Population and other ties that bind us to Sydney

REGION'S ECONOMIC DRIVER: "We are a release valve for those escaping the pressures that international migration brings to Sydney".  Photo: James Alcock
REGION'S ECONOMIC DRIVER: "We are a release valve for those escaping the pressures that international migration brings to Sydney". Photo: James Alcock

Former prime minister Tony Abbott told the Sydney Institute recently that Australia’s rate of population growth was too high. He nominated the level of immigration as the primary cause. And he reckons a lot of our ills – depressed wages, inflated housing prices, choked roads, crowded schools – are caused by high immigration. His claims are nothing new. The longest-running public debate in Australian politics is over the size and mix of our population. 

Normally, matters to do with migration and population growth are a bit of a yawn in the Hunter. Yet, we should be paying more attention – because I think the Hunter’s economy is now tightly roped to population growth in Sydney, and this has serious implications for what our region is becoming. 

The 2016 census revealed an unusual pattern of population growth in our region. The Newcastle and Lake Macquarie local government areas grew steadily, together up 4.8 per cent since 2011. But away from the urban heartland, where the bulldozers roam free, the Hunter grew at a galloping 8.3 per cent. This was not far off the growth rate of Greater Sydney where population soared by 9.8 per cent between the two censuses.

The expectation is that high levels of population growth up and down the east coast will continue for a few decades. Infrastructure Australia predicts Greater Sydney will reach 7,340,000 people by 2046, an increase of 2,660,000 on 2016.

This is a big, big level of growth.

The census contains evidence that the Hunter’s economy is being transformed profoundly by our adjacency to our exploding neighbour. Loads of things are happening.  One is the continued disappearance of our 20th century materials economy. Agricultural employment in the region was flat between 2011 and 2016 after suffering major decline in the previous decade. Manufacturing continues to decline, employing about 9000 fewer workers across the two censuses. Employment is likewise flat or declining in the utilities, wholesaling and transport sectors. Mining employment was also flat – but that’s another (complex) story.

What is disappointing is our failure to embrace the high value-adding services sectors, where we sell services to those outside the region in return for handsome earnings. The exceptions are in higher education and tourism, but these sectors are too small to drive a regional economy.

Instead, the new driver of our economy is population surge. There were over 3000 more workers in the construction industry in 2016 compared with 2011, with 1200 more in education, and a whopping 6500 more in health care and social assistance. These increases come from population growth. An extra teacher is employed when 25 additional kids enrol at a school, an extra nurse is added when four or five more hospital beds are filled, and so on.

Our population growth is easily explained. The Hunter has more families with kids. Retired locals are living longer. And more retirees are migrating to the Hunter, chiefly from rural areas in western NSW, from the mid-north coast and from Western Sydney. And while we host very few new international migrants, we are a release valve for those escaping the pressures that international migration brings to Sydney. 

We are no longer an autonomous, productive, regional economy. Instead our economy is population driven, underpinned by Sydney’s growth. This means more housing subdivisions chewing into our once-productive farmlands and vineyards, and more apartments colonising the redundant commercial spaces of Newcastle. Prime tourism sites at Nelson Bay are the next to go, with stacked floors of retirees yelling “Can you keep it quiet down there?!”

Phillip O’Neill is professor of economic geography at Western Sydney University


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