Interview with Tom Oriti, ABC NewsRadio

TOM ORITI:

Within a decade, Australia's population is expected to be smaller and older than what was predicted before the COVID‑19 pandemic. The Centre for Population's 2022 Population Statement reveals the pandemic has had a substantial impact on the country's population, and it's mostly because of border closures which led to limits in overseas migration. Melbourne is still on track to overtake Sydney as Australia's biggest city - that rivalry is showing no signs of stopping -  that's despite its population taking a hit during the pandemic as well. And there are some other surprises, the Population Statement shows there was actually no COVID baby boom. We were hearing at the time that there could have been, it hasn't eventuated. The Federal Treasurer, Jim Chalmers, says there are challenges and opportunities. Australia's population we're hearing won't fully recover from the pandemic for at least another decade. What kind of challenges do you think that will pose for the nation?

JIM CHALMERS:

COVID had the biggest impact on our population growth for more than a century, that's the size of the impact of what we've been through the last couple of years. It had implications, obviously for migration, but also for fertility that you raised in your introduction, and in a couple of other ways as well. And so we are dealing with some pretty substantial pressures, population growth will bounce back and is bouncing back, but the consequences of the last couple of years means that the population is growing a bit slower than was forecast a few years ago. And our population is getting even older than we anticipated a few years ago, and so that obviously brings an element of challenges to our society and to our economy and to our budget. But overwhelmingly, population growth is something that we embrace because the way that our population changes and grows is important for our society, and it's important for our economy.

ORITI:

Slower growth though. Let's chat opportunities, theoretically, does that give your Government more time to catch up on things like infrastructure, roads, hospitals, schools?

CHALMERS:

Certainly one of the main things that we are focused on as our population grows and changes, and as the distribution of that population changes as well, is making sure that government services and infrastructure - especially when you think about housing - that all of those areas keep up with the way that our population is changing. But really the main focus for us, and we've already made a heap of progress in this area, is to make sure that we've got the kind of workforce that we need to support a population which is getting bigger, but also getting a bit older. We want to make sure that with a combination of cheaper childcare, so that people can work more and earn more if they want to, training and skills are an important part of the story, migration as well, but not as a substitute for those other two areas. These are all the sorts of things that we are doing, to make sure that we've got that workforce which is capable of supporting a population which is getting older.

ORITI:

One thing that struck me is this COVID baby boom that we thought might happen didn't actually eventuate, it's expected to continue to decline. So given that. Jim Chalmers, when we look ahead, should the Government look at ways of reversing that trend? Or is the focus now on boosting overseas migration? What should the priority be there?

CHALMERS:

A couple of things about that. I think the analysis of the fertility rates is one of the really quite fascinating elements of the Centre for Population piece that I'll pull out later this morning. It really is because, yes, we've seen a little bit of a rebound in the fertility rate - that's welcome but we would like it to be higher. And one of the ways that you encourage people to have more kids, if they're in a position to do that, is by making early childhood education cheaper and more accessible, because we know anecdotally and we know broadly, including from conversations in our own communities, that one of the big factors in people's decisions about how many kids to have is whether or not they can afford childcare when they go back to work. And so that's a big part of what we're doing, we put that in place in the October Budget. Some of these issues are pretty detailed, but you asked about what the priority should be, and this is the key, right? Because frequently we think, okay, we need to get the right kind of population growth. And so we're choosing from a menu of migration, cheaper early childhood education, skills and training, all these workforce issues, the reality is we need to do all of these things at once. We want a population and a society which is growing and welcome in healthy ways, and a workforce to support an ageing population. And in order to do that, we need to act on all of these fronts at once and we are.

ORITI:

Given that though, what we're seeing at the moment means inevitably at this point, a dwindling portion of working age Australians in the years ahead, that means fewer people to pay for things like aged care, the NDIS, which we know is going to get more expensive, defence, how do you plug that revenue hole?

CHALMERS:

That is one of the challenges. One of the things that has been clear for some time, and actually, I wanted to pay tribute to one of my predecessors from the other side of politics, Peter Costello, who really did do a good job putting some of these issues on the agenda, is when your population is ageing like a lot of countries are around the world, like we are here in Australia, that does put pressure on the budget, because you want to be able to provide great health care and great services and appropriate levels of pensions and other payments for people at that stage of life. And so in order to do that, you need to find ways to fund it. That's one of the reasons why we need to get the workforce issues right, because we want to get our workforce in as good a condition as it can be, the right size, the right level of skills and training, good, secure, well paid jobs, so that people are making a contribution to looking after people in the later stages of life.

ORITI:

Speaking of which, we actually had the Aged and Community Care Providers Association on about an hour ago, the CEO, saying that the sector is just getting increasingly financially unviable, so many providers running at a loss. I challenged that at the time, saying hang on, a lot of them are actually run by huge insurance providers, they are making millions of dollars. And he said, 'no it's a myth, it's not the land of milk and honey that people think it is.' Do you have a view on that? Does the aged care system need more help from the Federal Government at this point? Or does it need to step up more?

CHALMERS:

Probably both, but it's getting a lot more help from the new Commonwealth Government. I think all of your listeners, Tom, would appreciate that aged care has been a mess for some time. And what we're trying to do in the Albanese Government is to clean it up. I've got a great colleague, Anika Wells, the Minister, working closely with Mark Butler and others. And what they've been able to do, and what we've been able to do in the Budget, is ensure that funding for aged care goes up, I think, from memory, something like 12 per cent this year, and we've got a reform agenda right across the board to make sure that we can get average funding per resident up, and that we can combine that with some of the other steps we're taking to alleviate some of this pressure on the system.

ORITI:

I just want to ask you about a prediction or a warning, I guess from the IMF earlier this week, a third of the world will go into recession this year, economic growth in the US, the EU and China is slowing. What about here, Jim Chalmers, how confident are you that Australia will avoid a recession?

CHALMERS:

I'm optimistic about our economy and our country into the future, but I'm realistic about what's likely to happen in the global economy this year and what it means for us. The global economy is entering a pretty dangerous period, I think that's well accepted almost right across the board. We won't be completely immune from a global downturn, but we've got our own advantages. We've got low unemployment, we're seeing the beginnings of some wages growth after a decade of stagnation, and we're getting good prices for what we sell the world on global markets. And so we've got a lot of things going for us but we won't be immune from a global downturn. And most people expect it to be a very, very difficult year for the global economy for a range of reasons - the war in Ukraine, COVID in China, the big inflation challenge that most developed countries and others are dealing with. All of this means that people broadly are pretty pessimistic about the global economy. I'm optimistic about our economy but we've got to get through some pretty choppy waters first.

ORITI:

While we've got you there though, COVID in China and relationships with global markets, that's an interesting dynamic. China's hit back at the entry restrictions that your Government and others around the world have imposed on Chinese travellers in response to the COVID surge there. Are you concerned that that could reignite issues with the Australia‑China relationship, when we were hearing they were getting better recently?

CHALMERS:

I think we're realistic about the relationship. There are a lot of complex and often difficult issues that we have to navigate in the region, and in our relationship with China, we've been pretty upfront about that. But we've also put a lot of work into trying to stabilise that relationship. I pay tribute to Anthony Albanese and Penny Wong and Richard Marles and others, for the effort that they have put in to try and stabilise that relationship. There will still be difficult issues, even when we are doing something as simple as imposing not especially onerous requirements on travellers, issues will pop up and we will try our best to manage them. But we're confident that we give ourselves a better chance of managing those complexities, those difficulties and those issues, if we try and engage. That gives us the best chance, not just managing these issues as they arise, but of a more peaceful and prosperous region, which is what we all want.

ORITI:

The Federal Treasurer is Jim Chalmers, joining us there.