Immigrant journey

It seems a bit far fetched. It's short on detail as well. The hospitality industry is not known for paying well and if you have made 10% a year on blue chip shares over that time period you were doing well. Presumably you needed to pay rent, buy food etc - how much would have been left over to buy shares, then get a deposit and then pay off the 1st investment property (as well a buying a 2nd one)?

 

IT industry no doubt the likes of Wipro and Infosys - even graphic design jobs in yellow pages are now outsourced overseas.

Well when you have higher population - a lot of things are required to enable ppl to live, do people need food, water, medicine when sick, education for kids, mechanics for cars etc etc. This would be different if you said this is Dubai where they cram thousands in a camp site away from the construction as manual labour (many with their families far away) - no different to fly in fly out from the mining boom in perth. Either way, schools are opening, new teachers, cleaners, Hopsitals clinics - there are permits for a lot of these to open. Dental issues (which I have some now - which needs to be attended to) doctors, nurses, equipment manufacturers, sonographers, dentist all need to be hired too. New coles supermarket which I just visited 40km away in Melbourne - who is going to be the cashier, manage the fresh food, stockers, packers, cleaners. If there wasn't anyone in the first place - there was no need. Also infrastructure being built roads, train stations, hospitals, schools add to the city's productiveness.

Ponzi scheme is more pyramid type investing

 

Yes all that gives the illusion of growth and economic activity, but it doesn't make any better off in a per capita sense (and the empirical evidence backs that up). All the public infrastructure and services has to be paid for and if it is not built then we pay for population growth with declining services, congestion etc. So at best we are just standing still in the face of population growth and the existing population has to put up with higher taxes, toll, sell off public assets, government austerity etc. in other words our capital gets diluted.

 

Using high population growth to 'grow' the economy is very much like a Ponzi or pyramid scheme and these schemes don't end well:


https://www.theglobalist.com/is-population-growth-a-ponzi-scheme/


Is Population Growth a Ponzi Scheme?

When it comes to population growth, why is more not always better?


By Joseph Chamie, March 4, 2010


Takeaways

• Concerns about population growth become radioactive. Politicians, journalists and environmentalists choose by and large to sidestep the entire issue.
• In an unrelenting public relations campaign, every effort is made to equate population growth with economic prosperity and national progress.

Bernie Madoff’s recent Ponzi scheme has drifted out of the world's headlines. However, there is another even more costly and widespread scheme — “Ponzi Demography” — that warrants everybody's attention.

While it may come in many guises, Ponzi demography is essentially a pyramid scheme that attempts to make more money for some by adding on more and more people through population growth.

While more visible in industrialized economies, particularly in Australia, Canada and the United States, Ponzi demography also operates in developing countries. The underlying strategy of Ponzi demography is to privatize the profits and socialize the costs incurred from increased population growth.

The basic pitch of those promoting Ponzi demography is straightforward and intoxicating in its pro-population growth appeal: "more is better." However, as somebody who has spent a lifelong career as a demographer, including 12 years of service as the director of the United Nations Population Division, I find that more is not necessarily better.

As has been noted by Nobel laureate economists Joseph Stiglitz and Amartya Sen as well as many others, current economic yardsticks such as gross domestic product (GDP) focus on material consumption and do not include quality-of-life factors.

Standard measures of GDP do not reflect, for example, the degradation of the environment, the depreciation of natural resources or declines in individuals' quality of life.

According to Ponzi demography, population growth — through natural increase and immigration — means more people leading to increased demands for goods and services, more material consumption, more borrowing, more on credit and of course more profits. Everything seems fantastic for a while — but like all Ponzi schemes, Ponzi demography is unsustainable.

When the bubble eventually bursts and the economy sours, the scheme spirals downward with higher unemployment, depressed wages, falling incomes, more people sinking into debt, more homeless families — and more men, women and children on public assistance.

That is the stage when the advocates of Ponzi demography — notably enterprises in construction, manufacturing, finance, agriculture and food processing — consolidate their excess profits and gains. That leaves the general public to pick up the tab for the mounting costs from increased population growth (e.g., education, health, housing and basic public services).

 

I think a lot of the plans in Victoria were planned a decade ago. and you are right, there are many sell-offs of public assets. Even our power grids are not Australian Owned. and Approval for certain things needs the tick off overseas. I won't be surprised the water authorities are next on the list.

Great article though I think every city/state is different. Similarly like Sydney is the financial capital of Australia like New York it will always attract investment and jobs. I think it is more applicable for mining towns more like boom bust kind of scenarios as it is solely reliant on one facet of employment.

 

In NSW the state government has been selling everything not nailed down to help pay for infrastructure projects. When state assets are sold consumers tend to have to pay more for their services. There might also be a tendency for taxes to be raised as governments lose the dividends they used to pay.

Mining doesn't rely on an ever increasing Australian population to boost profits, unlike the finance industry which does benefit from Ponzi demographics.

 

That is more a political thing I suppose - nothing you and I can do but just complain but either way it is going to happen - so best just work within the constraints to see how it can maximise your strategy in property gains. There are ombudsman and regulators but yeah everyone knows where that is heading. Either way the future is with this New Energy alternatives which I believe has some way to go but will reduce the reliance on power companies to provide energy to customers.

Rather than focus on the theory on Ponzi. Mining did attract a lot of people to buy housing and then needs for services and products increases. But when the jobs in the mining drys up, demand of services and products decreases and there is basically an exodus of people moving. Back in the 2008/09 - I put myself in a ballot for a lot of the port hedland land lots to build just to see how hard it was to get it. I went to scope around there it was booming, bustling but look at it now.

 

The mining construction phase (which employs a lot of people) may be over, but mining still produces a lot of wealth for the country through royalties and other taxes. And if the prices of some commodities have gone down companies have increased the volume. It is very different to the FIRE industries which benefit from high population growth (more tickets to clip).

 

it does no doubt - but where are port hedland, Moranbah and where are Gladstone property prices now? which are relevant to this forum in terms of property investing. unfortunately it is what it is just my view if you look at international cities like New York, hong kong financial capitals of the world - ppl squeezing into hongkong like chickens in cages. Prices are the highest in the world. my parents own one property in Europe (capital city) since the 70s and throughout the nearly 50 years it has only trended one way which is up. there will be drops but stil long term the trend is up. If the theory of population boom to bust applies to every high population city, every highly populated city would have blow out and busted (which is not logical I believe although it would apply in some cities) there are too many other variables in play.

 

Well that's my point, population growth does benefit real estate prices (at least for a while) as well as the rest of the FIRE sector. But do we really want Hong Kong or NY style density? If the economic model depends on endless population growth how is it sustainable in a finite World? Would it not be logical to look for another model? Can you really say their residents are any better off? The US also has a huge underclass of working poor, do we really want to head down that path?

 

All relevant questions and i certainly would not want us to head down the path of Hong Kong or the us in terms of the large gap between haves and have nots etc but unfortunately for you a lot of your points aren't really backed up by evidence in an Australian context

Our standard of living is high and greater than decades ago, our unemployment rate for the last decade, including now, is a significant amount lower than the average for the previous few decades and environment aside most of your "the world is ending" scenarios appear to be pretty far off what's actually occuring

We've had massive population growth but unemployment is lower than prior to this large growth and our standard of living arguably is higher, certainly the opportunities presented far exceed decades ago

 

Well the evidence does back me up actually. If you look at a graph of per capita GDP it has fallen into a crater and this closely coincides with the start of mass immigration 15 years ago. Wages growth is at record lows. As for unemployment ours is a lot higher than many other developed countries, especially those with lower population growth (Japan has about half the rate with a declining population).

As to general standard of living there was a study done which found it peaked in 1974 when Australia had a population of 15 million and pointed out that population growth was to the detriment of our standard of living.

 

I have Indian clients who have achieved amazing things on very moderate wages applying the above method.

I find they are usually very loyal and appreciative of the efforts you go to for them which always makes the dynamic a good one.

@google boy - thanks for sharing and kudos to you.

 

that's more a social or moral question probably something politicians or the ppl in charge could have to answer. We mere mortals in terms of investing can only hope to pick the winners in terms of gains

 

Care to share this evidence?

Also, it's disingenuous to compare Australia's unemployment rate with other nations and use that as some kind of sign that population growth is to blame, you should be comparing unemployement and workforce participation rates in Australiapost high immigration vs pre, but you already know that, i suspect it doesn't fit the narrative you're going for

 

I have put it up before. So you are admitting you haven't looked at these indicators yet felt compelled to say the field evidence is all against me?

Regarding unemployment of course it has been higher in the past because we have had recessions which lead to a spike in unemployment. You can see it clearly when you look at a graph. So a timeline in the same country actually means less in this context compared to making comparisons between countries.

 

Here's the article which suggests progress stalled around 1974:

Why a population of, say, 15 million makes sense for Australia

A better measure of wellbeing than GDP
The idea that population growth is essential to boost GDP, and that this is good for everyone, is ubiquitous and goes largely unchallenged. For example, according to Treasury’s 2010 Intergenerational Report:

Economic growth will be supported by sound policies that support productivity, participation and population — the ‘3Ps’.

If one defines “economic growth” in the first place by saying that’s what happens when you have more and more people consuming, then obviously more and more people produce growth.

The fact that GDP, our main measure of growth, might be an utterly inadequate and inappropriate yardstick for our times remains a kooky idea to most economists, both in business and government.

Genuine progress peaked 40 years ago
One of the oldest and best-researched alternative measures is the Genuine Progress Indicator (GPI). Based on the work of the American economist Herman Daly in the 1970s and ’80s, GPI takes into account different measures of human wellbeing, grouped into economic, environmental and social categories.

Examples on the negative side of the ledger include income inequality, CO2 emissions, water pollution, loss of biodiversity and the misery of car accidents.

On the positive side, and also left out of GDP, are the value of household work, parenting, unpaid child and aged care, volunteer work, the quality of education, the value of consumer goods lasting longer, and so on. The overall GPI measure, expressed in dollars, takes 26 such factors into account.

Since it is grounded in the real world and our real experience, GPI is a better indicator than GDP of how satisfactory we find our daily lives, of our level of contentment, and of our general level of wellbeing.

As it happens, there is quite good data on GPI going back decades for some countries. While global GDP (and GDP per capita) continued to grow strongly after the second world war, and continues today, global GPI basically stalled in 1970 and has barely improved since.

In Australia the stall point appears to be about 1974. GPI is now lower than for any period since the early 1960s. That is, our wellbeing, if we accept that GPI is a fair measure of the things that make life most worthwhile, has been going backwards for decades.

What has all the growth been for?
It is reasonable to ask, therefore, what exactly has been the point of the huge growth in GDP and population in Australia since that time if our level of wellbeing has declined.

What is an economy for, if not to improve our wellbeing? Why exactly have we done so much damage to our water resources, soil, the liveability of our cities and to the other species with which we share this continent if we haven’t really improved our lives by doing it?

As alluded to earlier, the answer lies to a large extent in the disastrous neoliberal experiment foisted upon us. Yet many Australians understand that it is entirely valid to measure the success of our society by the wellbeing of its citizens and its careful husbandry of natural capital.

At the peak of GPI in Australia in the mid-1970s our population was under 15 million. Here then, perhaps, is a sensible, optimal population size for Australia operating under the current economic system, since any larger number simply fails to deliver a net benefit to most citizens.

It suggests that we have just had 40 years of unnecessary, ideologically-driven growth at an immense and unjustifiable cost to our natural and social capital. In addition, all indications are that this path is unsustainable.

With Australian female fertility sitting well below replacement level, we can achieve a slow and natural return to a lower population of our choice without any drastic or coercive policies. This can be done simply by winding back the large and expensive program of importing consumers to generate GDP growth – currently around 200,000 people per year and forecast to increase to almost 250,000 by 2020.

Despite endless political and media obfuscation, this is an entirely different issue from assisting refugees, with whom we can afford to be much more generous.

 

This article covers most of the points I raised:

High immigration masks Australian economic decline

 

The above has some decent points but has also been rightfully debunked as having too many holes to be taken as gospel

1) i believe it is based on Australia you up until 1997, so an entire 20 years is missing

2) it assumes as fact a number of factors that people don't universally agree on

3) 1974 - claiming this was the peak of Australian standard of living immediately means a good amount of credit ility is lost.

1974/75 was when Australia had over 15% inflation and 1974 was when unemployment nearly doubled to 4 and a bit %. It was also only a year after the white Australia policy was abolished and our labour participation rate was also a lot lower because of course many women were not really allowed to pursue their ambitions or own path

It was also a time where Australia was significantly lower educated and many people had to settle for their "lot in life".

So yes, I suppose if you weren't female or if you weren't non Anglo, or if you weren't overly intellectual or ambitious or if you weren't all that keen on exploring the world or even the rest of the country, or if you weren't too fussed with the massive labour strikes that year that saw over 20 % of the country try on strike while massive inflation rub riot and the unemployment rate doubled then I guess maybe it was "peak Australia"

For everyone else, not so much

 

Eg: "1) i believe it is based on Australia you up until 1997, so an entire 20 years is missing"

It refers to the present day so where did you get that idea?

"2) it assumes as fact a number of factors that people don't universally agree on"

Since when would you get universal agreement in the field of economics? The point is it is more realist than simple measures
like GDP.

"3) 1974 - claiming this was the peak of Australian standard of living immediately means a good amount of credit ility is lost".

Smacks of a closed mind and not treating the research on it's merits.

"1974/75 was when Australia had over 15% inflation and 1974 was when unemployment nearly doubled to 4 and a bit %. It was also only a year after the white Australia policy was abolished and our labour participation rate was also a lot lower because of course many women were not really allowed to pursue their ambitions or own path"

None of those things are the result of a small population. It says something that despite those negatives the era still scored high with regards to standards of living.

"It was also a time where Australia was significantly lower educated and many people had to settle for their "lot in life"."

University education was free then.

"So yes, I suppose if you weren't female or if you weren't non Anglo, or if you weren't overly intellectual or ambitious or if you weren't all that keen on exploring the world or even the rest of the country, or if you weren't too fussed with the massive labour strikes that year that saw over 20 % of the country try on strike while massive inflation rub riot and the unemployment rate doubled then I guess maybe it was "peak Australia""

Once again none of those red herring are related to a small population.