by Sheila Newman smnaesp@alphalink.com.au Tel: (613) 97835047

Soon after the Second World War, France and Australia encouraged population growth. In both countries, immigrants were brought in to supply labour for manufacturing industries. Australia also wanted to increase the size of its local market. Both France and Australia wanted a bigger domestic population for defence reasons. France feared Germany's higher birthrate; Australia feared the high birthrates of its Asian neighbours.

High immigration was a feature of both countries' population policies until the early 1970s. Then following the first oil shock in 1973, France drastically reduced non-European immigration. Australia too cut immigration but then restored high levels after 1975.

Why did immigration policies of these two countries diverge so markedly? Much of the answer lies in their respective housing and land development policies.

Political scientist, Gary Freeman, has written extensively on immigration identifying ‘diffuse’ and ‘focused’ costs and benefits. Diffuse costs are borne by the general public, are difficult to quantify while focused costs are those borne by certain groups and are easy to identify. The groups affected are able to organise and lobby against them. Similarly, where benefits are focused, the beneficiaries lobby in favour of them.

Freeman argues that high immigration becomes entrenched in countries where its benefits are narrowly focused but its costs diffuse. This is true of Australia. Freeman says, "businesses like real estate and construction benefit from population growth". In France, on the other hand, real estate and construction businesses do not benefit from high immigration since land development is state planned. Because they receive no focused benefit from higher immigration, neither they, nor any other significant group, lobbies for higher immigration.

In the early part of the 20^th century the French instituted a system of land development planning whereby the national government coordinated and planned land-use and development in consultation with local government. It grouped land for similar purposes - agriculture, housing, wooded reserves, conservation of existing open spaces.

This planning system was modelled on Haussman's famous restructuring of Paris between 1853 and 1869. The government has the power to acquire land cheaply for public purposes, including housing. There are taxes on unearned improvements in land value.

Companies with more than ten employees are required to pay one per cent of salaries in tax to subsidise employee housing. Industry also has major infrastructure obligations in localities where it sets up plant.

This planning philosophy was built on the concept of "social solidarity": that those who have become rich in a society owe a debt to the society as a whole, for their wealth has been acquired through many anonymous acts of co-operation over time. It provided an important rationale for taxing speculative profits.

In France, housing is regarded as a human right where the State has a duty to see that all citizens are provided with housing. It does this by building dwellings and by subsidising rents and purchases at all levels. Mortgages are state-guaranteed in cases of hardship and home loans are provided at low interest.

While there is a private home-building market, the public housing system serves principally the lower socio-economic strata, which is that of the traditional immigrant worker.

After the Second World War there was a severe housing shortage in both France and Australia. In France, this lack of housing presented an obstacle to immigration and population building. Although employers were expected to provide housing for immigrant workers, they often failed to do so. French citizens were given priority in housing.

In 1962, when the French colony Algeria became independent, nearly one million French colonials and a few hundred Moslem refugees landed in France. This added to the already severe housing shortage. In 1975 a flood of South East Asian refugees added to the influx.

The repatriates from Algeria were frequently just as resented and traumatised as the Moslem refugees. But Moslems and other immigrants, if they did not have French citizenship, went to the bottom of the housing pile, to the bidonvilles, as the French call slums. There were fights, strikes, murders and fires associated with dreadful living conditions.

The Left saw the violence and degradation of the bidonvilles as a way to shame the right-wing government. They called for more housing for immigrants. This was financially costly and difficult to achieve logistically since most local councils (communes) did not want immigrant housing. Immigrants were concentrated in communist local government areas and their mayors wanted other neighbourhoods to take responsibility for immigrants as well.

Non-naturalised immigrants may not vote in local elections in France. Attempts were made to induce immigrants of bidonvilles to naturalise in return for housing but many were reluctant to apply. Problems finding suitable accommodation were a legal impediment to family reunion.

In 1973 Algeria stopped emigration to France on the grounds of racist treatment of Algerians. That same year, Germany and the other European Economic Community (EEC) countries formally closed their borders to non-EEC foreign immigrant workers. In 1974, France did the same.

André Postel-Vinay, the Minister responsible for immigration, said ceasing immigration was a preventative necessity due to: the doubling of the third world's population by late in the 20^th century; the likelihood of profound and lengthy economic crisis; and the problem of the public housing shortage for both French and foreigners. This became the long-term policy in France and the EEC.

In 1974, following closure of its borders to non-EEC immigrants, French immigration was the lowest since the war. Natural increase was also low, and thus demand for new houses fell drastically. There had been almost no protest about the closure of the borders by the housing industry that had never benefited from immigrants.

Unlike the Australian property development and housing industries, the French residential construction and property development industry did not seek to bolster itself with international loans, from Japan, for instance. In Australia Japanese construction companies provided important conduits for international loans for construction projects in Australia during the 1980s. The chart below shows how the Australian housing industry maintained a high production rate, in contrast to the French housing industry, which was forced to adapt to new conditions.

Instead, the French and West European residential construction industries rationalised, regrouped and restructured. They refocussed their designs and projects on energy-efficient renovation of existing structures.

Australia's property development and housing system, unlike that of France, is highly privatised and motivated by land speculation.

Although housing was affected by the depressions of the 1890s and 1930s, between the 1860s and the 1890s there had been a land speculation and building boom. This boom was largely immigration-dependent. Then gold ran out and drought set in. In the context of an international depression, immigrants dried up and Australians left the eastern states in search of gold elsewhere.

The 1903 the Royal Commission into the Decline of the New South Wales birth rate decided that the economic depression was due to a "birth dearth", and they immediately banned contraception and attempted to encourage high immigration.

Most of the members of the Commission were directors on the boards of companies and banks which had tied their wealth up in property speculation - so boosting immigration and the birth rate was a personal issue for the members of the Commission

After 1945, with the long boom, high immigration and the housing shortage, the speculative conditions of the 1850s goldrush were soon re-established. The property development industry became heavily dependent on immigration-fed population growth.

The combination of a baby boom and sustained high immigration meant that, in 1973, land prices increased by 46 per cent in Melbourne and 34 per cent in Sydney. In outer metropolitan areas, the demands of rapid population growth exceeded the availability of serviced blocks. The Whitlam government attempted to bring about changes to land development, urban planning and public housing to remove opportunities for land speculation.

In this they were bitterly opposed by, among others, the Hamer government in Victoria which was later implicated in a variety of scandals involving speculation and public housing.

The Whitlam government also attempted, like the French, to drastically reduce immigration in order to protect local employment.

Also, like France, it attempted to make Australia energy self-sufficient and to rein in oil use. A project to create a vast pipeline network round the continent to distribute natural gas was proposed by the first Minister for Minerals and Energy, Rex Connor.

The Cabinet minutes of the infamous Khemlani loan of 1975, which ultimately brought the Whitlam government down, reveal a very distinctive policy:

"...to deal with exigencies arising out of the current world situation and the international energy crisis...[and] to provide immediate protection for Australia in regard to minerals and energy and to deal with current and immediately foreseeable unemployment in Australia."

Whitlam cut back immigration "due to the advent of world recession", whilst "the Australian Population and Immigration Council was established to assist the government in the accurate assessment of Australia's immigration and population needs."

But the Whitlam government was sacked and these policies, which some with hindsight would say showed foresight, were dropped.

The succeeding Fraser government led a return to high-energy consumption and a population building policy. States vied for the foreign capital of Japanese construction companies.

Australia sought to attract investment by offering cheap energy leading to massive infrastructure development for rural industries.

As the economy was opened up to free market forces, speculation and housing price inflation increased, with strong encouragement from Treasury.

In Australia, the private development and housing industries flourish in the virtual absence of public housing competition. Although the Australian immigration rate drives private home-buying prices up, there is no strong national perception that population growth is costly - except perhaps environmentally.

Meanwhile, clearing of land, rezoning and speculation continue unabated, aided by the States. For instance, the Department of Infrastructure in Victoria provides a mirage of statistical trends that make Victorians believe population growth is inevitable. It prepares barely referenced documents like Challenge Melbourne to encourage the surrender of yet more land to urban developments, with more houses per square meter.

And, like the Kennett Liberal government in Victoria, the Bracks’ Labor government aggressively endorses high immigration and population growth. At the national level, Kim Beazley, Labor Leader of the Opposition, calls for a bigger population, as did Paul Keating, Robert Hawke, and Malcolm Fraser, three of the Prime Ministers between Whitlam and the incumbent John Howard.

Meanwhile in France, no one except the United Nations is talking up population, and France's population is on a course to decline to 1960’s size.

Post-script: It is interesting to note that in 1996 France's external debt was $117.6 billion. That of Australia, with a third the population, was $222 billion in 1999, nearly twice as big. France had net exports of $23.9 billion in 1999 and Australia had net exports of minus $9 billion.