Population growth underpins the business cases of most if not all the transport infrastructure projects to which governments have committed. The Council of Australian Governments acknowledged this, discussing in early 2020 'the market's capacity to deliver Australia's record pipeline of infrastructure investment to support the country's growing population'.54 Population growth exacerbates urban congestion, and creates pressure to upgrade ports, airports, and other facilities.
But the COVID crisis has caused population growth to fall off a cliff. Net overseas migration fell from 239,600 in 2018-19 to minus 72,000 in 2020-21.55 We should not assume a return to the high-immigration policies that Australia had for many years before COVID.
Natural increase is well down too. Australia's fertility rate, currently at 1.69 babies per woman,56 is expected to fall to 1.62 by early next decade.57 The Australian Government expects the rate of population growth to be permanently lower than the rates assumed before COVID-19.58
Of course, infrastructure is a long-term investment, and Infrastructure Australia is continuing to take a 30-year view of projects, even in the midst of COVID-19. But we don't yet know whether Australia will resume its old path in a couple of years. Fertility rates in the rest of the rich world, and China, are already consistent with long-run population decline. India and the world as a whole are not yet in this territory, but total fertility rates are declining steadily.59
____________________________________________________________________________
54. Council of Australian Governments (2020).
55. ABS (2020b); and Commonwealth of Australia (2020a, Section 2, p. 34).
56. Commonwealth of Australia (2020a, Section 2, p. 34).
57. McDonald (2020, pp. 2-4).
58. Commonwealth of Australia (2020a, Section 2, p. 34).
59. C. I. Jones (2020).