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Big Australia vs Huge Australia

Big Australia vs Huge Australia

Recently I have been doing some numbers myself and I can sense a new debate coming soon – one called “Big Australia vs Huge Australia”. (I hope I am not the first one to come up with this name, as I really don’t want to be known as the guy who started the Big Australia vs Huge Australian argument in Australia.)

Let’s define what I mean by a “Huge Australia” first. If a “Big Australia” means adding 14 million visitors to the current population to take it to 36 million, then maybe a “Huge Australia” should double that increase to add 28 million people to take the populace to 50 million people!

If that figure shocks you, let me give you a different perspective from outside of Australia. If I were to explain to a Chinese friend of mine residing in China about the idea of a “Huge Australia”, I’m certain he would think that I have been living in Australia for far too long. He would guarantee me that at least one billion Chinese wouldn’t be able to understand why I would call 50 million people HUGE on a piece of land the size of Australia, which is similar to China and US. He’d probably still call us a “Small Australia” even if we reached a population of 50 million people, because he’d imagine the 22 million people we have today must be scattered all over the place to occupy such a very large but mostly unused island.

I think there is some merit to this view, don’t you? Imagine if the US had only 22 million people residing in it today (i.e. not much more than the population of Greater Los Angeles Area)? It would feel like a pretty empty island yet Australia is even bigger than the united states in land size!

Now why do I see the idea of a “Huge Australia” as not entirely crazy? Although currently I haven’t seen anyone proposing such a projection from the government or business community, here are a few key reasons why I think it is possible:

1) Australia has the means to become Huge.

Currently we are accepting 400,000 migrants normally every year. This converts to 1.8{8c6f3a7d6ed1076b5c9e09c9834ae2bbe88750a844b76ee68813e6cbd387c76d} increase of the existing population. All you have to do is to include another 0.2{8c6f3a7d6ed1076b5c9e09c9834ae2bbe88750a844b76ee68813e6cbd387c76d} to consider it to 2{8c6f3a7d6ed1076b5c9e09c9834ae2bbe88750a844b76ee68813e6cbd387c76d}, which is around an extra 50,000 people a year, be it guest workers or any other form of visas, it will take Australia to 50 million people by 2050.

A 2{8c6f3a7d6ed1076b5c9e09c9834ae2bbe88750a844b76ee68813e6cbd387c76d} increase per year in population is very little different to the 1.8{8c6f3a7d6ed1076b5c9e09c9834ae2bbe88750a844b76ee68813e6cbd387c76d} we are doing right now, which is still way below the threshold of noticeable difference. That is similar to our inflation figure. It is hard to notice price increases if they’re less than 3{8c6f3a7d6ed1076b5c9e09c9834ae2bbe88750a844b76ee68813e6cbd387c76d}. And at that rate they are highly unlikely to cause any financial chaos.

So if Australia wants to become Huge (i.e. have 50 million people by 2050), we’ve the methods to do it without the majority of the general public even noticing the difference.

The true question is not whether Australia wants to be Huge. For me, a more practical question probably should be whether Australia gets the choice NOT to become Huge!

2) Australia may be forced to become Huge.

None of us would question the arrival of the 4 seasons one after another, year after year. There is some kind of law behind this rotation which we can observe even if we can’t fully clarify it.

The changing of the seasons is similar to the way in which countries rise to become economic powers and then fall again. In the event that you look over the past 500 years, there have been 9 countries which rose to a level of power which enabled these to dominate the world economy in their own particular eras. They are Portugal, Spain, Holland, England, France, Germany, Japan, Russia and America. As the old saying goes, what goes up must come down. non-e of the countries escaped their decline and each gave way to another country to take on the role of leading the world.

We are actually well into the “Asian Century” as our Prime Minister has recently put it. I’d probably call it the “Australian Century”, as there has never been a time in history where Australia has been pushed to the centre of the world stage in terms of both financial and politics power.

Australia is uniquely positioned as a bridge between Asia and the rest of the world. It is the only country (apart from New Zealand) with a Western civilisation and lifestyle in the same time zone as Asia.

Today, the barrier of distance is being removed by technologies such as the Internet, video-conferencing, etc., only one hurdle to efficient communication still remains – the time-zone barrier!

You can communicate with most Asian countries during business hours by living in Australia. Alternatively you will need to work night shift or afternoon shift if you were based in European countries or America. This is one of the main explanations why so many multinationals strategically set up their Asian Pacific headquarters and design capacity in Australia.

Australia’s biggest problem for a long time has always been that it was considered “isolated” because of its distance from other continents. But now its location means it is perfectly positioned as the Western gateway to Asia. With the boom of Asia you can see why Australia has been getting such unprecedented attention lately. Have you noticed recently there is a fight for attention in Australia from the two largest economies in the world that represent the East and the West?

As “laid back” as the Australian culture has been in the past, I believe Australia will increasingly be required to take on some type of leadership role quickly, as the Western desperately needs to find growth opportunities from the East. At the same time the East desperately wants to improve their living standards, and Australia finds itself perfectly situated as the conduit for those two aims. Ultimately it means we have no alternative but to get bigger and wealthier.

After all, those 9 other countries, some noticeably smaller than Australia, all had their turn during the last 500 years. Using the decrease of America and Europe it has got to be someone else’s turn this time. If not Australia, can you pick another country in the Western world which is more flawlessly positioned and ready to prosper right now than us? I can’t.

3) It may be in Australia’s interest to be Huge.

Have you noticed that Australia has been busily shipping all the resources our 22 million people don’t currently need overseas? Quite simply, we are selling our most valuable resources to build up other countries rather than our own.

If you think this makes sense, put on the thinking hat as a property investor. Imagine you are a farmer sitting on a large piece of land. Which is smarter: just sell off your land now for today’s price or allow more folks to work for you on the land forever? That is one reason why you often see the majority of the larger land development projects being joint ventures between the farmer and the land programmer, so that the farmer gets a much better return on his land.

The Australian government is just like a farmer who happens to be sitting on a big parcel that has lots of potential. Why wouldn’t you allow more people to come and work on your land, instead of selling it off to overseas buyers just because you don’t have enough domestic demand?

This is one reason I think it is in Australia’s best interests to attract the finest talent from round the world to develop our more internationally competitive industries while we are available down our resources. Selling down our resources is only a temporary cash flow strategy; it isn’t a long-term survival investment strategy.

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