Tuesday, March 29, 2011

Growth lobby can’t get its story together. Urban Task Force versus UDIA

Spooked by the fact that 70% of us think Australia has enough people already, and by a fall in the immigration figures to September 2010, two branches of Australia's well-funded growth lobby brought out media releases this week. They managed to contradict each other utterly. 
You can find both described on page 48 of Tuesday’s (March 30th) Financial Review. “Developers push for bigger cities”.

The “Urban Development Institute of Australia” tried to run Peter McDonald’s line of  selective fatalism, whereby it’s no use arguing with them because population growth is inevitable.
In its submission to the federal government’s Sustainable Population Strategy for Australia, the UDIA said population growth beyond 36 million was inevitable. [ Note: 36 million is the figure that Treasury projected for 2050 in its 2010 Inter-generational Report – a 60% increase on the present 22-23 million. This would require net migration of 180,000 a year, just under the latest figure from the Australian Bureau of Statistics.]
‘The arguments are not around the forecasts… the arguments are now around what this means for the future of Australia,’ said the UDIA.

The Fin. Review described UDIA as a “lobby group which represents those in the development industry”.  Predictably UDIA  went on to argue that government should somehow provide infrastructure for all these new people, despite Jane O’Sullivan having proved that this is financially impossible at recent growth rates [http://www.onlineopinion.com.au/view.asp?article=10137&page=0  ].  

UDIA then bizarrely claimed that “Sustainable population [sic!] would also require that new home buyers not pay for so much new infrastructure” – presumably because this would make them less able to pay developers’ prices for housing. [A recent study from Curtin University suggested that the infrastructure cost of connecting up each new house in Perth was now around $300,000!  -- a cost that UDIA would rather see the tax-payer required to cover most of.  It then suggested we need more skilled building workers (no doubt so it could keep wages low) and saluted the shibboleth that “urban policies should be integrated and support growth in regional centres”.

To further reduce to meaninglessness the concept of Sustainable Population, UDIA "argued that a sustainable population policy would include education [sic]  about the benefits of a larger population; identification of required infrastructure; and faster rezoning, approval and development" Truly, the voice of greed is rarely soft or subtle!

Unfortunately Aaron Gadiel of the absurdly-named “Urban Taskforce”, another lobby group which describes itself as "a non-profit organisation representing Australia's most prominent property developers and equity financiers",  had decided to take an opposite tack. So far from such huge population growth being inevitable, there was a terrible risk that government would “cap the populations” of our capital cities at once, causing a fall in property values. 

The one scenario was as childish as the other. Yes, government can largely determine our future population by setting immigration quotas and by not paying  baby bonuses. But it does not have the power to stop population growth on a dime. 

There is almost no chance that the Gillard government is considering a move to zero net migration (which means not no migration, but the same number of people coming in as going out). 

Even if it did, our natural increase (the surplus of births over deaths) is currently well over 100,000 a year; so such a sudden stop  is simply not on the cards.  

For further absurdity, Gadiel claims to have got his figures about the dire effect of capping population  from an “independent economic authority” which turns out to be Brian Haratsis’s Macro-Plan. Haratsis, as his website will confirm, is an extreme proponent of high population growth, in which of course his company has an obvious interest.

In any case, as Jenny Goldie remarked in a letter to the Sydney Morning Herald:

Urban Taskforce Australia claims if there were a cap on population then Sydney house prices would fall 18 per cent (Cap on population in cities could slash the value of houses, SMH, March 29). With such a vested interest, they would say that, wouldn't they?

Your paper reported on 24 January this year that
'Sydney ranks as the second-most-unaffordable housing market in the English-speaking world, stoking fears runaway price increases have made Australia a less equitable country' (The second last straw in affordable housing). In the Demographia International Housing Affordability Survey of 325 English-speaking countries, Sydney ranked 324 and Melbourne 321. 

More recent reports reveal that such essential  workers as nurses and teachers can no longer afford to buy a house in these major cities.

Cap population and bring down house prices? What a good idea!

The on-line response to Gadiel’s nonsense was typified by this posting:
Shelter would be less expensive? Young families could afford a place to live? People wouldn't have to be slaves to banks for as long? We must stop this immediately! Can't the government borrow money in our kid's names to make shelter more expensive like it did in 2008?

Well done, Fin. Review for correctly identifying these two voices as lobbyists and in effect, hired mouths. Brickbats to some other media that were conned into reporting them as if they were expert opinion.

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