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Why Australia’s roaring population growth won’t last

The older I get; the more accountability matters to me. Not that it didn't matter before ­– it did – but perhaps accountability feels rarer in today's fast-paced world?

In this article, I look to hold myself accountable by revisiting some of the topics I've written about over the last few years to see if what I said then still holds true today, or whether new information has come to light that's changed my perspective.

Baby bust: Australia's infertility problem

I first wrote about the worrying trends in global fertility rates in 2021. I'd recently read some of the amazing work that award-winning reproductive epidemiologist Dr Shanna Swan had published in this area, and it was frightening.

Swan’s research found that global sperm counts had dropped by approximately 1% per year, every year, for the past four decades. In total, sperm counts had slumped 40% in the 50 years to 2017. We’d also seen a 1% annual fall in testosterone levels and a 1% annual rise in miscarriages and testicular cancers.

So, what's the situation today? Well, the total fertility rate in Australia dropped as low as 1.59 births per woman in 2020. It has since recovered to 1.7 births, according to the latest statistics. But this is still far below the 2.1 figure required to sustain the population.

Australia’s population rose by 497,000 in calendar 2022, driven by a record net overseas migration of 387,000. As shown below, the Federal Budget forecasts Australia’s population will grow by 2.2 million people to 28.2 million by 2026-27, mainly driven by migration. The impact on housing, rents and house prices in the short term could be profound.


Source: 2023 Federal Budget

Nevertheless, taking a longer-term perspective, the 2022 Centre for Population Statement predicts the nation's annual population growth rate will not have recovered to pre-pandemic numbers within the next decade. Instead, it's predicted to fall gradually until at least 2033, slipping from 1.4% growth per year to 1.2%. This will take the population to 30 million by 2032/33.

In other words, while Australia's total population is predicted to rise over the next 10 years, the rate at which it is growing continues to slow down.

Globally, it's a similar story. Since 2020, Dr Swan has been busy keeping her research up to date, and what she's found isn't comforting.

Not only did she discover that sperm counts are falling rapidly in Africa, South America and Asia – regions that weren't well covered in her previous studies – but the pace at which they are declining worldwide is speeding up.

Her analysis shows that between 1972 and 2000, sperm counts were dropping by roughly 1.1% a year. From 2000 onwards, however, that rate has increased to 2.6% every year. Far from plateauing, the problem is getting worse, faster.

As a mother who recently gave birth to another baby boy, the data is upsetting. I would hate for my children to grow up in a world where they may struggle to raise a family. I'm sure every parent feels the same.

In South Korea, women are already having less than one child (0.89) on average during their lifetime. Replicate that on a global scale and the results are potentially devastating.

Many countries are now struggling to solve the problem of ageing populations. With fewer younger people to support older generations, we may see less innovation, poor economic growth, and a stagnation in living standards.

When I first covered fertility rates and ageing nations, I said there were many reasons to remain optimistic. In Australia, we have an excellent pension system, and I was confident that we could continue to drive growth, the economy and innovation.

While I hope that's still true, frankly, I was taken aback at how much worse Dr Swan's new data is. From an accountability perspective, perhaps I was wrong to be so optimistic in 2021, but it has nevertheless reinforced my belief that this remains a key issue that needs more focus.

The good news is that we now know some of the causes of the problem, so I'm still hopeful that solutions can be found.

The generation blame game: then and now

Generational theory was a topic that has fascinated me for a long time. I first learned about it nearly 10 years ago and have written several articles on the subject since.

Most recently, I talked about how the headlines were full of stories of generational conflict. If the media and politicians were to be believed, older and younger generations were constantly at each other's throats.

I admitted I was sceptical of that narrative. Delving a little deeper, contemporary research showed the generations were actually closer than ever before – figuratively and literally. Not only were more Australians living with their parents for longer, but the Bank of Mum and Dad was the country's fifth most popular lender.

Far from being at war, the various generations were offering each other support during difficult times. For example, two-thirds of grandparents were providing childcare to ease the burden on struggling family members.

I welcomed the news that different demographics were working together, especially with a huge generational wealth transfer on the horizon. Over-65s in Australia were predicted to pass down or spend an estimated AU$3 trillion between 2020 and 2040.

That was then, but what about now? Firstly, I think generational 'theory' has become a bit passe. While I was once a big fan, it all feels a bit dated now.

More often than not, it has seemed to drive a wedge between different age groups, rather than offer meaningful, actionable insights into people’s lives.

In fact, a year after my article was published, a major survey from the Australian Human Rights Commission (AHRC) found that people are rejecting the concept of ‘generations’ entirely.

The vast majority of Australians don’t identify with labels such as ‘boomer’, ‘millennial’ or ‘Gen Z’. They view people as individuals with unique experiences and perspectives rather than pigeonholing them based on age.

I checked Google searches for the words ‘millennial’ and ‘boomer’ in Australia and found they peaked in November 2019, and have since mostly petered out.

One possibility is that the Covid-19 pandemic helped remind us all how much we appreciate our loved ones, whatever their age? Or perhaps we've grown out of blaming other generations for the problems we collectively face as a society?

Whatever the answer, I believe this is good news for the looming generational wealth transfer. The latest stats from the Productivity Commission echo my previous figures – around $3.5 trillion will change hands between the generations over the next two decades. By 2050, baby boomers will be handing down $224 billion a year in inheritance to millennials and Gen Z.

And parents are already helping their children today by contributing an average of $70,000 to their children's home deposits to help them get on the property ladder, with a third expecting to be never paid back.

Commenting on the AHRC report, Age Discrimination Commissioner Dr Kay Patterson said:

"Although antagonism between the generations is often seen as a given, I was struck by the warmth expressed by focus group participants towards members of age cohorts other than their own."

Final thoughts

Staying accountable is important. I believe there is tremendous value in revisiting our previous positions and examining them through a present-day lens.

Sometimes we're wrong, and it's crucial to own that. In hindsight, I think generational theory has had its day and I need to adjust my thinking there as the world has probably moved on. And the fertility crisis is perhaps even more serious than I originally gave it credit for.

Ultimately, the lessons we learn from being accountable to ourselves arm us with the information we need to better navigate the world. Isn't that worth getting things wrong every now and then?

 

Emma Davidson is Head of Corporate Affairs at London-based Staude Capital, manager of the Global Value Fund (ASX:GVF). This article is the opinion of the writer and does not consider the circumstances of any individual.

 

33 Comments
Greg Byrne
August 21, 2023

Some terrific comments left. I would like to add a few points also. I believe there is a combination of factors which have led to a decline in fertility rates in Australia. There are the usual suspects like declining living standards and people pursuing careers over family and reduced family so as less expense and more prosperty, cause let's face it, society is geared to micro manage and extract as much taxes and profits from the family upbringing as possible. My son's in there 20's put it well when they have said, "why the hell would I want to bring children into this shit of a world". This sends a clear message that our younger generations don't have the enthusiasm and hope for a better world that we once had. They have the awareness and wisdom at a younger age to realise that democracy is very much in decline, trust in our governments and each other is pretty much non existent, our freedoms are rapidly eroding, and our choices are declining if not non existent. Quality of life/satisfaction seem almost from a bygone era. The simple things in life that gave us security because of good management from our parents, grandparents, and good governing, so sadly seems absent now. You know it's bad when figures released say to afford a house in Australia you need 2.6 incomes, mothers with children sleeping in cars in high numbers, and people switching off electrify as unaffordable. Shame on us all for wasting what we had.

john robertson
July 28, 2023

Australia is one of the most under populated country in Asia, while you have billions wanting to immigrate here there is no chance ever that both lower property values & lower population will ever be a factor here.

Cynic28
March 10, 2024

Billions? I don't think so. Frankly, there are too many European and Asian migrants who don't speak English or bother to learn and that should be a prerequisite for immigration.
Then you've got the extremely low vacancy rental rates in all capital cities and a disinclination to move to the regions/country areas. No wonder the towns are dying.
Then you've got problems with the Murray/Darling River system and others.
In short, where's the water, housing, food, fuel coming from to support these new "billions"? Seems quite hysterical to me.

Matt Moran
July 19, 2023

When we were about 12-13 million, Gough Whitlam had this to say:
"I do not envisage any dramatic increase in our present population, and indeed I would not wish to see one. I expect vast improvements in our roads and railways, new childcare centres and health centres, better hospitals and schools and improved standards of public and private housing."

– Australian PM Gough Whitlam July 1974

We can certainly continue rapidly growing out population by leveraging high immigration levels, but we are kidding ourselves if we believe the benefits will outweigh the costs or that the decline in children-friendly conditions will ease; ergo the disincentive to have more children will only grow as we continue to engineer more population growth.

Victoria has recently pulled out of hosting the Commonwealth Games citing ballooning costs as the reason. NSW will not pick up the option due to budgetry concerns. Why? Because we have deliberately crush loaded additional millions via historically unprecedented immigration levels into our cities and ignored the ballooning costs of retrofitting infrastructure, all the while, sacrificing living standards, a promising future for our children and back yards to do so.

While we might count the costs of growing our population in GDP via things like government spending, at the end of the day, it's trying to lift ourselves up by pulling on our shoe laces.

Things can really only improve if we allow our population to stabilise and even decline a bit, thereby stopping continued over-development, over inflation of assets (including housing), and refocus our efforts on building a sustainable, resilient economy where genuine productivity, living standards including education and environmental health etc are our how we measure how well we're doing rather than the post WW2 recovery GDP metric.

Emma Davidson
July 25, 2023

Wow, thanks for sharing that Matt.

Matt Moran
August 19, 2023

You're welcome Emma

john robertson
July 28, 2023

Our living standards are 5 times more than most of asia & we do live in that part of the world & while you have billions wanting a better place to live Australia will always be the No1 destination for those people to live, & while i have a heritage of poor Scottish & English people migrating here in the 1880s & by the way did make a fortune in hardware chain in Victoria, i never will deny other people the same opportunity to come here & do so, if fact i have brought 3 of my wife's nieces here from the Phillipines to become nurses & gain there residency status. Gdp will grow & as most think that housing is a ponzi scheme here it is Australia's most keen asset as Singapore has been for them, in fact our population is so tiny compared to the rest of Asia in fact the rest of the world, Goughs statement was laughable as most of his contributions very similar to Albo, one thing I agree on is not a Government & society to continue to disregard building Business as like the US but unfortunately here we have successive labour governments & now totally run State & federal pushed wages up so high the competitive advantage has been lost for good, the Europe model has always been a basket case.

Matt Moran
August 19, 2023

Whitlam's statement is borne out by the ongoing housing crisis, the decline in amenity, overcrowded classrooms and indeed all too few schools being built to accommodate the additional 300-400,000 a year we've been growing by etc by the regular admissions from politicians that our infrastructure deficit is ballooning with the Abbott government putting it at 800 billion not so long ago.

You might wish to look into diseconomy of scale as it explains why infrastructure costs grow exponentially once you exceed a sensible population size based on carrying capacity.

The simple reality is Australia has a habitable area about the size of New Zealand and cannot sustain a large population.
http://www.australianpoet.com/boundless.html

It is ironic that you're answer to overcrowding in Asia and lifting living standards is to continue with mass migration strategy as though that isn't rapidly delivering a trajectory towards the living standards here that migrants are trying to get away from.

It is further extremely sad that the small strips of habitable area that we share with many iconic species are fair game for endless cookie cutter developers and lord knows how many food bowls and our better quality farmland has been developed over.

Finally, bear in mind that further rapid population growth will continue to skew investment into rentierism and starving the broader economy including hollowing out the middle class and disadvantaging our young.

Also, it's important to recognize I am not saying no migration, i am saying we need to stop using migration as a means by which we rapidly grow our population.

john robertson
July 28, 2023

Australia will always be a No1 destination for Migrants & housing in Australia will always be a inflated asset in Australia theres nothing wrong with either.

JanH
July 13, 2023

Well said. For anyone interested in what the future holds for future generations, please read the Rare Earth Metals War: the dark side of clean energy and digital technologies, by Guillaume Pitron, Scribe 2020. also avaialble from your public library.

Peter
July 10, 2023

Fascinating. I wonder if living standards for future generations can be maintained. My fuzzy memory from high school economics and Gittens is that GPD growth is driven by population, credit and productivity. Looks like the first two have had a good run, I guess a lot relies on productivity now?

Emma Davidson
July 10, 2023

Hey Peter, thanks again for the comments. You raise important points that are a worry. I guess you can take comfort that the way things are headed with our fertility rates, the human race will be contracting by the turn of this century. The inability to have children will be very difficult for a lot of people but perhaps that is what is needed to restore equilibrium.

michael
July 10, 2023

I agree with the concept of Earth being overpopulated with humans. If the population decreases, broad measures like GDP will likely decrease. But living standards may not: necessities & some luxuries may just get cheaper due to lower demand, & a generally less stressed planet.

Emma Davidson
July 10, 2023

I like this take Michael, thanks for sharing. No doubt we will learn to adapt, us humans are quite good at that ??

JanH
July 07, 2023

The world faces an existential catastrophe due to over-population of humans. Perhaps the slowing population is a sign of ecological equilibrium in play.

Amanda
July 07, 2023

Agreed - at some point there has to be a peak and decline. While it may mean taking an economic hit, the sooner the better from an existential perspective.

Emma Davidson
July 07, 2023

I tend to agree Amanda but it does change everything.

Emma Davidson
July 07, 2023

Hi JanH, thank you for your comment and yes, a slowing population was inevitable at some point. Is it coming sooner than people appreciate I wonder.

Lynda
July 07, 2023

I agree. There are far too many of us and we are destroying our planet at an incredible rate.

Andrew Smith
July 07, 2023

No. Not when, according to the World Bank, fertility rates are in decline everywhere (ex. Georgia, Israel etc.) and large nations' fertility rates have dropped i.e. China below replacement, or near to falling below replacement in India, while sub Saharan Africa there is growth but many inc. Nigeria have slowed too.

https://data.worldbank.org/indicator/SP.DYN.TFRT.IN

Basic maths tells us that the headline population, derived from fertility rates, will probably peak by mid century (vs. UNPD predictions); explained well by Canadian researchers Bricker & Ibbitson in 'Empty Planet', who predict precipitous decline after mid century.

Locally headline population growth is coming from temporary resident churn over e.g. students, backpackers, Kiwis etc., but not from below replacement fertility and modest permanent migration (capped 190K = 0.75%).

After the oldies and the baby boomer 'bubble' passes, Australia's population pyramid will become less top heavy and a bit younger due the dominance of the baby boomers.

Fiona Shelton
March 07, 2024

I think the human race is becoming very unhealthy with obesity due to fast food etc and this will have a huge check on world population growth. Younger generations will not live long and infertility will be rampant due to bad health.

Peter Strachan
July 07, 2023

Emma, human numbers have risen by 6 billion over the last 100 years, and the last billion arrived in just 11 years. Population growth has never been stronger, rising at around 80 million pa over the past 50 years.
Nature does no see percentages. Nature "sees" the number of feet and how heavily each stands. No wonder sperm counts are falling as environmental stress and pollution impact human biology.
Virtually every serious issue facing humankind can be sheeted back to the impact of overpopulation. Anthropogenic climate change is a by-product of emissions from ever more people becoming ever more affluent. Massive inequality within and between nations grows as wealth is concentrated in the top 1% while generational inequality is widening as rising population numbers drive up accommodation costs, cause more noise, air and water pollution while clearing of land for agriculture and human habitation destroys native animal habitat, including bees, who we rely on for food production.
Any farmer knows that the herd performs poorly if a paddock is over stocked and eventually the paddock becomes so degraded that it loses its ability to support any life.
The last thing we ned to be concerned about is population stabilising of declining. We are living well beyond our means on a finite piece of rock! The growth mantra is no longer valid and never was.

Emma Davidson
July 07, 2023

Thank you for this comment Andrew, wow. I am going to take a look at that book Empty Planet, it looks fascinating.

Emma Davidson
July 07, 2023

Hi Peter, thank you for taking the time to comment as you have, I appreciate it. Your first stat is exactly the point:
'human numbers have risen by 6 billion over the last 100 years' Anyone alive has only ever known population growth and most elements of financial markets are predicated on the global population continuing to grow. That growth trajectory is changing (and quickly) and I believe big changes (good and bad) will result as we have to adapt to that change.

Peter Strachan
July 08, 2023

Emma, for the survival of modern civilisation, we must contract the entire human enterprise on Earth.
You touch on the problem. Humans have evolved over the past 300K years when nothing much changed from one generation to the next over millenia. Today we see that people have a sort of starting point of the world from when they were born. Small children will tell you that in the "old days" aeroplanes had propellors! Forget horse & cart.
Since the start of the Industrial Revolution, we have grown used to change at around 3% pa, which means that consumption doubles every 23 years, but in a finite space materials will be consumed after 10 doublings, so we are say 220 years into a phase where scarcity will and is taking effect. For instance, at the current pace, and to decarbonise, over the next 20 years, the global economy will require as much copper as has ever been mined!
No wonder we see more wars, crumbling climate, nation-states disintegrating and a rise in the number of people who are food insecure. In the face of these massive problems for the naked ape, concern about dealing with a declining population must be at the bottom of a long list of things to be worried about.

Arcturus
July 06, 2023

Yes, well said Neil - but we're not supposed to question these things... And what ever happened to Natural Law or Economics with Justice ?

Emma Davidson
July 07, 2023

Please can we never stop questionning everything Arcturus, it is essential that we have differing views and oppinions.

Neil
July 06, 2023

The discussion on fertility above while no doubt grounded in fact, is superficial in its scope.

What about the impacts of decadal changes in feminism (a woman's place is no longer in the home / kitchen, but now in the workplace), contraception, IVF and other medical advances?

Emma Davidson
July 07, 2023

Thanks for the comment Neil, I appreciate the time. The research that has been done on birth rates has undoubtedly taken into account the decadal changes in 'a woman's place' but the fertility of men and women is where the issue is to my mind. For those that do want to have children, it is becoming more and more difficult and that is the worry.

Peter Strachan
July 07, 2023

Emma, Australia's population has expanded by 38% or 7.3 million to 26.3 million since Sydney hosted the Olympics in 2000, with about 62% of that rise resulting from net overseas migration. The ABS tells me that numbers ae rising by 1 every 55 seconds, enough people to fill the MCG, 6 times over every year! All these people need food, water, power and a place to live. Population boosters and those fearful of a stable population need to take a good hard look at possible futures, surely?
This pace of expansion is madness, based on a false premise that there is a skill shortage, when in fact we have a "longage" of people wanting goods and services. We have enough nurses and teachers, but there are too many sick people and students, as a result of our third-world pace of population expansion.
The more people who arrive, either the 108,000 net births minus deaths (yes we still see 3 births for every two deaths because of the shape of our demographic profile), the less of everything there is to go around on a finite continent. We are degrading viable agricultural land, extracting finite, non-renewable resources for export and covering once productive food-producing areas or land that was habitat for native plants and animals, with tar and cement! What sort of future are we leaving our children and grandchildren when housing costs double every 10-12 years? I bought a modest 2-BR terrace house in North Carlton for $98.5K in 1984, which I sold 3 years later, but that house is now on the market for ~$1.5 million. How can people cheer for this sort of Ponzi scheme?

JanH
July 13, 2023

Hi Neil,
I agree; the biggest boon for women worldwide and curbing global population has been reliable contraception. The education of women has also been shown to improve a country's GDP and boost economic growth. After all chaining women to the kitchen sink means at least 50% of the population does not contribute to the economy which means men must work harder.

Michael2
July 17, 2023

I always found it tough in the workplace and to get established financially and I can’t imagine a world where women are chained to the kitchen sink. That is just making life twice as hard.

A lot of the women I know are a lot more ambitious than me and competent, I feel lucky to have been part of a different society.

john robertson
August 08, 2023

Peter if you think you can ring fence Australia from new immigrants & provide a utopia for you grandchildren
your sadly mistaken, Australia will be a much poorer place & as the mining boom which is the real Ponzi scheme of this country dissipates you need more people not less with higher skills to increase the productivity that is required to keep living standards, winning has been nearly the only driver of this for 80 years without it we would still all be living in tin sheds, Emma you just immigrated here & as you surely know the Government expenses here are far outweighing the income going to be received over the next decades ahead & without any increase in immigration there will be zero productivity & living standards will decline as tax on all front will increase on a very high level as the current Government has bo indication or silliness to reduce spending.

 

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