Peter Costello

Speeches

ABS Population Celebration

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.

4 Dec 2003

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