Suburban Rail Loop highlights true cost of immigration

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Former Labor federal MP Neil O’Keefe claims that Victoria cannot afford not to build the $200 billion Suburban Rail Loop (SRL), given the state’s population is projected to double:

“The Suburban Rail Loop, though already ballooning in cost, speaks to the real issue our state is facing: if we are settled on the plan to double Victoria’s population by 2050 while simultaneously ending urban sprawl in Melbourne (good luck with that), we need more infrastructure, and rail in particular, to do so”.

“Without that, it’s just more roads to nowhere, endless car parks and drivers spending hundreds of dollars on toll roads. Bottom line – the SRL has to be built”…

“Unless we adopt a different growth model, we remain stuck with having to increase our population – mainly by immigration – to avoid a fall in living standards”.

It is true that Victoria’s population is projected to balloon courtesy of permanently high levels of net overseas migration:

Victorian population projection

However, there is no evidence that the SRL is a satisfactory use of funds, given that it fails any objective cost-benefit analysis and will swallow the state’s infrastructure budget for decades, thereby starving growth areas of funding.

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Moreover, the $200 billion SRL and other mega-projects should be considered direct costs of mass immigration because they wouldn’t be required if net overseas migration was lowered to sensible, sustainable levels and the population was stabilised.

Melbourne population projections

O’Keefe’s claim that we need to maintain high immigration “to avoid a fall in living standards” is also nonsensical, given that we have experienced 20 years of extreme immigration and living standards have unambiguously deteriorated.

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Roads and public transport are choked, there are shortages of hospital beds, chronic ambulance ramping, and chronic housing shortages.

Victorian taxpayers have also been buried in debt despite the state government selling off everything that isn’t bolted down.

State government debt
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Extreme immigration-driven population growth is literally destroying living standards in Victoria.

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.