 2047 — was likely to be well short of the mark. “Australia’s population is projected to grow by 65per cent to reach over 35 million in 2049, up from around 21.5 million people now,” Mr Swan said. “This … is largely driven by a greater number of women of childbearing age, higher fertility rates and increased net overseas migration.”

Mr Swan said while the number of people of working age would grow by 45 per cent over the next 40 years, those aged 65-84 would double and those 85 and older would increase by 4.5 times. “Population ageing will lead to slower economic growth … and it will lead to increasing levels of Australian government spending per person. Together these factors will contribute to significant ongoing financial pressures,” the Treasurer said.

Professor Birrell said research at his Centre for Population and Urban Research earlier this year showed older workers, those aged 55-plus, were tending to stay on in the workforce longer than anticipated. With sustained high levels of immigration added into the workforce mix, the employment prospects of younger Australians were being compromised.

Australian National University demographer Peter McDonald said the recent increase in the birthrate in Australia, up from 1.79 to 1.93 in the past two years, was encouraging. “The lower the birthrate, the more migrants you need,” Professor McDonald said. “If we had birthrates like those in Germany or Italy we would need to look at greater numbers of migrants.”

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