Disclaimer that the views expressed here are not reflective of the views of my employer or any of the organisations i’m affiliated with. In fact they’d probably prefer it if i didn’t publish this! Much of what features here is exploratory thinking and should be viewed in that frame.
Also note that I started writing this quite a few months ago, and for a while, I cooled on it. But with an upcoming parliamentary review into the size of the intake, and the absolute dearth of any reasonable voices on this, I felt it was time to dust this off.
I’ve been leisurely making my way through AI 2041 written by Kai-Fu Lee and Chen Qiufan. For those of you not familiar with this book, it’s an optimistic portrayal of what AI in 2041 might look, like and where various technological advances might get us. Part of the reason why the book is optimistic (and therefore assumes large gains in tech over the next two decades) is that it assumes away a regulatory framework, or assumes a very responsive/ technologically lenient framework, one that is conducive to technological advancement. The book is a great read and mixes together a bit of science fiction with an analysis section that assesses where we’re at atm with each of these technologies (computer vision, NLP, autonomous vehicles, quantum computing, etc).
But the assumption of a lenient legal framework is obviously far-fetched; I hope. I say Hope because I see democracy is a necessary handbrake of the impact of big tech creeping into our space. Obviously, this doesn’t mean I agree with a theoretically slower pace of tech growth, but just that it probably is unsustainable without checks and balances.
At the same time, I recently finished Matt Yglesias’ One Billion Americans which is a very compelling book on why the US should get bigger (China), and what it needs to get there (a whole bunch of things that Australia' has already implemented like universal health care and a government paid parental leave scheme). Though there are areas of work that the US needs to work on (like Australia - higher density, more cities, childcare and other things that would make it less expensive for people to have children).
But it did get me thinking about what the responsibility of other countries is to the growing presence of China and the US, and tech behemoths, and with India not far behind. In particular, I’m going to focus on Australia, but I think this probably applies to countries like the UK and Canada as well.
I should note that the inspiration for some of what appears here came from a tweet from Ryan Briggs about how Australia and Canada have a responsibility to become bigger in response to the growing importance of the US in tech discussions [sorry i would ordinarily link to tweet, but it has since been deleted, I think].
Reasons for a bigger Australia
This is basically summarised in the list below but read on for a more detailed explanation and maybe a couple of bonus points at the end
Bigger economy
Australia’s economy is quite minuscule - about 1.3 trillion dollars in 2021, this compares against the US at 22 trillion, China 18 trillion and India at 3.5 trillion.
We’re a teensy proportion of the global economy.
Our options for increasing the size of economy include rapid increase to our productivity and/or we can increase our population.
Growth economist Dietrich Vollrath in his book Fully Grown talks about how flagging productivity in high-income countries is a feature (of moving into industries that are more service-oriented) not a bug. The demographic transition that advanced western economies have undergone over the last 50-60 years where more women have also entered the workforce has contributed to flagging productivity. We wouldn’t want to reverse that trend - the choice that we’ve given women to enter the labour force - for the sake of a few additional points to our productivity metrics.
The one thing that Vollrath admits could increase productivity (his reference point is the US) in the long run is immigration. Particularly skilled migration (which he sees as complementary to the existing workforce) - arguably this is precisely the type of migration that Australia currently has access to. Australia basically gets to set the limits and dictate what skills it requires from the people who enter the country and eventually become residents. What an enviable position to be in! It’s no wonder other countries like the US are trying to emulate our policies on this.
Australia has been quite successful at recruiting people who contribute both to the growing economy and who have brought diverse perspectives and cultures to this country. But we have decided to have a cap of about 190,000 permanent places a year. This is based on modelling and tax revenues that migrants bring, and other fiscal considerations for providing for an aging population (theoretically). But what if we increased it for a few years, what would be the effects? Especially given the last couple of years of zero to negative NOM (departures less arrivals).
The Jobs and Skills Summit has all but guaranteed that we will have a higher intake for at least the next year if not for the year beyond. As for NOM, it remains to be seen, but based on past estimates, China contributed quite substantially to our NOM figures (20-30 per cent in some years). It’s hard to envision our NOM getting back to the 235K mark without an increase in travel from China, and based on a few things (COVID restrictions and the like, airline logistics, etc) this is not likely to happen any time soon.
Bigger population - strategic advantages/ more power in economic negotiations
With a bigger population come certain strategic advantages. The growing pressure of having China so close, and the escalating trade tensions, including recent reductions to the number of international students arriving from China show that our relationship with our neighbour is strained at the moment.
While our global exports (for now) seem sound, China’s rapidly accelerating decarbonisation agenda will surely soon put a dampener on that. Increasingly our free trade agreements are starting to feature more mode 4 provisions (mobility visas) as part of the bargain. This is a great step for potential new Australians learning about our country and wanting to join.
With a bigger population, we are in a better negotiating situation when it comes to defence discussions. A larger Australia means a bigger partner in the pacific which would surely be enticing to some of our fellow travellers in the west.
Australia’s India economic strategy included a chapter on the growth of the diaspora and how crucial that can be for Australia developing link with the countries that migrants hail from.
But in order to do that, Australia needs to be more open about migration, and not just skilled migration. Let me illustrate with an example. My mum, an Indian citizen has to apply for a visit visa to come visit me, her daughter - an Australian citizen. By contrast, my brother who is a US citizen can come and go as he pleases.
Back when many of the family links to migrants were from Europe, it was perhaps a defensible position. But increasingly more of our migrants come from places that do not have visa waivers with Australia. A fairly simple fix to this would be, in the very first instance, to create a system whereby visit visas for people with direct relative is put into a separate queue with almost automatic approval.
Further, the US also allows US citizens to bring their parents to the us on a permanent basis and apply for a green card for them. In Australia you cannot do that without first applying for a $60k+ visa (and waiting six years) or waiting 13 years. ¯\_(ツ)_/¯ Not a great set of choices imho.
Well maybe parents can come here on a temporary basis?
Yes, well that system isn’t ideal either. For example, consider the temporary parent visa which you can have for three years, or five years at a cost of 5420 and 10840 respectively. At that cost, it makes more sense to bring parents in on a series of tourist visas (cost ~ $145 a pop for three years).
International students
My thoughts on this could probably fill a book, or a chapter in a book (publishers, get in touch; DMs open). In the first instance, International students to me seem like the perfect candidates for an expedited path to PR. I understand that there are some genuine concerns about International education being seen as a back door to immigration but you can’t deny that these graduates would make for excellent new Australians. They’re highly educated, they know a lot about our culture and if despite that they want to stay- that’s great, they’ve had more exposure to our labour markets, they already speak good english. In terms of policies, consider the following
Give them vouchers to see accredited migration agents - make universities pay for this - at 700 to 800 dollars a pop, it’s not a huge impost
Smarter people than i have recommended removing the genuine temporary entrant clause https://immi.homeaffairs.gov.au/visas/getting-a-visa/visa-listing/student-500/genuine-temporary-entrant
I personally like and appreciate the simplicity of a US think tank’s recommendation to “staple green cards to the diplomas of STEM graduates”
But what about sustainable population growth, GARBY?
So this is one I get a LOT. The truth of the matter is that individual emissions of one person do not compare in size to the emissions of our biggest emitters - mining companies. So a larger population ironically could mean that we, for a period of time, have lower per capita emissions. A relatively unchanging number in the numerator - total emissions (my argument is that our emissions wouldn’t increase that much with an extra 10,000 people a year, as individual emissions are minuscule by comparison) divided by the denominator (a growing number under my proposed scenario) will yield a smaller number (relative to the value in present time t). Further investments in public infrastructure (let’s choose to put this into public transport, and more sustainable forms of transport) should also follow increases migration.
“It will change the character of Australia”
(Big yikes! if someone says this to you in person, I recommend not engaging.)
Perhaps, yes. But what if it’s for the good? What if as a result of these changes, we have access to many more skilled people, what if we have innovations that wouldn’t have existed without people with know-how from other countries? What if the people we bring here instead of harming our way of life, are committed to improving it, or even to fighting to support those very institutions that make this country great.
What if immigrants bring to Australia exactly what they have over the last few decades? All the better for us, surely?
Also see here for interesting articles from Alex and team at CATO about how immigrants don’t actually harm the institutions of the countries they end up in.
I know personally I will fight to the death to defend the AEC (okay a bit dramatic, but you get the gist). It’s a remarkable institution and one that we should be very proud of.
I’m not asking for a “let them all in” approach. I’m saying that if we are a confident nation. One that’s confident in our institutions, in our ability to attract the best and the brightest, if we know that this can help us reach where we want to go - what is the appropriate number? Why can’t it be higher?
Fertility
I hesitate recommending policies regarding women’s fertility but I think we should make it cheaper and easier for couples and individuals to access fertility treatment. At the moment, this is only available on the highest level of cover in private insurance, and with significant waiting periods of up to two years (might not seem like a lot but it is when you're chasing down a fertility clock).
I’ve had a number of conversations with friends who have said their reluctance to have children (/many children) stems from their inability to offer them a decent life because of how expensive it is to have kids. First, housing is increasingly unaffordable. The supply of housing is nowhere near keeping up with the demand. We saw just how much room for speculation in the housing market there was during the pandemic, and this was without the influx of migration (a commonly touted reason for why housing in Australia is unaffordable).
Putting childcare into schooling is probably inevitable at this point, and we should get a move on it already as it will reduce many of the out-of- pocket costs that plague new families.
NARWP should be brought back down to 6 months. It was a travesty that it was ever increased to two year, never mind the four years it’s at now.
In conclusion…
At the end of the day, this is necessarily about vision. It’s sad that much of our discussion about Australia and how big it should be is not really talked about much since Rudd 07 (recent parliamentary inquiry announcement notwithstanding).
Notably, even the country’s most prominent think tank has shrunk away from discussion about how big Australia’s population should be, and have instead focused on composition. But what about our long term future? What about our strategic objectives? What about the vision for Australia.
I write this because I’d prefer to live in an Australia that wasn’t meek and afraid of its own shadow (as our response to the pandemic revealed). One that approaches people from other countries, not merely as a fiscal resource, but as citizens. Not one that sees our borders - which necessarily keep people out - as our biggest asset.