Australia's GDP per capita is stationary, and resources are falling

The real problem we have which is causing the most damage to Melbourne is the increasing population.  It is not increasing our GDP per capita.  The small stable population countries have the highest GDP per capita.
William Bourke has published a severe critique of Australia's economic policy on ABC's the Drum.

He notes that while total GDP has risen, this is almost entirely due to population growth.  Per capita GDP, which is what really matters to most of us, is stationary. And Australia's abnormally rapid population growth brings many economic ills (as well as the obvious environmental and resource ones).

This article can be read as a companion to an earlier piece of his on The Drum, where he argued that the infrastructure cost we bear for each extra Australian may be as high as $500,000.  (Compare that with the puny $2,000 per year profit that universities make per overseas student -- many of whom stay).  See


It's not the economy, stupid. It's just stupid economics.
By William Bourke
ABC’s The Drum, 14 March 2012.
We've recently seen Labor attempt to re-assert its economic credentials. Media headlines have proclaimed that 'Labor keeps economy, jobs in focus'.
Of course, when it comes to the central issue on voters' minds, it's the economy, stupid!
Throughout its tumultuous reign, Labor has never been shy of trumpeting its twin achievements of jobs growth and gross domestic product (GDP) growth. Remember how we escaped the GFC 'unscathed'? Just recently on 7.30 the Prime Minister asserted:
Look, we have come out of the global financial crisis strong, we acted to save jobs and we have created more than 700,000 jobs, that's a good thing.
But there's always more to a story than the headline. So let's look at these two 'achievements'.
GDP of course refers to the market value of all final goods and services produced within a country in a given period. Now I'd argue that this is a crude and misleading indicator of human wellbeing, but putting that aside, surely the statistic we should be more focused on is GDP per capita. There's no point having a bigger GDP cake if you get a thinner slice.
So what is Labor's record on GDP per capita since around the GFC period? The Macro Business Superblog recently noted:
A 0.53% increase in GDP per capita, to $59,060 (or $14,765 per quarter) over 3.5 years. Half a percent…over 14 quarters. Annualise that and it's barely statistically perceptible. Measured against the trend rate over the last 10 years of 1.5% growth per annum, and its nowhere near trend.
So much for 'economic growth'. But it gets worse. We actually had negative growth through the 2008 and 2009 calendar period when GDP per person fell during three out of five consecutive quarters. Rapid population growth of over 2 per cent per annum outstripped and undermined economic growth.
Now regardless of whether even GDP per capita is an appropriate measurement of human wellbeing, with a stable population it would immediately be clear whether GDP growth was actually real economic growth. But that seems inconsequential to Labor. As pointed out by Professor Bob Birrell et al at the Centre for Population and Urban Research at Monash University in Immigration and the Resources Boom Mark 2:
Two contending pressures have shaped the Australian Government's population policy. One reflects employers' desire to sustain a rapidly growing workforce and [the other] a high rate of population growth so as to maximise aggregate economic growth.
In other words, the Government's ideal aggregate GDP target (of over 3 per cent per annum) is driving the push for ever-more population growth. More people means more aggregate economic activity, which is the main indicator used to assess economic performance. But it's obvious to even high school economics students that this is a flawed approach. The whole point of driving higher GDP is to enrich Australians, yet achieving higher aggregate GDP just by adding more Australians fails this fundamental test.
And what about Labor's jobs growth performance? Again population growth is distorting the picture. The job rate is the key, not the number of new people with jobs. It's easy to create 'jobs growth' when you are adding over 1 million people to the population every three years. In fact, over the whole period of the Labor Government, the unemployment rate has actually risen despite the creation of "more than 700,000 jobs", many of which were not even full time.
So what do we each get for all the added work and GDP? Not more value-added exports, nor higher standards of services such as education and health. In effect, we simply have more and more people servicing each other and building the housing and infrastructure that the added people require – largely at the expense of the pre-existing residents who didn't require it. But with more productive industries like manufacturing closing down due to the strangling effect of the high dollar, Australia is becoming increasingly reliant on imports of consumer goods, food and so on. The result is a negative and ever-growing structural impact on our balance of payments and a burgeoning foreign debt.
Where are the mainstream media and federal opposition in all of this? Why are they not pointing out the bleeding obvious on Labor's claimed jobs and GDP performance? The only thing to say about the Coalition is that they have the same strategy as Labor. John Howard pushed population growth to record levels, doubling net overseas migration to around 200,000 per annum and introducing the 'one (more) for the country' baby bonus. Big business – including the major commercial media companies – benefit from ever-growing customer numbers. This explains why they rarely question population growth and usually claim it is 'inevitable'.
So it's left up to grass-roots community organisations to point out that population growth does not drive prosperity. When you look around the world the evidence is overwhelming. Seven of the world's top 10 per capita wealth nations have relatively stable populations under 10 million - and the poorest countries per capita are usually those with the largest and fastest growing populations.
Even if population growth could go on forever, which we all know is ridiculous, we shouldn't choose to sustain it if it isn't of any benefit. We've been chasing mirages for too long, and ignoring the endless benefits of the alternative. For a start, a stable population would help stabilise the cost of living and doing business. It would wean big end of town CEO's off their indolent population growth-driven profit increases, and encourage them to invest in productive innovation, and better training and education.
Big Australia? It's not the economy, stupid. It's just stupid economics.
To further explore issues of population growth, GDP and human wellbeing, the Stable Population Party is screening the Growth Busters: Hooked on Growth documentary around Australia. from March 14.
William Bourke is founder and national convener of the federally registered Stable Population Party. View his full profile here.