The outlook for Australia's population

Charlie Nelson, Director Foreseechange, November 2009

Updates of this analysis (most recent is dated December 2011) can be purchased online at www.foreseechange.com.au or click here

Australia’s population growth rate has accelerated dramatically over the past few years and this is expected to continue in the short term at least (Chart 1).  This is being driven by large increases in both births and net migration (Chart 2).

Chart 1

Chart 2


Australia’s federal Treasury Department has increased their forecasts for Australia’s population to 35 million by 2049.  The current population is just over 22 million and is growing by well over 400,000 per year.

This rate may not continue for long.  The current boom in fertility could represent a change in childbearing preferences by age and the big increase in net migration could abate if Australia’s skill shortages become surpluses.

Prime Minister Kevin Rudd and at least one of his senior ministers, Linsday Tanner, have publicly supported a large population for Australia.  A continued rapid increase in population would certainly challenge Australia’s water supplies and already-stressed transport and housing infrastructure.

Such a large population would be popular with only a minority of voters, so supporting a large population could be “courageous”.  Over several years, most adults have disagreed that Australia would be a better place with a much larger population (Chart 3).

Chart 3

A recent Age/Nielsen poll asked voters about the 35 million population prospect.  Only 30% thought that population size was about right and 40% thought it was too many (26% had no opinion).  On immigration, there was an even split - 43% thought immigration was too high and 43% thought it was about right (9% thought it was too low).

Fertility Trends

In 2007, the long-standing record number of births (set in 1971) was eclipsed.  The record was set again in 2008.  Should current fertility trends continue, the number of births could increase by 33% to 400,000 by 2015 (Chart 4).  Total fertility could increase from just under 2.0 children per woman to 2.4 (Chart 5).

Chart 4

Chart 5

When fertility rates are examined by age group, they are increasing in all age groups.  This is very rare and last happened in 1946.  Fertility rates have been increasing for some time for women in their 30’s as childbearing was deferred relative to previous generations.  But in 2007, women in their 20’s and even teenagers lifted their fertility rates (Chart 6).

Chart 6

The recent increase in fertility amongst 20-somethings could either mark a deliberate transition towards earlier childbearing or it could be a fashion that they have caught from women in their 30’s and perhaps celebrity women.  Either way, this trend could mean that fertility rates for women in their 30’s will not continue to increase as the current 20-somethings pass the age of 30.

It may well be that completed fertility rates will remain at about 2 children per woman.  But just as fertility rates appeared to be less than 2 while Gen X were deferring childbearing until their 30’s, they may appear to be over 2 for only a short while as Gen Y brings forward childbearing and have less children in their 30’s.

There appears to be some slowing in fertility rates based on 2008 data relative to 2007 data.  The table below shoes our 2015 projections based on 2007 data and 2008 data.

 

 

15 to 19

20 to 24

25 to 29

30 to 34

35 to 39

40 to 44

45 to 49

Total fertility

2007 base

17.8

62.0

121.3

171.2

113.9

22.0

2.0

2.55

2008 base

24.3

64.3

112.3

151.8

100.9

26.1

1.1

2.40

The total fertility rate projection has been reduced and age-specific fertility rates for women aged between 25 and 39 have been reduced.  Age-specific fertility rates for women aged 15 to 24 and 40 to 44 have been increased.

The fertility rates by age for selected generations is shown in Chart 7.  The differences are quite large and there is evidence that Gen Y’s fertility could yet be different to that of Gen X.

What is clear, however, is that a return to fertility rates of 3 or above, as happened between 1946 and 1964, is out of the question.  More likely, completed fertility rates will hover around 2.0.  Completed fertility above 3 only occurred for women born in the early 1930’s  and fertility rates significantly above 2 only occurred for women born before about 1960.

Chart 7

 

Updates of this analysis (most recent is dated December 2011) can be purchased online at www.foreseechange.com.au or click here
 

Australian Bureau of Statistics information on Australia's population

 

Charlie Nelson, Director Foreseechange, November 2009

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