Thursday, 7 August 2008

The real 2020 issue: on babies and immigration

I haven't quite finished reading the Productivity Commission's new study on Australian Fertility Trends yet, and I'll probably write more when I have, but I'm sufficiently outraged by its political correctness and ideologically driven twisting of the evidence that I thought I'd start setting down a few thoughts.

We don't need babies...just migrants

First let me tell you why I am outraged. The basic conclusion of the Productivity Commission report is that there is no fertility crisis. That's allegedly because although fertility rates are still below 'replacement rate' (at 1.9 children per woman), "Australia’s population should continue to grow at one of the highest rates in the developed world because of migrant inflows."

I should say I'm not suggesting we close our borders - some level of immigration is clearly desirable. But we are not talking about just some.

An article in the Sydney Morning Herald yesterday pointed out that this year's immigration programme is the biggest since since the end of World War II, and the biggest intake, in absolute numbers in Australia's history. The target for the programme in 2008-09 is 190,300 places, a 20 per cent increase over last year. The articles notes that one can add to that another 50,000 or so to account for New Zealanders and others not counted under the program, so that under the life of this term of the Rudd Government we could easily see an increase in the population of migrants by 1 million. That's a pretty major impact for a nation of 21 million people.

There has been pretty much no publicity or debate over this - despite all the evidence that Australia is not coping well with its existing migrant population, and the graphic warnings about the potential for social unrest when new groups are not well integrated into the population presented by countries like France and the UK.

Not to mention the minor fact that migration does not actually solve the problem of an ageing population.

Our ageing population - and the failure to tackle the issue

One of the positive achievements of the Howard Government was to draw attention to the looming problem of our ageing population: the essential point being if we don't start having children, we won't be able to maintain government spending on things like pensions (which in Australia remain largely non-contributory and unfunded not withstanding superannuation) and education at the level we've become accustomed to.

But I have to agree with Paul Keating's assessment, that as in so many other areas, Howard and Costello were essentially 'policy bums' who did little to actually tackle the problem. Take the baby bonus for example. It could have been designed to encourage people to have larger families, for example by giving more money to those who have three or more children. Instead, even families having the one child they would have had anyway get it. Buys more votes I guess...

On the other hand, adopting the wrong policy solution, as the Rudd Government seems intent on doing is probably worse than no action at all!

Why immigration doesn't solve anything

The first and most obvious point to make is that immigration does not actually solve the problem of an ageing population - unless you keep on letting in high numbers of immigrants forever! In fact family reunion policies mean that immigration typically has had only a very small impact on the overall age structure of Australia's population.

What it does do though, as Cardinal Pell recently pointed out, is fundamentally change our culture, moving us ever further away from being a predominantly Christian nation.

And it makes existing social and infrastructure problems worse - it reduces the need, for example, for serious investment in education and training by employers and government (why invest in trainees and apprentices if one can import them ready trained from countries like India), reinforcing cycles of poverty within Australia, a cycle we've been locked into for many years now.

And unless some serious attempt is made to integrate the new groups (something Australia has generally failed to do under the guise of 'multiculturalism') it leads to the escalation of the ugly social tensions we've seen in recent times.

Then there is the little problem of lack of water and other basic infrastructure that will particularly impact on Sydney (already straining at the seams) and Adelaide.

The baby bonus

So what we should be doing, is looking at policies to increase our own fertility rates.

Now the Productivity Commission doesn't like this solution, because it means that women will drop out of the workforce, at least for a time, thus potentially depressing economic growth. Ah, consumerism and greed, the false gods of our society...

But in reality, even if it does cause a short term dip in growth (which is debatable) so will infrastructure constraints - and having children ourselves rather than just importing them will take longer, giving us more time to do something about infrastructure. And while it might cost more, I would argue the broader benefits for the nation are much greater.

Far from being complacent about having increased fertility rates to 1.9 children per woman as this report suggests we should be, we need to get back to something more like the 3.56 children per woman that prevailed in 1961. It is, in my view, perfectly achievable.

The Productivity Commission study uses some pretty shonky economics in my view (and I'm an economist by training) to try and claim that that financial incentives have had only a very small impact on the current baby boom (the number of babies born in 2007 was the highest on record). The better conclusion is that policies so far seem to have had a surprisingly strong effect given that they haven't really been designed to attempt to increase fertility rates at all.

The study also buries deep in the report some references to attitudinal and other social factors we know really do matter if you want to turn things around - things like:

  • the fact that marriage rates continue to fall, and divorce rates remain high, increasing the 'risk' of having children;

  • the negative attitudes of many men in particular to commitment and having children, which frequently lie behind co-habitation and abortion decisions;

  • the failure of many young women to realise that delaying having children risks running into a personal infertility barrier.
Unfortunately, all the signs are that the Rudd Government, unduly influenced by the (completely spurious) idea that more babies equals more global warming, seems unlikely to do anything useful to tackle population ageing. Converting the baby bonus into a maternity leave payment, currently being promoted by the ACTU, for example, potentially helps those planning only one or two children - but those with larger families are far less likely to want or be able to manage both parents working.

So if we were serious about preserving our culture and tackling fertility rates we could:

  • provide special financial help targeted at those contemplating an abortion, and counselling and other assistance to enable the child to be adopted out to some of the many people who desperately do want children but are unable to do so;

  • provide positive financial incentives for marriage (rather than putting co-habitation on the same footing, as the government currently seems intent on doing), for example through the tax system;

  • make divorce harder;

  • make sure carbon compensation payments are skewed so as to favour larger families;

  • use the opportunity presented by the tax and family payments review just announced to redesign the baby bonus and family payment systems to encourage larger families.

I'm sure with a bit of thought we could all come up with quite a few more (do add your suggestions!).

I'd like to think catholic social policy organisations are thinking and working on all of these kind of policy options. But I suspect that like St Vinnies, they are more preoccupied with (dangerous) sideshows like making housing a 'human right'. But this is the big debate that Catholics need to play on. So start writing your submissions....


Cardinal Pole said...

A lot of good points there Terra.

A few weeks ago, Mr. Michael Duffy had a column in the Sydney Morning Herod pointing out that, if we are serious about dealing with the effects of 'global warming', such as water shortages, then we ought to be restricting immigration. But to do so is to open oneself to allegations of 'racism'.

(And of course, the "idea that more babies equals more global warming" is just the latest version of Malthusianism. There was no evidence for it two hundred years ago, and there's none now. But every two or three generations it pops up again.)

But I doubt that there's much that the government can do to boost natural replacement, since most people seem content to attain the 'perfect number' (whether two or three) of children and then desex one of the spouses, while bigger families are ridiculed. A cultural change is what is needed.

Peter said...

The Productivity Commision is a sacred policy cow that cannot be gainsaid.

The direction of 'human rights' will also probably mitigate against families - it wouldn't surprise me if the policy wonks decided that more than 2 children per family was child abuse.

Louise said...

Pole is right about cultural change, but there are laws etc which would help facilitate that.

Overturning the No-fault divorce laws would be a good start.

Will comment more later if I get the time.