Less can be more, for people, pensions and government
Australia emerged from the global financial crisis as the second wealthiest large economy in the world. While nearly every other Western nation was struck hard by the crisis, Australia was insulated in large part by a historic resources boom in China. Thus, among countries of more than 10 million people, Australia now ranks only behind the United States in per capita wealth.
My source for this is the Central Intelligence Agency, not a dull organisation, even when it is gathering statistics. Every year the CIA compiles a table of the world's economies, measured by gross national product, per person, expressed in ''purchasing power parity'', which is designed to remove currency distortions.
By the CIA's ranking, a dozen countries had higher per capita wealth than Australia last year, but all of them, with the conspicuous exception of the US, were much smaller economies than Australia. Indeed, most of them have populations either smaller, or barely larger, than Sydney or Melbourne.
Size does matter but Australia is in the grip of a size mania, led by the Rudd government, pushed by the business lobby, and cheered on by numerous commentators. The argument for rapid population growth and high immigration is presented as if it is the only way of avoiding a slow and inevitable stagnation. This argument is propagated with a religious zeal, as if GNP growth, by its very nature, is the paragon of progress.
This is why the government is pursuing a highly aggressive immigration program, and a projection that Australia's population will reach 36 million by 2050.
Like all dogmas, this argument is not a truth, but merely an opinion proffered as a truth. Bigger does not mean better. It can often mean worse. ''One would have to be blind, deaf and dumb not to notice how urban congestion has already reduced the quality of life in Australian capital cities,'' says Bob Birrell, of Monash University, one of Australia's most prominent scholars on immigration and population studies.
Birrell makes the point rapid population growth incurs several trade-offs, beyond congestion and environmental stress. It also retards the growth of per capita wealth.
Here we can again refer to the current CIA rankings. Nine of the 10 wealthiest nations on the CIA wealth index have fewer than 8 million people. By way of one example among many, Germany, the paradigm of a large, advanced, wealthy economy, with 82 million people, has a markedly lower per capita GNP than adjoining Austria (8 million) and Switzerland (7.5 million).
It is not necessary to resort to sustained high immigration to provide the bulk of the drive for economic growth and ease the demands on the federal budget caused by a greying population. There are other tools we appear afraid to utilise.
Just over a century ago, in 1909, when Australia was still a very young nation and Canberra had not even been envisaged, the federal government introduced the age pension. The qualification age was set at 65 for men and 60 for women. It was not generous. Average life expectancy at the time was 55 for men and 56 for women. Statistically, you should have been dead by the time you qualified for a pension, and long dead if you were a man.
Even those who did make it to 65 could not qualify for the pension if they had lived in Australia for less than 25 years. Or were Aborigines. Or Asian. Or a New Zealander. Or a Pacific Islander. Anyone who owned a property worth more than £310 was disqualified. So was anyone deemed not of ''good character''.
Unsurprisingly, the age pension did not impose a significant burden on the national treasury. The Australians who created this country did not expect a retirement subsidised by the government. A culture of entitlement barely existed.
A hundred years later, average life expectancy for Australians is 78 for men and 83.5 for women. Yet the bedrock qualification age of 65 for the pension did not change for 100 years, and for women it will not even take effect until 2013.
Increasing the entitlement age to 70 would be an obvious response to the significant cultural change over the past century. Why should coming generations be expected to carry a burden far heavier than all previous generations? Failure to raise the pension age is a breach of generational faith.
In 1909, the population of Australia was 4.2 million. Today, there are well over 4 million Australians who directly rely on various welfare payments from the state. The size of government has increased exponentially over the past century, along with the expectations of what government should provide.
One unsettling response to this growth has been the public sector reaching a scale of political self-perpetuation. Hence the dominance of the ALP, the party of the public sector unions. The arrival of the Rudd government accelerated this trend. Driven by a Prime Minister with enormous energy, ambition and an obsession with process, numerous departments were pushed into becoming service providers, which they were not set up to do. The result has been a series of debacles embroiling departments, across the policy spectrum, from the roof insulation scandal, to the profligate school-building program, to the navy being turned into an escort service.
What these debacles should be telling us is that we have reached the point in the history of government when we need to realise that bigger is not better, and less can be more.