Issues Magazine

Environment and Economy: Can They Co-Exist in the “Smart State”?

By Simon Baltais

We live in times where many believe we must grow to build a strong and successful economy. Is a bigger economy better, and what do we stand to lose in south-east Queensland if we continue to grow?

South-east Queensland (SEQ) is one of Australia’s biological hotspots. The subtropical and temperate regions known as the McPherson/MacLeay overlap zone include diverse landscapes, from mountain rainforest to open woodland and wallum wetlands to huge sand islands, mangrove forests, seagrass meadows and coral reefs. It’s not surprising then that the region supports 151 terrestrial ecosystems (State of the Environment Queensland report, 2007) and a great diversity of species. SEQ supports the greatest number of birds in Australia and botanically is one of the richest regions. Its diversity is recognised worldwide.

You would think, given this uniqueness and the economic, social and environmental benefits this brings, that the region would be proudly protected. On the contrary, only 13.1% of the region’s bushland is protected in national parks or similar. Only 17% of SEQ is in public ownership and protected, significantly less than the amount of land now in public ownership in Sydney (42%) and Melbourne (33%). Since 1975, over 35,000 hectares has been added to Sydney’s public open space system, with an annual expenditure of $25 million, according to Darryl Low Choy and Tony Prineas (Parks for People: Meeting the Outdoor Recreation Demands of a Growing Regional Population, 2006).

The Queensland government would argue about these figures, stating that 80% of SEQ is protected from residential development, but when you cut through the rhetoric you soon realise it’s not protected from the impacts of urban growth. Infrastructure such as dams, roads, power lines, pipelines, agriculture and industry are rapidly destroying and fragmenting the little remaining bushland in SEQ.

Biodiversity in SEQ is under pressure from habitat loss primarily due to increased urbanisation driven by population growth, a fact stated in the State government’s South East Queensland State of the Region technical report (2008). By 2026, a further 70,000 ha of bushland and open space will be lost to urbanisation and there will be as much urban land as there is protected bushland estate (see The Maths of Urbanisation, p.22).

Protecting biodiversity isn’t about protecting the cute and the furry. It is central to providing humans with many economic, social and physical benefits. The importance of biodiversity to humans is now more clearly understood, and the science around ecosystem services highlights these benefits.

In simple terms, biodiversity is important for the provision of the air we breathe and drinkable fresh water. More specifically, biodiversity is responsible for the health of our forests and crops through pollination. There are literally hundreds of free services that biodiversity delivers, and yet State government planning allows it to be readily destroyed. It appears we are living like there is no tomorrow.

State planning is currently based upon a presumption that we must continue to grow. The consequence of this is a tragic decline in the diversity and number of species. No species highlights this better than Queensland’s faunal emblem, the koala.

The koala’s status in SEQ has declined from common to vulnerable. Although one of Australia’s largest urban koala populations, the SEQ Koala Coast koala population has declined by 51% in less than three years, with a 64% decline in the 10 years since the original 1996–1999 survey. The cause of this decline is urban development driven by our unsustainable population growth. Sadly the state government is not prepared to stop this growth, and government reports show many koala populations, including very significant populations such as of the Koala Coast and Pine Rivers, will be extinct within a few years.

The story is the same with SEQ birds. Something like 20 or 30 species are in serious decline, particularly those reliant upon lowland forests, which are subject to the impacts of rampant urbanisation.

This population growth is also impacting upon SEQ waterways. The SEQ Healthy Waterways Partnership data (www.healthywaterways.org) shows that urban areas produced more pollution and silt than the same area of farmland. No surprises, then, that since 2004 the annual Ecosystem Health Monitoring Program Report card for the Moreton Bay region, first published in 2000 by the Healthy Waterways Partnership, has shown Moreton Bay has gone from a B+ to a D. The situation is grim, with Healthy Waterways Partnership science estimating that by 2026 point source and diffuse pollution will increase by 49% and over 55%, respectively, due to population growth (South East Queensland Healthy Waterways Strategy 2007–2012).

Sadly, if we pursue population growth, what made SEQ unique and a healthy place to live will have been replaced by tar and cement. One has to ask if this is what SEQ residents really want.

In our era, economic decisions take precedence over environmental and social decisions. Therefore, battles fought to save SEQ’s biodiversity and lifestyle are and will need to be fought with economic arguments.

An economic debate is not necessarily bad news for the environment or community as we can use economic arguments to great effect. We have been led to believe that our ageing population represents a crisis, but there is strong economic evidence that proves this to be an urban myth and debunks the need to grow to replace allegedly defunct aged Australians.

It’s projected that by 2056 Australia’s old age dependency ratio will be about 38–42%. By comparison, the UK’s old age dependency ratio will be 39.2% by 2050. A 2003 British House of Lords report concluded that “population ageing does not pose a threat to the continued prosperity and growth of the United Kingdom economy; in this sense, therefore, there is no looming ‘crisis’ of population ageing in the United Kingdom”. Similarly to the UK, Australia’s population is heavily urbanised and concentrated along the coast and major centres, so there is no reason to think we have exceptional circumstances.

Even if we did use high growth to dilute the Australian ageing effect in the population, a huge population would be required. According to the Australian Bureau of Statistics (Australian Social Trends, March 2009, cat. 4102.0), a net addition of 400,000 migrants per year (almost twice the 2007–08 record level) would be required to reduce the old age dependency ratio from 38% to 31%, by 2056 increasing our population to 51 million. That’s an extra 15 million on current projections. To reduce the ratio to 24% would require an annual net immigration of one million people (almost five times the 2007–08 level). The result of this would be a population of 91 million people Australia in 2056.

Paul Johnson, an economist at the London School of Economics, stated that the “problem” of population ageing does not require the implementation of draconian or extraordinary measures. He points out that Australia is in a better position to deal with ageing of the population than almost any other OECD country. Johnson showed clearly that very high immigration levels are ineffective and inefficient in bringing about changes in the ageing of the population.

The inefficiency is clearly shown when you add 6.7 million people to merely change the aged proportion by less than half a percentage point, which equates in layman terms to using a sledgehammer to crack a walnut. It is simply not sensible to argue for large-scale immigration (above 80,000 net per annum) on the basis of its impact on ageing.

This is not to say that immigration will be stopped. Quite the contrary: immigration will always be important to Australia. It is all about determining what is a socially acceptable and ecologically sustainable immigration program.

A fast-growing population is not a prerequisite for a healthy economy; neither is it essential for a liveable community. The world’s three most liveable cities in 2009 – Zurich, Geneva and Vienna – are in countries with very low population growth rates (Switzerland 0.28% and Austria 0.05%). Both Switzerland and Austria are ranked higher in the GDP per capita world rankings than Australia.

Low population growth countries like Finland (0.10%), Sweden (0.16%), Denmark (0.28%) and The Netherlands (0.41%), which have high quality of life ratings, have lower growth rates than Australia and comparable or higher per capita GDP.

Another example is Norway (0.34%), which has a low population growth rate and has heavily invested its oil wealth back into the nation. It has created a $200–300 billion oil (ethical) pension fund, allegedly the fourth largest equity fund in the world (equivalent to over US$62,000 per capita), with savings equal to the Norwegian GDP. As of 2007 it became the largest capital reserve per capita of any nation.

When you have low growth you can invest in service improvements rather than expend valuable GDP on “catch-up” infrastructure to address the needs of growth. In 2005 Norway expended 7.2% of its GDP on education, ranking it one of the largest commitments by any country (20th). Australia expended 4.5% and ranked 85th.

Norway expends significantly more money on education per person than Australia. Wouldn’t it be a grand place in Queensland if the same had been/was done with our coal? Unfortunately we have frittered away our wealth on congested roads, pipelines and other infrastructure that provides the basics of life rather than infrastructure that improves life, such as in hospitals, education and communication.

When we chase growth we actually become poorer. Australia averaged a 0.64% GDP growth rate in 2007–2009. Australia’s population growth rate was 2.1% in 2009 – Queensland grew by 2.6%. This results in a –1.46% per capita GDP growth rate. Based on 2009’s healthy GDP figures (0.68%), the per capita GDP growth rate was still –1.42%. Ross Gittins, Australian political and economic journalist and author, reported in Business Day (March 2010) that real gross domestic product per person had fallen in three of the past five quarters and over the previous 15 months had contracted by 1.5%.

Developers are doing well out of our rapid growth – little wonder they are its biggest advocates. In the UK, a House of Lords (British Parliament) report showed that it was the capital owners (big business) who did well out of the push for more growth. In 2009, Australian property group Stockland made a $175 million dollar (net margin 21.1%) profit from residential development. This suggests that developers are hardly doing it tough like many first-time home owners are.

Consider prospective homeowners. In 1970, three times the average adult weekly wage was needed to acquire a median-priced home. Today, it takes nearly 10 years wages, and it will take 15 years wages by 2020 and 29 years wages by 2040. Of course, housing affordability is not helped by the major development corporations pushing up land prices through land banking – controlling the release of land for development and thus being able to artificially inflate prices.

Recent media articles emphasise that developers do appear to bank land. The Age’s National Times included these comments on 20 March: “Developers can only be expected to act out of self-interest by controlling supply. It is quite another thing for the state property agency, VicUrban, to sit on a bank of 25,000 housing lots listed for development and release just over 700 a year. One of VicUrban’s key responsibilities is to provide affordable housing, but chief executive Pru Sanderson says: ‘VicUrban’s act requires it to operate commercially’.”

According to comments in The Age on 18 March: “Matthew Quinn, managing director of Australia’s largest residential developer, Stockland, recently explained the company would continue to keep about a quarter of its land holdings in a long-term bank to ensure maximum capital growth”.

If there is a take-home message it is that if we continue to grow we will destroy our biodiversity and can expect SEQ to become an increasingly grey and less healthy place to live. At the same time we will have wasted our resources on infrastructure that has added little to improving our lifestyle and well-being.

“A society will be defined not only by what we create, but by what we refuse to destroy.” These are the words of John Sawhill, former President and CEO of The Nature Conservancy, and I often reflect upon them and wonder how the court of public opinion in the future will judge our generation.

We have an opportunity to create a safe, happy and vibrant society that will cater for all needs and aspirations. Such societies already exist and are based on economies with stable or low population growth rates. These economies are successful and strong, supporting ongoing development focused on improvements. Adopting a stable population provides opportunities for all and it will protect our environment.