Explaining the complexities of population growth and economic growth in Tasmania
Calls for rapid population growth in Tasmania predominantly from migration fail to understand the complexities of population change and how growth occurs, writes Lisa Denny.
While Tasmania is currently experiencing its highest rate of population growth since the Global Financial Crisis, expectations that this rate can be maintained or increased are ill-informed and unrealistic (particularly without policy intervention).
An edited version of this opinion piece by Institute for the Study of Social Change research fellow Lisa Denny was published in the Mercury on January 24 2018.
Population change occurs as a result of natural increase (more births than deaths) and migration (in Tasmania’s case both interstate and overseas migration). Historically, around 60 per cent of Tasmania’s population growth has occurred from natural increase. However, as the population continues to age and the number and proportion of women of reproductive age continues to decline, natural increase will also wane as the gap between births and deaths reduces.
Migration will need to increase considerably to replace the projected slowing down of natural increase to achieve both the short term population targets desired by the Property Council and the longer term objectives of the Liberal Government. Migration will need to be further targeted to those of reproductive age if the population growth rates suggested are to be even remotely achievable. Even then, families will then need to have at least 2.1 children to ensure population replacement is possible.
Before embarking on such ambitions, a vision for what Tasmania encapsulates and a plan for how that is to be achieved should be established. While economic growth is considered the solution to addressing many of the challenges currently facing Tasmania — providing for an ageing population, reducing hospital waiting lists, replacing infrastructure etc — there are alternatives to rapid population growth, which also offer improved social outcomes without putting additional pressure on such things as housing and traffic.
These alternatives predominantly focus on increasing economic growth through improving productivity through better employment and job creation strategies. As identified by Saul Eslake in his 2017 Tasmania Report, the relative productivity performance of many of Tasmania’s industry sectors is considerably lower than the national average. Improving this relative productivity through better utilisation of resources (including human capital) and increasing Tasmania’s competitive strengths in key sectors will contribute considerably to economic growth. The role of education and training is critical in improving productivity. However, its provision needs to be matched to demand.
While there is evidence of skill shortages in some sectors in Tasmania, a by-product of a strengthening economy, there is also a large proportion of underutilised skill and labour in the population. Improving workforce engagement through both increasing labour force participation and also reducing underemployment, including reducing precarious work, will have a considerable impact at an individual or family (household) level. Security of employment and income will enable increased confidence and consumption, which will have multiplier effects in the economy and social well-being.
Skill shortages have considerable consequences for an economy which can be long lasting unless addressed. At the forefront of these concerns is the inability of organisations to meet demand for goods and services, but also in the inability to invest time to train future workforces. Migration can play a critical role in addressing skill shortages in the short term and provide the opportunity for Tasmanians to increase their participation in meaningful work. Even so, there are numerous other factors contributing to skill shortages, which will also need to be addressed to ensure improved productivity and economic growth is achieved. These include the cyclical and seasonal nature of some industries, ageing workforces, locational mismatch between the supply and demand for labour (regionality), time lag in delivering education and training, changing skill needs within occupations, the level of remuneration, organisational culture, employment conditions and industry image, to name a few.
Targeted population growth is important for Tasmania in meeting the challenges of an ageing population and a growing economy. However, population growth needs to be planned for. Growth for growth’s sake as a proxy for economic growth is not always effective and may compromise the very essence of what Tasmania encapsulates, particularly at the rates suggested.
Read the article as it appeared in the Mercury.
Lisa Denny is a demographer and research fellow with the Institute for the Study of Social Change. Her recent publications include two Insight Reports on Tasmania’s workforce and how it has changed since 2016, including policy implications for governments, employers, employees and educators.