Negative Impact on Immigration

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NEGATIVE ECONOMIC IMPACTS OF IMMIGRATION AND
POPULATION GROWTH
By Tomas Nilsson, President of the Tasmanian Branch of Sustainable Population Australia

SUMMARY
Immigration and population growth cause:
1. A relative increase in the scarcity of resources and natural assets such as water, arable land, forests, mineral deposits and fish stocks;
2. Infrastructure such as roads, schools and hospitals, telecommunications networks, electricity and water supply systems and sewerage networks to become overburdened, and requires expensive new infrastructure to be built;

3. Wages of workers to fall;
4. Unemployment;
5. A shortage of affordable housing;
6. Environmental degradation.

DETAIL
1. Resource Scarcity
The standard definition of economics is “the allocation of scarce resources among competing ends”. Immigration and population growth of necessity makes that task more difficult because it creates more competing ends; thus by definition is a bad economic outcome. In other words, if there are more people living on the same amount of land, with the same amount of natural resources then there will be fewer resources and land available per person, and thus less wealth per person.

Another factor is that the per-unit cost of a natural resource-based good is likely to increase as more is produced. An example is electricity generation. Tasmania is currently experiencing a minor shortage in electricity and has been forced to install a gas-fired turbine in Bell Bay – at a substantial cost. The State Government is also building wind turbines in parts of the state, and has built an electricity cable across Bass Strait for several hundred millions of dollars. However half a century ago when Tasmania’s population was substantially lower than it is now these measures were not necessary, and very cheap power could be obtained from hydro-electric schemes. But now virtually all the available rivers in Tasmania have been dammed and more expensive forms of power need to be harnessed to serve the needs of the larger population.

Tom Nilsson

Page 1 of 6

21 Sep 05

Another example is water. There are currently debates about how both farmers across Australia can get the water they need. The possibility of damming rivers in northern Australia to divert them inland has been raised. Another possibility discussed is to pipe all irrigation water instead of letting it run in open channels. The point is that these options come at a much greater economic (and possibly environmental) cost than methods of obtaining water in the past. In other words, there is an increasing marginal cost – as the population increases the cost of ser vicing the needs of that population increase, at least where natural resources are required. A third example to look at is land for housing. Land in general becomes relatively scarcer as the population increases, and thus people find it harder to afford land for agricultural or domestic use. In relation to cities, the effect of population grow has at least two negative cost-related effects. Firstly, builders tend to build houses on relatively flat land, but as the flat land is used up builders (and property developers) need to build on increasingly more steep land. This is much more expensive. Secondly, as inner-city land is used up people have to build their house increasingly further away from the city centre. This involves a greater cost for people living further away to travel to and from their place of work (commonly in the city centre) each day.

2. Overburdened Infrastructure
State and federal governments often support population growth but ignore the costs of such growth. For example there is a nationwide shortage of public hospital beds, yet population growth adds to the demand on hospitals. Many of the nation’s roads cannot cope with the existing amount of traffic, let alone more. Many capital cities are experiencing water supply problems. Even if people supported population growth, the logical...
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