Why Treasury migration forecasts matter, and why they’re unconscionably high

Over this past decade, population growth has underpinned more than half of our real GDP growth. The 2018-19 budget prescribed 1.6 per cent population growth for 3 per cent GDP growth. Budget 2019-20 downgraded the 3 per cent, to 2.25 per cent. It seeks 1.7 per cent population growth. This is for 2.75 per cent GDP growth. Which looks unlikely.

Perennially, Treasury is forecasting resurgent GDP growth. It's not happening. More reliably, population growth powers whatever GDP growth we do get. That's why Treasury migration and population estimates are so high. 'GDP growth' will have it no other way.

GDP growth is a tolerable measure to begin with, perhaps, in the advanced OECD nations with stable or slow growing populations. Such nations express little interest in imitating the continuing 'miracle' of our mass-migration economy. More appealing is the mystique of our migrant Points Test. Which doesn't really select for skills in demand. Or the mystique of our Strong Borders. Which shutter the sea-lanes, yes, but not the air-lanes.

Measures like real GDP per capita, real wages per capita, and real wealth per household, begin to paint a more realistic picture of the Australian economy as it is experienced by ordinary people. The rich are getting richer as home ownership craters.

While the Budget cashes in its pro forma GDP gains, the Australian states carry the real-world infrastructure and service burdens of steeply rising population. Budget 2019-20 promised a sweetener of '$100 billion' in infrastructure and 'congestion busting' over 10 years. Even if it were to be fully realised, still, it's not enough.

A dominating lobby demands extremely high migration

New Zealanders measure and discuss migration in terms of net migration. Thus we can gauge readily that Labour isn't meeting its clear 2017 commitment to cut migration.

By contrast, Australian politicians contest permanent and temporary migration, especially the relatively small humanitarian (or refugee) intake. Net migration is not on the agenda.

Again, the Budgets set the tone. Usually, Budget papers 1-3 avoid the population issue. Their spotlight is on jobs and growth, and the deficit or surplus. As discussed above, the so-called net migration and population 'parameters' tiptoe into their appendix.

Budget 2019-20 changed tack somewhat. Upfront, the Treasurer highlighted the Prime Minister's new population plan (the Plan) and its permanent migration 'cap' of 160,000. But, in postwar terms, even that is an extremely high number 1. While the number that really matters is net migration, topping 270,000 in Appendix A.

In Budget Reply, Labor could have reasoned, you won't ever cure congestion, with a mass-migration medicine. Quite the contrary. They were keen to up the dose.

With Greens support, they comprehensively outbid the Coalition on migration, promising virtually open-ended migrant-parent visas. Which could only have led to much higher net migration. As it transpired, voters weren't buying. Not even in the obvious metro (Labor) seats with higher concentrations of migrant voters.