Wed, 16 May 2018 - 10:09
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What affects how fast or slowly our cities grow?

As people in Sydney and Melbourne know very well, their cities are growing strongly.

By contrast cities like Darwin, Launceston and Townsville are seeing low growth.

Several factors affect how fast or slowly a city grows.

One is natural population growth: the number of births each year less the number of deaths. 

The next is net overseas migration: the number of people coming to live in Australia less the number of Australians moving overseas.

A third factor is internal migration, as people move from one location in Australia to another. For example, construction of the huge INPEX natural gas plant attracted many people to move to Darwin. With construction now almost complete, Darwin is seeing its population growth slow down

An informative recent report from the Bureau of Infrastructure, Transport and Regional Economics (BITRE), ‘Regional Population Growth, Australia 2016-17’, using new Australian Bureau of Statistics data, casts some further light on these issues. Let me highlight three observations.

First, natural population growth is important in the growth of our capital cities –with the natural increase representing over a third of the positive population growth across our capital city areas.

Second, the impact of net internal migration varies from city to city.  In the 2016-17 period, Melbourne, Brisbane, Hobart and the ACT experienced positive net internal migration: more people moved to those cities from other parts of Australia than went the other way.  For Darwin, Adelaide, Sydney and Perth the opposite occurred.  This likely reflects weaker job markets in Adelaide, Darwin and Perth (particularly following the mining boom), and cost of living factors in Sydney.

Thirdly, we can see a clear trend in the direction of internal migration.  Australians are leaving inland cities and country areas and moving to coastal cities and country areas.

Population growth has important social and economic impacts.  But a lot of commentary on this topic tends to treat immigration and population growth as the same thing.  A look at the underlying numbers in this BITRE report highlights an important point: a city’s population can grow fast, or more slowly, for reasons unrelated to immigration levels.