Australia | Sep 15 2008
By Chris Shaw
Australia may be witnessing an infrastructure boom at present but there remains the possibility it will fall short of future requirements, particularly given revised population forecasts from the Australian Bureau of Statistics (ABS) released last week.
As Commonwealth Bank economist James McIntyre notes, the Bureau has significantly revised up its forecasts for the Australian population in coming years, which should present a number of new challenges to planners as they attempts to deal with the higher numbers.
The new ABS figures suggest the Australian population may reach 34.2 million by 2051, an increase of 21% from the group’s previous forecast made in 2006. Looking further ahead, the group next expects the population in 2101 to reach 44.7 million, which is 46% higher than its estimate of two years ago.
The new forecasts factor in minor changes to expected fertility and immigration rates that bring these measures more into line with recent trends, while assuming no changes to average life expectancy estimates. Given the new numbers, McIntyre sees potential for policymakers to have to amend future plans in infrastructure and elsewhere to deal with the higher than previously expected number of people.
It should also impact on economic output, as McIntyre notes economic output can be divided into three elements – population, productivity and participation. If the productivity and participation components are held constant, the increase in population suggested by the ABS means the Australian economy could be 20% larger by 2047 than had previously been forecast.
Obvious beneficiaries of this would appear to be businesses such as retailers and building companies simply because there would be more people than before and this means more customers, as well as more options with respect to staff. As well McIntyre notes the new assumptions also suggest a younger population, as in 2006 the median age in 2031 was forecast at 42.8 years but it now may be only 40.3 years.
The government would be another beneficiary of the increase, as a larger population means more tax revenues, but as McIntyre points out, it also means a larger investment in infrastructure such as trains, roads, schools and hospitals as well. This is where issues may emerge, as the latest population estimates suggest numbers well in excess of what is forecast in the infrastructure plans of government at present, meaning what is being done may prove to not be enough to meet requirements.
In terms of particular cities, McIntyre notes the new forecasts suggest Sydney’s population will expand by a further 400,00 above the 1.1 million additional residents previously expected, putting its 2031 population at 5.7 million against the 5.3 million estimate of 2006.
It is a similar story in Melbourne, where a further 760,000 people are being added to previous estimates, an outcome McIntyre suggests would put additional strain on growth corridors and activity centres already identified. Queensland’s population could now top 6.6 million by 2032 and this would be 10% above previous government forecasts, so while more than $100 billion in infrastructure projects are currently underway in the state there are now question marks as to whether this will prove to be enough to meet an enlarged population.
The ABS report suggests 10 million Australians will be living outside capital cities by 2031, which would be an increase of more than 30% from current levels. While much of the increase would be in Queensland’s regional centres, the data forecasts 65% of Australians will still live in the eight capital cities in 2031.