Australia's population futures

There are four components that go into the making of population projections: fertility, mortality, migration and the size and age structure of the base population. One of the central demographic lessons is that much of a population's future is contained in its present age structure, which, in turn, is primarily the result of its past fertility history. In broad terms, Australia's fertility was relatively low in the 1930s and 1940s, high in the 1950s and 1960s and very low in the 1980s and 1990s. This 70-year history of fertility is very much reflected in Australia&'s present age structure and is the central reason that we can be absolutely certain that Australia will experience substantial ageing of its population in the coming decades as the large number of births of the 1950s and 1960s replaces the small number born in the 1930s and 1940s at the older ages, while, at younger ages, there is no increase in the size of age cohorts. While it is often stated that post-war immigration has kept Australia's population young, it has been shown that in fact this immigration had no impact at all on the age distribution of the Australian population. Falling mortality rates, particularly in the past 25 years, however, have contributed to population ageing (to a lesser extent than past fertility) and variations in future mortality levels can have a significant impact on the extent of population ageing. The existing age structure is what gives population futures "aircraft carrier" nature, that is, once at full stream, it takes some time to change direction. This paper considers three components of population projections and then assesses the potential population futures for Australia. The purpose is not to predict future population but to provide the evidence of what would happen to Australia's population if certain scenarios were to prevail. This allows an assessment as to whether any of these scenarios are favoured on economic, social or environmental grounds and whether policy may be able to influence future demography in the direction of any favoured scenario. The paper argues that there are good reasons to regard the standard projection as the minimum to which Australia should aspire. Projections based on lower fertility or lower migration than the standard move Australia in the direction of the coffin-shaped age structure with future falls in population and imminent falls in the labour supply. The paper also argues that current average net overseas migration levels of around 80,000 per year have been comprised of approximately 50,000 permanent and 30,000 temporary movements. While this composition can continue for a while, it would mean that in 50 years time, we would have 600,000 temporary arrivals and 570,000 temporary departures. This is not a realistic scenario. If the projected population levels of the standard are to be achieved, this implies a significant increase in the share of permanent arrivals in the total of net overseas arrivals