In August 2025, Australia's leaders gathered for yet another Economic Reform Roundtable, hoping to crack the code on the nation's stagnant productivity. But as Leith van Onselen pointed out in Macrobusiness on August 26, 2025, they're missing the elephant in the room: mass migration. World Bank data reveals Australia's population surged by 45%, roughly 8.5 million people, in the first 25 years of this century, the fastest growth among advanced nations. This tidal wave of newcomers has drowned out any hope of meaningful productivity gains, rendering roundtables like these agonisingly futile. No matter how many reforms are proposed, the sheer numbers wash away progress, leaving Australians poorer and policymakers chasing their tails. It is just managed decline now.
The maths is brutal. Since 2000, Australia's population has ballooned from 19 million to over 27 million by 2025, per World Bank figures. That's a 45% leap, outpacing every other developed nation. Yet, as van Onselen notes, this growth hasn't been matched by the tools, homes, or infrastructure needed to sustain it. Productivity, output per worker, has flatlined for eight years and dropped 1% in the year to March 2025, according to the Australian Bureau of Statistics. Why? Because the nation hasn't provided "extra workers with extra tools, machinery, and technology; extra homes for the millions of extra families; and extra infrastructure (roads, rail, schools, hospitals, water supplies, energy, etc.)."
Instead of investing in capital to boost productivity, Australia has leaned on population growth in a great population Ponzi scheme, to prop up GDP. The result is "capital shallowing," less investment per person, diluting the economic pie. Real GDP per capita has fallen for six straight quarters, the longest decline since 1973, per the Institute of Public Affairs. While the economy grows in raw statistical terms, each Australian gets a smaller slice. Roundtables wax poetic about tax reform or innovation, but these are Band-Aids on a wound gushing from unchecked migration.
The housing crisis is exhibit A. Net migration hit 1.6 million in the four years post-COVID, catching the government flat-footed. The 2022 Housing Accord, meant to address shortages, has been a drop in the bucket. Rents in capital cities have soared 20-30% since 2022, and homeownership is a pipe dream for most young Australians; only 15% of Gen Z own homes, compared to 45% of Boomers at their age. Infrastructure fares no better. Sydney's roads are choked, hospitals are stretched, and schools are overcrowded. A 2023 report estimated a $1 trillion infrastructure deficit by 2030 if migration continues at current rates. No roundtable can fix this when the population grows faster than the cranes can build.
Van Onselen's critique cuts deeper: Australia's mineral wealth, a key driver of past prosperity, is now spread thinner across more people. Exports haven't scaled with population, so per capita wealth shrinks. Meanwhile, energy policy missteps, rushing to renewables without reliable backups, add costs that choke industry and further erode productivity. Every reform discussed in Canberra is swamped by the sheer volume of new arrivals, each needing homes, jobs, and services that don't exist.
The roundtable's fatal flaw, as van Onselen argues, is its refusal to confront migration head-on. Treasurer Jim Chalmers entered with Treasury forecasts claiming productivity would rebound to 1.2% growth, ignoring the ABS's grim reality. The "three Ps" framework, population, productivity, participation, treats migration as a neutral input, not a wrecking ball. But when 85% of economic growth in 2023 came from population alone, per IPA research, it's clear the system is addicted to numbers, not quality. Any productivity gains from tax tweaks or innovation are washed away by the flood of new mouths to feed, homes to build, and roads to pave.
This is about scale. A 2024 OECD study found that while skilled migration boosts productivity (a 10% increase in migrant share lifts regional wages by 1.3%), Australia's recent influx leans heavily on low-skilled workers and students. Salvatore Babones, writing in The Australian Financial Review, notes these arrivals often fill low-wage jobs, driving down real wages and efficiency. The roundtable's silence on this dynamic is deafening, senior academics and policymakers, cosy in their tenured bubbles, avoid the migration question, leaving the mess for the next generation to mop up, if it can be cleaned up.
Van Onselen's solution is straightforward: shift to a smaller, higher-skilled migration program. This would ease pressure on infrastructure, boost capital per worker, and lift living standards, especially in choked cities. It's not a panacea, but it's a start. Roundtables that dodge this reality are exercises in futility, like rearranging deck chairs on a sinking ship. Christians might see a parallel in stewardship, God calls us to manage resources wisely (Luke 16:1-13), not squander them on unsustainable growth. The public, meanwhile, feels the squeeze: 60% of Australians polled in 2025 want lower migration, citing housing and cost-of-living pressures.
Australia's productivity crisis isn't a puzzle to be solved by more reports or roundtables. It's a direct consequence of a migration blindspot that drowns reform in a sea of numbers. Until policymakers face this truth, no amount of brainstorming will stop the slide in living standards. The question isn't how to tweak productivity, it's whether Australia can stop chasing illusory statistical growth for growth's sake and start building a future where every citizen has a fair share.