Australia’s population growth (to September 2017) is growing at 1.67% per year, which is considerably higher than the rate in the early noughties (1.2%). The growth rate may be about to slow.
Births have increased from just under 250,000 per year in the early noughties to a peak of 311,000 in 2016. The number of births has declined only slightly since then but are unlikely to increase in the short-term. Fertility rates peak at the age groups 25 to 29 and 30 to 34. The fertility rates in these age groups have declined to a record low since 2008. This may be due to a decline in housing affordability. Furthermore, the growth rate of the population aged 25 to 34 is slowing due to a plunge in the number of births in the 1990’s – following the last recession in Australia.
Meanwhile, the number of deaths has been increasing steadily and reached 159,000 in 2016, up from 129,000 in 2001.
The result of these changing numbers of births and deaths means that natural population increase (births minus deaths) peaked in 160,300 in 2013 and has been declining since. This is expected to continue. Currently, natural population increase is adding 0.6% to the population each year.
Net migration is currently rising, reaching an expected 258,000 in 2017. There is a cyclical component to net migration, which hit a record high of 316,000 in 2008.
Permanent migration is declining slightly at present due to more stringent vetting.
Temporary resident visas represent the major component of net migration and this is the cyclical component, averaging over 100,000 per year and peaking at 200,000 in 2008. Many of these visas are for students.
The next downturn in the number of temporary visas may coincide with lower permanent migration and slowing natural increase. If this happens, Australia’s population growth rate could decline to around 1.4% or even less.
It seems likely that Malcolm Turnbull will call an early election for August 2018. While losing 30 Newspolls in a row, the gap is not large and could easily be closed. In fact, the recent Fairfax IPSOS Poll has the two party preferred vote close to even – depending on how preferences are allocated.
The Turnbull government has made it clear that there will be personal tax cuts in the May 2018 budget. This will make some voters more happy and will tend to boost the economy. Employment growth has been very strong, but seems to be weakening (growth has been temporarily boosted by the National Disability Insurance Scheme rollout). A tax cut fillip may just extend the good employment news for another few months. Good old Keynesian fiscal stimulus
Today Malcolm Turnbull announced $5 billion to build the airport to city rail link we have been waiting for these last 50 years. The funding has to be matched by the Victorian State government who face the polls in November 2018. How can they refuse?
Today there are reports that Malcolm has asked the party machine to have all pre-selections finalised soon.
The timing of the federal election is constrained by the timing of state elections in Victoria (November 2018) and New South Wales (March 2019) and by the need to have a half Senate election within the next 12 months.
Prime Ministers tend to call elections when they expect the economic news to be best and that will probably be in August 2018.
On the subject of political opinion polls, they are becoming less accurate. See my article in my book Forecasting: the essential skills.
This sequence of optimistic economic forecasts was discussed in the New Scientist magazine in 1992 (“Why the chancellor is always wrong”, 31 October 1992).
All these years later, these sequences of economic forecasting errors are still happening. It is a case of the tail trying to wag the dog!
More examples in “Forecasting: the essential skills” a book aimed at improving forecasting accuracy.