The Treasurer, Jim Chalmers, released the latest intergenerational report last week. Like its five predecessors, the report puts lots of questions to us about how we can live fruitfully and sustainably on this unusual continent we occupy.
The report confirms that the average age of Australians will rise, that average family size will fall, and that we need to attract enough migrants to ensure there are sufficient workers and taxpayers to keep the joint running. Population growth via immigration is seen, therefore, as crucial to the nation's future. Dr Chalmers calculates by 2063 Australia is likely to reach a total of 40.5 million people, significantly up from 26 million currently.
We need to ponder carefully the implications of the scenarios detailed in the intergenerational report. In the Lower Hunter - and here I aggregate statistics for the local government areas of Cessnock, Lake Macquarie, Maitland, Newcastle and Port Stephens - we find similar demographic trends to those Dr Chalmers identifies for the nation, but with local variations.
Looking back over the past 15 years, say from the 2006 census to the census in 2021, we see the population of the Lower Hunter increased by 120,000 people to reach a total of more than 610,000 people. This is substantial growth. Yet 36 per cent of population growth in the Lower Hunter over these 15 years occurred in age brackets of 65 years or more. And ageing in the Lower Hunter is geographically concentrated with growing numbers of the elderly occupying the serene waterside neighbourhoods around Lake Macquarie and Port Stephens and, increasingly, in new apartments in downtown Newcastle.
Population growth in the Lower Hunter over the past 15 years has generated substantial demand for new dwellings. Indeed, more than 50,000 new dwellings were constructed in this 15-year period. The type of new dwellings completed is revealing. Barely 6 per cent - although this is 3200 units - of new construction involved dwellings in apartments, and overwhelmingly these have been built in downtown Newcastle, largely to meet demand for retirement accommodation from both locals and retirees from elsewhere.
Otherwise the Lower Hunter hasn't embraced the idea of medium- and high-density neighbourhoods. Well over 90 per cent of all new residential construction has been detached or semi-detached dwellings. These are concentrated in the Lower Hunter's greenfields estates, the nappy belts slapped onto post-war Newcastle and Lake Macquarie to the west, the cookie-cutter developments transforming townships around Raymond Terrace and Port Stephens into outer suburbia, and leapfrogging westwards up the New England Highway and along the Hunter expressway.
The intriguing thing about these 50,000 new dwellings is the enormous economic benefits created for the Lower Hunter by their construction. Not surprisingly, we find a high proportion of demand for new dwellings in the Lower Hunter comes from population growth generated by a booming construction sector. So a tradie from western Sydney, by moving to the Lower Hunter, finds a cheaper new home, relief from Sydney's congested, expensive roads, and a more relaxed lifestyle in which to raise a family.
But there are limits, major risks, for the Lower Hunter economy in relying so heavily on the residential construction sector. As a population ages and immigration levels plateau into the future, the need for new dwellings will diminish. The inflow of new workers ceases, the demand for new dwellings hits a wall, local jobs in the sector disappear, and all sorts of negative shocks spread through the local economy.
Where to then for the Lower Hunter economy? Will we confront, mid-century, a regional economy where coal mining jobs have disappeared, where the construction sector has faltered, where a growing proportion of the workforce becomes dependent on a low-wage, services economy, growing only through poorly paid jobs in aged care, disability support, and basic health services?
Treasurer Chalmers says we should use the intergenerational report not as a crystal ball, but as a prompt to guide the decisions we make about the future. Now is the time to act to ensure that the Lower Hunter economy beyond 2050 is a diverse, prosperous one. What is clear in 2023 is that business as usual - a heavy reliance on residential construction, and coal mining - is unlikely to deliver the outcomes we desire.
Phillip O'Neill is professor of economic geography at Western Sydney University.
