PAUL SHEEHAN SMH writer
August 23, 2010
A great sucking force can be felt around Australia, siphoning resources southwards, down the hungry throat of Melbourne. Australia makes, Melbourne takes.
”Melbourne is a parasite economy,” says Bob Birrell, the doyen of immigration and population studies in Australia. ”Increasingly, the fiscal dividend from Australia’s mineral boom is having to be distributed to Victoria to pay for the needs of Melbourne’s population boom. That’s why the Victorian Premier, John Brumby, is constantly having to go cap-in-hand to the federal government for assistance.”
Birrell is from Melbourne, which makes him a heretic in a city with a highly developed sense of civic pride. He is director of the centre for population and urban research at Monash University.
”While the other boom states have been driven by mining exports, Victoria’s boom has been driven by high immigration,” Birrell says. ”This created a buoyant economy, thanks to a rapidly-growing people servicing sector and migrant servicing sector.”
In other words, Melbourne is growing for the sake of growing, racing towards a population of 5 million, using other people’s money. Just how big is that great sucking force from the south? Enormous. In the 2008-09 financial year, Victoria imported $70.2 billion in goods and services. It produced only $34.5 billion in exports, less than half its imports, a deficit of $35.7 billion.
Western Australia, by contrast, had exports of $94 billion in 2008-09 and imports of $42.8 billion, a mammoth $51.2 billion surplus. The equivalent of 70 per cent of that surplus ended up in Victoria as deficit spending. No wonder West Australians are in a state of outrage.
”Melbourne now requires increased financial assistance … to pay for its city building to keep up with all this population growth,” Birrell says. ”Victoria’s biggest export industry, by far, is education. But the boom in the overseas student industry is not going to last for long because of the federal government’s crackdown on the vocational training industry.”
Vocational training had become a large-scale rort, a backdoor immigration program. ”We [Victoria] were growing by 40,000 people a year a few years ago, but by 90,000 a year during the Rudd government years because of its huge increase in the overseas migration program,” Birrell says. ”The education industry alone drove nearly half this population growth. Because Victoria has virtually no minerals industry, its situation is parlous.”
In 2008-09, Victoria generated $5.4 billion in exports via the education sector, by far its biggest export earner. NSW generated even more in education exports, $6.3 billion, but this is only half the state’s biggest export sector, coal, which generated $12.8 billion. Sydney is also a regional financial hub in Asia.
Having drawn a picture of Melbourne’s bloated needs, fairness demands the lens be widened to include Sydney. The wider picture is not pretty. The great sucking force is not just coming from Melbourne.
In 2008-09, NSW generated $64.9 billion in exports and $102.5 billion in imports, a deficit of $37.6 billion, slightly larger than Victoria’s deficit. However, its dependence on imports was far lower than Victoria’s, where imports were a mammoth 108 per cent higher than exports.
When you add NSW and Victoria, and then add the resource boom states, WA and Queensland, the comparison gets ugly. Combined, WA and Queensland produced an export-import surplus of $74.7 billion in 2008-09. Combined, NSW and Victoria were the opposite, with an export-import deficit of $73.3 billion.
So almost the entire export surplus of the two resource-boom states is essentially being transferred to Melbourne and Sydney and their regional economies.
The great irony is the mining boom underpinning Australia’s economic prosperity requires only modest increases in immigration. Here, too, Birrell is a willing heretic. In a new paper written with his colleague, Ernest Healy, they conclude: ”The Labor government’s high immigration policy has little to do with the skill needs of the resources industry.”
No wonder the public demanded that the major parties stop and think about the mad rush to ”a big Australia”. Immigration has a long positive record of providing economic growth for Australia, but traditionally the net intake oscillated at about 70,000 people a year. This gradually doubled under the Howard government, then rapidly doubled again after Kevin Rudd came to power.
Labor’s immigration net intake of 270,000 people last year drove a multiplicity of stresses which forced the ”big Australia” debate:
By far the greatest beneficiaries of high immigration are the immigrants, not the resident population.
High immigration lowers per capita productivity growth, a key to sustainable growth.
It retards the growth of per capita wealth.
It accelerates the rate of food importation. (Australia imported a record $8.5 billion worth of food in 2008-09.)
It accelerates the increase in urban overcrowding and traffic congestion.
It increases Australia’s greenhouse emissions, per capita.
It makes it unlikely Australia can meet its targets of greenhouse gas emission reduction.
It lowers Australia’s food security.
All of this poses the question, if Melbourne is going to become a city of 5 million people, but only by sucking resources from the rest of the country, what’s in it for the rest of the country?
Nothing. It should not be surprise then, that on Saturday night Victoria, the state so reliant on big government and big immigration, went hard for Labor and a Melbourne Prime Minister.
It wasn’t just parochialism, it was greed.