The size of Tasmania's population has always been a subject of much discussion, as it is this week given the release of the ABS Australian Demographic Statistics which reported an annual population growth rate of 0.1 per cent for Tasmania, compared with the Australian rate of 1.8 per cent.

It is often easy to get fixated on short term population movements such as Net Interstate Migration (NIM) which is highly influenced by economic performance, yet the structural changes taking place in Tasmania's population warrant a longer term approach. 

Population change is influenced by three factors; natural increase (births minus deaths), Net Overseas Migration (NOM) and Net Interstate Migration (NIM).  However, it is the complex interaction of all three which influence the composition of Tasmania's population and its potential for growth over the longer term.  See the below chart.

NIM is the most volatile of the components and has the greatest impact on the age structure, or composition, of the population.  Traditionally, the state experiences net losses in the younger, working, studying and reproducing age groups and net gains in the very young and older ages. The movements are further influenced by the economic conditions at the time. 

The measure of NOM was changed by the ABS in 2009 to include all those people who have lived in the State for 12 out of the previous 16 months.  Included in the arrivals are long stays (those on business, skilled, family or humanitarian visas) and short stays (those on 457, student or working holiday visas).  This measure is helpful from an Estimated Resident Population (ERP) perspective and in planning for and providing appropriate infrastructure and services for the (current) population. However, in undertaking longer term projections and associated planning efforts it is less helpful as it assumes arrivals (and departures) are permanent and assigns them the same demographic assumptions as the resident population (ie fertility rates and life expectancy etc) for future projections. 

Historically, natural increase has been positive, however, the rate of increase is declining.  This is due to NIM movements, that is the increasing proportion of older people eventually resulting in an increase in the death rate, and the declining number of women in the reproducing age cohort resulting in a decline in the number of births (see my blog post on Tasmania's Vital Index for more information).

Combined, the impact on Tasmania's population means that the propensity for population growth is declining.  That is, population growth is projected to continue, but at a diminishing rate. 

In order to stabilise the population growth rate, (or more importantly influence the age structure and composition of the population) a more strategic effort beyond relying on a return to strong economic performance and investment attraction is required. 

Tasmania's Department of Treasury and Finance recently released their population projections for Tasmania, projecting that under the medium series, Tasmania's population will grow by 78,000 people in the next 50 years. 

Population projections are not forecasts, they are projections based on a combination of assumptions in relation to fertility rates, mortality (life expectancy) rates and migration (both interstate and international).  These assumptions are usually based on historical trends. 

The accuracy of population projections is dependent on the method employed.  This is particularly important in Tasmania's case.  The changes in Tasmania's population do not follow 'normal' patterns compared with Australia or other Australian states and therefore projections are very difficult to undertake. 

Since 1981, Tasmania's population has grown by around 85,000 people - a growth of almost 20 per cent, or 0.7 per annum (see below chart).  This growth occurred for a number of reasons.  The reasons also contribute to why this rate of growth is unlikely to continue.  The growth was primarily driven by natural increase (more births than deaths) which resulted from the large cohort of baby boomers (those born 1945 to 1965) reaching reproduction age.  Population growth was complemented by increases in interstate and international migration during periods of economic growth.

Tasmania's current and future population is highly influenced by the potential for reproduction and the age of migrants.  While fertility rates may remain around replacement level (2.1 births per woman over her lifetime), the actual number of births achieved is dependent upon the size of the reproductive cohort (i.e. those women of childbearing age).  In Tasmania, this cohort is decreasing in size; due to declining fertility rates since the baby boom and also net migration losses in the childbearing ages. 

The risk in undertaking population projections is not accounting for the size of the reproductive cohort and the migration movements which impact on the size of this cohort.  If current and historic migration trends continue,  the size of the cohort will continue to decline.  Even if the fertility rate remains constant, the actual number of births will decrease. 

In sum, using historical trends to inform future patterns is problematic for all jurisdictions, but particularly so for Tasmania.  This is exacerbated by not accounting for the age of migrants.