Ruddock, P - People and Place Vol 6 No 2

THE COALITION GOVERNMENT’S REACTION TO SCIENTISTS’ CONCERNS ABOUT POPULATION POLICY

Philip Ruddock¹

Philip Ruddock,, the Minister for Immigration and Multicultural Affairs in the Coalition Government, responds. An appendix provided by the Department of Immigration and Multicultural Affairs outlines the basis of the population projections used by the Department in advice to the Minister.

18 May 1998
Dear Dr Jones
Thank you for your letter of 11 March 1998 to the Prime Minister concerning the development of a national population policy. As the issue of population policy falls within my portfolio responsibilities, your letter has been referred to me for reply. ...

...Because of the complexity, subjectivity and uncertainty associated with the range of factors that might determine an optimum population target, both inquiries [NPC 1991, and Jones 1994] recommended that identification of an optimum population target is not a practical exercise.

Both inquires also highlighted the very limited range of policy levers that governments have available to influence population size and distribution. This is particularly the case for a liberal democracy such as Australia where many of the kinds of measures generally associated with population policies in less democratic countries (e.g. control of internal mobility and birth control programs) would not be acceptable in our society. This is perhaps one reason why few developed and democratic countries have explicit population policies.

Leaving aside the difficulties associated with identifying an optimum population target, I share your view on the importance of well informed public debate about our population trends and prospects and the role of immigration in this. Over the past two years, I have taken major steps to make available a range of data on our immigration intake and its impact on population size and distribution. This is something that I will continue to do in order to promote an informed debate on our population trends and prospects.

I can also assure you that, contrary to popular belief, our population trends and prospects are a fundamental element in the Government’s consideration of the annual immigration intake.

On the basis of current immigration policy settings and a below replacement and declining fertility rate, it appears that Australia’s population growth rate will of itself decline steadily over the next 50 years. By the middle of next century, our total population may will have peaked at somewhere around 23 million. I believe that most Australians would not regard this as an unreasonable prospect. I also note that because of our below replacement and declining fertility rate, Australia’s overall population is likely to be declining in the second half of the next century. The overall population of some States of Australia appears to already be approaching a peak.

During my annual consultations on Australia’s immigration intake, many people called on the Government to develop a formal population policy. Closer examination generally revealed that at the core of these requests was a desire for either a major increase in immigration levels or a major decrease.

A number of business and industry groups, as well as the Victorian State Government, have called on the Government to increase the skilled immigration intake significantly in order to arrest the decline in our population growth rate and to reduce the impact of an ageing population. I have made it clear that while I agree that skilled migration has a positive economic impact, this is only the case if high standards are maintained in terms of skill levels, age and English language ability. Maintenance of high standards places a very real limit on the extent to which skilled migration numbers can be increased.

Not all States are interested in attracting a larger portion of the intake, including skilled migrants. For example, the NSW Government has indicated that it would like to see some tempering of the number of migrants that settle in Sydney. To this end, I have established a range of State-specific migration mechanisms to enable State/ Territory Governments and major non-capital city regional authorities to have a greater input into migrant selection. These mechanisms can be used by interested governments to attract the skilled migrants they consider they need. The more that these mechanisms are used, the greater the prospect of reducing the proportion of the skilled intake settling in Sydney. To take this objective forward, a Commonwealth/ State Working Party has been established to look at long-term skilled migration options that might make greater use of the mechanisms that have been developed.

With regard to the ageing of Australia’s population, extensive research, both in Australia and overseas, has concluded that immigration is a very inefficient means of reducing the impact of ageing. This is because massive levels of immigration would be needed to have an appreciable impact on the proportion of the population that is aged remembering that ageing is a gradual process and that the migrants who enter would themselves be part of the aged population in 30 to 40 years time. While the age profile of the immigration intake is important, I am not convinced that immigration can be used in any significant way to reduce the ageing of Australia’s population.

A number of participants at my community consultations argued, as you have, for a general reduction in immigration for environmental reasons. However, a sensible discussion on reducing the immigration intake must consider the various components of immigration and the effects of reducing any one or all of these. In this regard, the major focus would be on either the Humanitarian program, the Family Stream and/or the Skilled Stream of the Migration (non-Humanitarian) Program.

As a relatively affluent nation with an outstanding humanitarian record, we have a moral obligation to accept our fair share of humanitarian entrants. While we must always consider the budgetary and economic costs associated with humanitarian entry, I believe that at 12,000 places, our current Humanitarian Program is a sensible and balance response to our humanitarian obligation.

The planning level for the Family Stream in 1998-99 will be 30,500. The vast bulk of this will be the immediate families (ie spouse/fiances and dependent or adopted children) of Australians. This is particularly the case now that the Government has taken significant steps to reduce the entry for parents and other aged dependent relatives. A Family Stream of 30,500 represent a very substantial reduction from the Family Stream under the last year of the Labor Government (ie 1995-96). As we have also now decisively tackled the problem of sham marriages, there is little scope to further reduce the Family Stream unless there is a decline in the number of Australians who marry people born overseas and then choose to make Australia their home.

The planning level for the Skilled Stream in 1998-99 will be 35,000 places (ie the same as for 1997-98). Research has consistently shown that the Skilled Stream has a highly positive impact on the Economy (including in per capital terms), on Government finances and on employment levels. These are the migrants that create more jobs than they take. Any reduction in the Skilled Stream would be at a substantial economic and budgetary cost as well as a negative impact on employment. We must not forget that our ability to afford programs to address environmental problems are often dependent on our economic and budgetary success.

I do not want to suggest that it is not open to the Government to in future reduce numbers of entrants under any of the above categories (at least to some degree). However, against the background of our declining population growth rate, I have seen little evidence to suggest that the possible environmental benefits of reducing numbers in any of these major immigration categories would outweigh the very significant social, international and economic costs. If you believe there is such conclusive evidence that weighs up the environmental benefits against the social, economic and international costs, I would be happy to include it in any future Government consideration of these matters.

Thank you for your interest in these issues.
Yours sincerely
Philip Ruddock

Acknowledgment

^{1 Reproduced by permission of Philip Ruddock and of Dr Alan Jones.

APPENDIX: POPULATION PROJECTIONS TO YEAR 2051
The development of population projections requires assumptions on a range of factors. This inevitably involves a degree of judgement. The following are the assumptions used by the Department of Immigration and Multicultural Affairs (DIMA) in advice to the Minister.
Population projections are based on assumptions of mortality and fertility rates and levels of net overseas migration. In considering these, it is useful to compare assumptions used by the Australian Bureau of Statistics (ABS) in the projections it produced in 1995.
Mortality rates
In its 1995 population projections, the ABS assumed that Australia’s mortality rate would decline to the year 2004 according to short-term rates of decline and from 2004-51 according to long-term rates of decline. While it is possible that life expectancies may increase more rapidly than this, the mortality assumption the ABS has used seems reasonably plausible and has been used in developing DIMA’s projections.
Fertility rates
The assumptions the ABS used in 1995 are that fertility would either remain constant at its 1994 level of 1.85 children per woman or may decline to 1.75 children per woman by the Year 2004 and then remain constant. While these assumptions are both plausible, a more likely outcome is that Australia’s fertility rate will decline further. The reasons for this are that:

Australia’s fertility rate has declined steadily during the 1990s at a rate of around 0.02 children per woman per annum. In 1995, it reached a post-war record low of 1.824. In 1996, it was lower still at 1.796;
the downward trend in Australia’s fertility rate has been replicated in almost every developed nation (and indeed in many developing nations). An article by Professor Peter McDonald published in the last edition of People and Place highlights the trend during the 1990s. It shows that there are very few developed nations that have not experienced a decline in fertility levels during the 1990s. Moreover, there are relatively few developed nations with a fertility rate as high as Australia’s. Some have fertility rates that are extraordinarily low; and
the research into the factors that lead to lower fertility seems to suggest that Australia’s fertility will decline further. Indeed, Professor McDonald and Adrian Hayes of the ANU’s Demography Program in a review of Doug Cocks’ book People Policy: Australia’s Choices indicated that the average fertility rate for industrialised countries is currently less than 1.67 children per woman and falling. In some countries (e.g. Italy), the fertility rate is as low as 1.2 children per woman. They indicated in an article in the Journal of the Australian Population Association in 1997 that,

the total fertility rate (TFR) in Adelaide in 1995 was below 1.67 and the rate for the ACT was 1.69. The Australian rate in 1995 was 1.82, the lowest in (our) history and early figures for 1996 suggest that the TFR fell bellow 1.80. The fertility rate in Australia, as in all other industrialised countries, is on the way down.

Professor McDonald has expanded on this view in an article in the last edition of People and Place.

If we accept that Australia’s fertility rate will decline further over the next 50 years, the key questions relate to the likely average rate of decline and likely level at which the fertility rate might eventually settle. Professor McDonald has suggested that it is quite plausible that over the next 10 years, Australia’s fertility rate might well decline to between 1.7 children and 1.6 children per woman. This would undoubtedly be a rapid rate of decline although it would not be out of the ordinary given the experience in other developed countries. Whether fertility would remain stable after the next ten years or whether it would continue to decline further is another question that we must ask ourselves. Another possibility is that Australia’s fertility rate may decline at a slower rate of say 0.01 children per woman over the next, say, 30 years and then stabilise at around 1.5 children per woman. Of course, it is also possible that Australia’s fertility rate could continue to decline to the kinds of levels that have been reached in countries such as Spain and Italy (e.g. down to levels as low as 1.2 children per woman).
Net overseas migration
Finally there are the assumptions used for net overseas migration. Before discussing
the net overseas migration assumptions that are most plausible, however, it is useful to make a number of general points about net overseas migration.
Firstly, it is important to distinguish between the assumptions regarding net overseas migration that might be used by the ABS and the assumptions that DIMA has used. The assumptions used by the ABS tend to reflect the range of net overseas migration over the past 15 or so years rather than current Government policy settings. This is sensible on the part of the ABS given that future governments may well change immigration policy settings over the next 50 years. From the Government’s perspective, however, it is more appropriate to assume that current and announced Government policy settings will largely remain in place.
Secondly, it is important to remember that even if current Government policy settings remain in place (and the visaed intake is held at 80,000 per annum), levels of net overseas migration will still fluctuate significantly, particularly as a result of changes in the economic cycle. Levels of net overseas migration will always be higher during times of economic growth compared to a period of recession or near recession. In other words, it is dangerous to assume that the level of net overseas migration in any particular year is necessarily representative of the long-term level of net overseas migration under current policy settings.
Finally, it should be noted that there are significant lags between the announcement of immigration policy changes, the implementation of those changes (often via legislative or regulatory changes), visa issue under the new policy and finally the arrival of settlers under the new policy. These lags can often be as long as 12 to 36 months. In terms of the reduced immigration programs that the Government has introduced, the final impact of these policy changes are still working their way through the system and may not be fully reflected in net overseas migration numbers until 1998-99 or even later.
Components of net overseas migration
Net overseas migration consists of three main components — net permanent movements, net long-term temporary movements and category jumping
Net permanent movements
In 1995, the ABS assumed that net permanent movements would be in the range between 59,000 and 83,000. This range is clearly too high given that the revised ABS estimate for net permanent movements for 1996-97 is 55,900. The revised estimate for 1997-98 is 45,000. Because of the lags between visa issue and settler arrival, the estimate for 1998-99 may be lower still (that is, the effects of Government decisions to reduce the visaed intake have not yet fully impacted on settler arrival numbers).
While the 1997-98 figure is a reasonable estimate of net permanent movements under current immigration policy settings, it should be noted that this figure includes around 10,000 net permanent movements from New Zealand. As a long-term estimate of the level of net permanent New Zealand movements, this figure may be too high because:

New Zealand movements are highly sensitive to economic conditions in Australia (e.g. during the 1990-91 recession, net permanent movements from New Zealand fell to below zero). Given that presently we are near the peak of the economic cycle, it would be reasonable to assume that the New Zealand component of net permanent movements could be reduced from its current level of around 10,000 to, say, around 5,000 per annum; and
Australia and New Zealand are currently re-negotiating our relative social security arrangements. The two year wait for social security benefits for new migrants will apply to New Zealand entrants from 1 September 1998. Once this revised policy is in place, we are likely to see a further reduction in the level of net permanent and net long-term movements from New Zealand (see possible estimates of this impact prepared by Birrell and Rapson in this edition of People and Place).

Net long-term movements
In its 1995 projections, the ABS assumed that net long-term movements would be in the range between 8,000 and 14,000. This range is clearly too low given that the revised ABS estimate for net long-term movements for 1997-98 is 30,000. However, it would be dangerous to assume that the 1997-98 level of net long-term movements reflects an on-going average. The level of net long-term movements is highly sensitive to economic conditions. Following the 1990-91 recession, the level of net long-term movements fell to 4,200 while during the 1987-88 boom it reached as high as 20,200. Adjusting for the effects of the economic cycle, a more plausible net long-term movement figure may be around 15,000 to 20,000 per annum.
Category jumping
In its 1995 projections, the ABS assumed that category jumping would average around 3,000 per annum. However, over the past 15 years, category jumping has averaged less than zero. It has been less than zero for every year so far during the 1990s noting that the ABS has recently revised its 1995-96 estimate of category jumping from a positive 4,500 to a negative 5,500. Against this background, a more plausible assumption for category jumping would be zero rather than 3,000.
CONCLUSION
Combining the above suggested assumptions for the three elements of net overseas migration gives an overall figure of between 55,000 and 70,000 per annum. Combining this with the suggested assumptions for fertility and mortality gives a range of long-term population projections peaking at both above and below 23 million (see Figure 1 for projected population growth and Figure 2 for projected population).
However, it should be noted that:
the mid-points of the range of fertility and net overseas migration assumptions suggested gives an outcome reasonably close to 23 million; and
even if the high end of the range of assumptions is used, Australia’s population would be above 23 million by only a small degree and most probably for only a relatively short number of years given our below replacement fertility levels.

Figure 1: Annual population growth population scenarios, 1995-96 to 2051

Scenario 1: Based on a net migration assumption of 70,000 constant until 2051 and fertility rate to decline from 1.8 in 1996 to 1.6 in 2006 and then remain unchanged.
Scenario 2: Based on a net migration assumption of 65,000 constant until 2051 and fertility rate to decline from 1.8 in 1996 by 0.01 percentage points per annum for 30 years and then stabilise at 1.5 for 2026 to 2051.
Scenario 3: Based on a net migration assumption of 60,000 constant until 2051 and fertility rate to decline from 1.8 in 1996 to 1.65 in 2006 and then remain constant until 2051.

For all scenarios, 1994-96 mortality rates decline to the year 2006 according to short-term rates of decline and from 2006-51 according to long-term rates of decline. Current State mortality differentials maintained throughout the projection period.

Figure 2: Projected population 1995-96 to 2051

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