You can’t love mass immigration then complain about traffic

By Leith van Onselen

In June last year, The Australian’s David Uren penned a spurious article in support of mass immigration and a ‘Big Australia’, claiming that it is central to Australia’s economic success and that “fertile, educated Asians are saving our economy”. At the time, I demolished Uren’s arguments, which were both illogical and failed the evidence test (read here).

David Uren returned in July with another cherry-picked treat, this time claiming that young migrants are a “boon” for the growing workforce, which I once again demolished (read here).

Yesterday, Uren penned a contradictory article complaining about the lack of infrastructure across Australia’s big cities, as well as the soaring cost of projects:

Melbourne’s population will hit five million this year and has grown by 1.3 million since 2010. That is the equivalent of adding a city the size of Adelaide. Yet there has been no major road project commissioned in the city since that year, when work began on the final stage of the Peninsula Link project. There has been widening of the Tullamarine Freeway and upgrades to the M80 ring road, but the politics of new major roads has proven too difficult.

Project phobia is far from a Victoria-specific problem. In last year’s Queensland election, Liberal National Party leader Tim Nicholls promised to scrap Brisbane’s Cross River Rail tunnel, a pet project for the Palaszczuk government, while in Western Australia Labor’s Mark McGowan won office vowing to scrap the Perth Freight-Link project. The central issue in the 2016 ACT election was the Liberals’ promise to stop Canberra’s light-rail project, after the contracts had been written. In 2015, Labor went to the polls in NSW vowing to eliminate elements of the WestConnex motorway project.

Everyone has their justifications: projects are not on Infrastructure Australia’s priority list; they disrupt voters in vulnerable inner-city electorates or jeopardise the habitats of frogs; the government has failed to present a full business case.

But, bit by bit, Australia’s reputation as a reliable business environment for major investment is being trashed as state oppositions reject the integrity of contracts signed by governments. And the problems these projects are trying solve become more intractable.

In Victoria, neither the East West Link nor the new West Gate Tunnel was assessed by Infrastructure Australia before governments made commitments…

So part of the problem is governments feeling the need to “do something” inside the electoral cycle, which does not leave time for long-term planning…

It is hard to know how to stop poorly conceived projects from being advanced when politicians are determined to ignore institutions designed to help.

It’s fair enough to question the processes surrounding infrastructure projects – MB has done it continually. But it is highly hypocritical of David Uren to strongly endorse crush-loading the major cities via mass immigration while at the same time whinging that not enough infrastructure is being built.

What David Uren conveniently fails to mention is that the cost of infrastructure projects in our biggest cities will continue to spiral as long as they grow by 90,000 to 100,000-plus people a year, primarily via mass immigration. Why? Because in already built-out places like Sydney and Melbourne, the cost of retrofitting new infrastructure to accommodate greater population densities is prohibitively expensive because of the need for land buy-backs, tunnelling, as well as disruptions to existing infrastructure. These are basic dis-economies of scale.

But don’t just take my word for it.

In November 2013, the Productivity Commission (PC) released its final report on An Ageing Australia: Preparing for the Future, which projected that Australia’s population would swell to 38 million people by 2060 (mostly via immigration) and warned that total private and public investment requirements over the 50 year period are estimated to be more than 5 times the cumulative investment made over the last half century:

The likely population growth will place pressure on Australian cities. All of Australia’s major cities are projected to grow substantially. Sydney and Melbourne may grow by around 3 million each over the next 50 years (figure 2). In response to the significant increase in the size of Australian cities, significant investment in transport and other infrastructure is likely to be required. This is true both within the cities themselves and for the links between regional and major cities. Policies will be needed to reduce congestion problems, and to ensure adequate infrastructure funding and investment efficiency…

Total private and public investment requirements over this 50 year period are estimated to be more than 5 times the cumulative investment made over the last half century, which reveals the importance of an efficient investment environment…

In its 2016 Migrant Intake into Australia report, the PC revised up its population estimate by 2 million to 40 million, with Sydney’s and Melbourne’s populations now projected to hit more than 8 million mid-century. The PC also stated that if immigration is maintained at the last decade’s average, then Australia’s population could hit 50 million mid-century. This obviously means that the infrastructure requirement would also be much higher than stated above, and the PC did not have much faith that Australia’s policy makers can deliver on such a requirement:

..governments have not demonstrated a high degree of competence in infrastructure planning and investment. Funding will inevitably be borne by the Australian community either through user-pays fees or general taxation…

And late last year, the PC’s Shifting the Dial: 5 year productivity review explicitly noted that infrastructure costs will inevitably balloon due to our cities’ rapidly growing populations:

Growing populations will place pressure on already strained transport systems… Yet available choices for new investments are constrained by the increasingly limited availability of unutilised land. Costs of new transport structures have risen accordingly, with new developments (for example WestConnex) requiring land reclamation, costly compensation arrangements, or otherwise more expensive alternatives (such as tunnels).

Clearly, the most obvious and least cost policy solution to mitigate our big city infrastructure woes is to significantly dial back Australia’s immigration program and forestall the need for costly new infrastructure projects in the first place.

You can’t love mass immigration and then whine about a lack of (and expensive) infrastructure, David Uren.

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Additional Resources:

MB submission to the Migration Program review