And the award for Straya’s worst ever immigration spruik goes to…

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By Leith van Onselen

Anybody with half a brain knows that you don’t treat diabetes by doubling your sugar intake, and you don’t treat alcoholism by doubling alcohol consumption. And yet somehow we are supposed to believe that doubling Australia’s already extreme immigration intake will magically “save our choking cities”. From News.com.au:

AUSTRALIA needs to throw open its borders and at least double the annual immigration intake in order to save our choking cities, a leading planning expert believes.

While we’re at it, developers must focus on significantly denser and more compact urban spaces instead of sprawling further and further out for the sake of backyards.

The only alternative is to watch our major capitals crumble and lose their first world status, Shane Geha, managing director of EG Urban Planning, warns.

“I understand there’s some strong rhetoric about cutting immigration and slowing population growth, but it’s just wrong,” Dr Geha said.

“Our future depends on immigration. Strong population growth and significantly higher density living is the solution to our problems and any contrary suggestion is just nonsense”…

“In my view, our cities aren’t too dense. In fact, they’re not nearly dense enough and we can increase it substantially with some great benefits attached”…

Australia’s population is now projected to reach 36 million by 2046, but Dr Geha said even that isn’t sufficient or happening quickly enough.

The solution is to “import” a significant number of people in that tax-producing age bracket who can flood Canberra’s coffers with cash…

“I think we need to double the migration intake — at least,” Dr Geha said.

“Japan is going through a 30-year recession because they have a rapidly shrinking tax base, an ageing population, people aren’t having children and they have zero immigration. They are in big trouble with no conceivable way out.”

Migrants will help to stimulate the economy — especially if industries experiencing critical skills shortages are prioritised — and provide the long-term tax income to pay for infrastructure…

Cities like Sydney and Melbourne should make targets to double their current populations as soon as practically and sustainably possible, Dr Geha said.

Of all the ‘Big Australia’ spruiks I’ve read, this one is the silliest. But hey, Shane Geha does represent EG – “a leading real estate investment fund manager” – so he is clearly talking his own book.

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Still, his flimsy arguments do require a quick dismissal.

First, Infrastructure Australia’s recent report showed that liveability in Sydney and Melbourne will unambiguously decline as their populations surge to 7.4 million and 7.3 million people respectively by 2046:

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Under the “Centralised High Density” scenario favoured by Shane Geha (and indeed all other scenarios), liveability in both cities will be crushed with worsening traffic congestion and reduced access to jobs, schools, hospitals and open space. Obviously, increasing these cities’ populations further will make liveability even worse.

Second, the notion that Australia should simply “import a significant number of people in that tax-producing age bracket who can flood Canberra’s coffers with cash” is ponzi-economics. It takes no account of the extra costs created (e.g. infrastructure, public services, liveability and environment) and ignores the fact that these migrants will also grow old, requiring an ever larger immigration intake.

Third, the claim that “Japan is going through a 30-year recession” with “no conceivable way out” is patently false and also ignores that many other nations with falling populations have actually enjoyed stronger per capita GDP growth than Australia.

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Fourth, the notion that doubling immigration will make it easier to build the required infrastructure is moronic. You don’t solve a problem by doing more of the thing that caused the problem. According to the Productivity Commission, over the next half century Australia’s infrastructure requirement is estimated to be 5-times the cumulative investment made over the last half century:

ScreenHunter_15679 Oct. 25 14.39

Doubling immigration will obviously make this infrastructure requirement much larger, thus adding to the problem.

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Let’s be brutally honest here. The empirical evidence unambiguously shows that Australia’s 15-year experiment with mass immigration has been a cataclysmic failure, as evidenced by worsening quality of life across all key metrics in our major cities, which are projected to continue.

For Shane Geha to then advocate doubling down in order to fix the problems caused by mass immigration is the height of delusion, and highlights just how low the ‘growth lobby’ will stoop in order to line its own pockets.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.