ABS POPULATION CELEBRATION

“CELEBRATING 20 000 000: THE FUTURE THAT LIES BEFORE

US”

ABS HOUSE, CANBERRA
10.00 AM

THURSDAY, 4 DECEMBER 2003

Dennis, distinguished guests, Professor Graeme Hugo, members of the ABS. First

of all, can I wish each and every one of you a very happy Christmas, and thank

you for your wonderful work during the year.

I know that Christmas is a special time for the ABS, you all remember that

Jesus was born in Bethlehem because a census was going on in the Roman Empire

at that time, which proves that your business has been around for at least

2,000 years.

Australia celebrates a wonderful day, today. When the First Fleet landed

in Botany Bay in 1788, there were around 1,000 people on board. Australia’s

population at that time, the Aboriginal population, has been estimated by

some at 300,000, by others up to a million. The number is not certain.

But today, through natural increase and through immigration, Australia is

now 20 million people.

It has been an extraordinary story, the story of how a country with mixed

beginnings, founded by an empire with convicts, transformed itself into one

of the greatest multicultural nations on earth, how our country was settled

as a result of globalisation, and how our country today still benefits from

the internationalisation of our people, our economy and our culture.

It took us a little over 100 years to achieve nationhood, in 1901, with four

million people. And since that nationhood, a little over 100 years ago, our

nation has again been transformed. We are wealthier, we have unparalleled

access to information, we have a thirst for travel to examine our roots.

We may have our differences, we may have differences of religion or politics

or race. But we have a robust democracy, a sound judicial system, an unshakeable

belief in the philosophy of a fair go and a determination to resolve our differences

peacefully.

How have we changed as a nation? Well, our average weekly earnings have increased

fourfold over the last 100 years. The price of bread increased twofold, the

price of eggs halved, the price of milk is about the same, the price of going

to the football increased about four times, but unlike 1901, you may now go

in a covered stand, perhaps an Olympic stand with comfortable seating and

you may be able to see the action.

Our purchasing power has increased by a very substantial amount. We have

greater access to education. Our living arrangements have changed, although

the number of people in a household has fallen from 4.5 to 2.6, our houses

have got bigger and better.

More Australians are living near to the coastline, we are more diverse and

we speak more languages, and although we have a similar proportion of people

born overseas, a hundred years ago, that was mostly people born in England

and Ireland, today the proportion of those born in Asia is much higher.

We have remained a peace loving democracy. We have never experienced a civil

war, and our immigration continues to be important for our future, just as

it was for our past.

But reaching this milestone asks the next question. Where does our population

go from here?

A few months ago the ABS produced its latest set of predictions. They had

a high growth projection of 30 million by 2045. The medium growth prediction,

of 26 or 27 million in 40 years time. But the nature of that population will

be very different to what it is today. The median age could be 46 rather than

36. The percentage of the population below 15 would only be 15 per cent compared

to 20 per cent. The proportion of those over 65 would be 26 per cent, compared

with only 13 per cent now. And those aged over 85 would increase fivefold.

According to the ABS the population would stabilise in 2069, and then start

to slowly decline as the number of deaths exceeds the gains from births and

overseas migration. And whereas now there are more than 5 people of working

age to support every person 65 and over, in 40 years time there will only

be 2 people of working age to support those of 65 and over. And most of

those that are here are going to be 65 and over in 40 years, and you are going

to want a lot of people of working age to be supporting you.

These changes have enormous implications for our society, and that is why

we published the Intergenerational Report back in 2002. And let me

again touch on those issues, because it is going to determine our future prospects.

As our population ages, more than half of government expenditure, which is

directed to health and aged care and social security, will come under pressure.

Our Intergenerational Report says the demographic change will open

up a fiscal gap of 5 per cent of GDP in 40 years time.

If we had a fiscal gap of 5 per cent of GDP today, that would be a budget

deficit of $40 billion. And so we have to respond to that change either by

reining in expenditures, by increasing tax or somehow finding the economic

keys that can unlock stronger growth for the future.

We in the government have laid down the law of the three P’s that determine

economic prospects. The three P’s are population, participation, productivity.

How many people you have, their participation level in the workforce, and

the productivity of that participation.

Demography shapes destiny, and we would be foolish to ignore the threat of

declining fertility rates. In Japan and Italy, birth rates have declined to

the point where the living standards of Japanese and Italians will decline,

simply because they have fewer people to support an ageing population. Although

our position in Australia is not so serious, we should be aware of the possibility

that if our birth rate declines further and immigration fails to make up the

difference, we could face the same issues. Our population growth is not irreversible,

but it is in Australia’s interests, our economic interests and I believe

our security interests to continue to grow our population.

The second key is participation. We need to think in Australia about how

to encourage older people to stay in the workforce, not necessarily full-time,

longer. We have low rates of participation for older Australians, and particularly

for mature age males. And this is going to be a great test for government

policy, to encourage greater participation of an ageing workforce.

And the third is productivity. The number of people, their participation,

their productivity. Our Intergenerational Report assumes that productivity

grows at 1.7 per cent a year, the same as the past 30 years. If we can better

that, and we did in the late 1990’s, extra growth in income from our

population and its participation will start to meet the ageing of Australia’s

population.

But these are the challenges for the future. Let me today thank you the Australian

Bureau of Statistics for the important role that it performs for Governments

and the wider community, in “assisting, encouraging informed decision

making, research and discussion within Governments and the Community by providing

a high quality objective and responsive national statistical service.”

The achievement of the milestone of 20 million Australians, is a timely reminder

of the need to plan for demographic challenges that lie in front of us. We need

to ensure that we meet those challenges, with a prosperous economy, and a cohesive

society that does not leave the burden to future generations. We cannot expect

these problems will fix themselves, but let’s remember and mark this wonderful

milestone, one of the most successful, prosperous, multicultural nations on

earth, today, has 20 million people. Congratulations to all Australians.