THE first policy a new federal government should dust off when elected next year is ''Big Australia''. The Kevin Rudd initiative aimed at growing Australia's population from 22.3 million to 35 million by 2050.

Within weeks of taking the top job, Julia Gillard scrapped Big Australia realising that few votes would be garnered from the initiative. A combination of xenophobic and anti-growth feeling swelled and that was enough to bin the whole exercise.

The reality is though that without population expansion Australian economic growth will stall, placing pressure on company valuations and the performance of the sharemarket. Live examples of this already exist in Japan, Italy and Greece. Australia needs a demographic policy that involves targeted population growth.

According to the Australian Bureau of Statistics, the economy grew at an annual pace of 3.2 per cent in the 1990s of which 1.5 per cent was contributed by population growth. In the first decade of the new century, the local economy ratcheted up its growth to just under 4 per cent per year of which population growth can be credited with 1.8 per cent.

As is well documented, the Australian population, like many other Western nations, is getting older.