(Reuters) – Explosive population growth is shaping as a pivotal issue for Australian elections later this year, with most voters not sharing Prime Minister Kevin Rudd’s preference for a “Big Australia,” a survey showed on Thursday.

World

Major business groups, fearing labor shortages, urged the government to ignore a survey showing two-thirds of Australians did not want the population of 22 million to swell to an expected 36 million by 2050.

“In the wake of a recovering economy, and what we expect to be some global recovery during 2010-11, the likelihood is we will need to increase our skilled migration intake,” said Australian Chamber of Commerce and Industry chief executive Peter Anderson.

Rudd last year backed a bigger Australia after Treasury Department Secretary Ken Henry said current high rates of immigration and childbirth were creating profound economic policy challenges, with population growth of 61 percent seen by 2050.

In contrast, the world population was forecast to grow by only 38 percent over the same period, from 6.8 billion to 9.4 billion, making Australia the world’s fastest growing industrialized country, ahead of even India.

Policy think-tank the Lowy Institute released a survey on Thursday showing that while 72 percent of respondents supported a rise in Australia’s population, almost the same number (69 percent) wanted it clamped below a modest 30 million ceiling.

“Some of the concerns about overcrowding, about house prices, about the environmental strain that 36 million Australians would cause, are also starting to bite,” Lowy Institute executive director Michael Wesley told national radio.

Australia’s economy skirted the worst of the global downturn thanks to high commodity prices, a rush of foreign investment and soaring real estate costs that convinced the Reserve Bank of Australia to start raising interest rates last October, the first major global central bank to do so.

The RBA lifted its key cash rate by another 25 basis points this week to 4.25 percent, its fifth hike in seven months, and more increases are expected as the economy continues to gather strength and price pressures build along with it.

Strong jobs figures on Thursday showed 19,600 extra positions were added in March, holding the jobless rate at 5.3 percent, far below levels in other advanced countries.

The government will in days release a sweeping review of taxation designed to cope with economic and population shifts, and possibly including a controversial new tax on big miners like BHP Billiton and Rio Tinto.

The Business Council of Australia, representing the country’s 100 largest companies, said population was inextricable from continued economic growth, with president Graham Bradley promising to fight any plan to cut immigrant numbers.

Strong population growth would be a boon for property firms like Lend Lease, Stockland and Mirvac, building materials group Boral Ltd and CSR and engineering giant Leighton Holdings, while continued migration would also help ease mining labor shortages.

Rudd’s popularity has stabilized following a fall in recent months, though he remains well ahead in the polls and is favored to win a second term.

But the resurgent opposition, divided internally over whether to support cutting immigration, said the Lowy survey pointed to the need for a debate about population and immigration ahead of elections later this year.

“(Voters) are not prepared to sign up to the level of growth that Kevin Rudd is championing,” conservative immigration spokesman Scott Morrison said.

Immigration and surging asylum seeker numbers have split Australians and helped turn recent national elections, with tough border controls and a military blockade of refugee hopefuls in 2001 propelling conservatives to an unexpected electoral victory.

Newly appointed Population Minister Tony Burke said the government had no firm population target, with the 36 million figure being only a projection based on current policies.

“We continue in the budget each year to take account of the employment needs of the nation and to tailor those figures in a considered way,” Burke told reporters.

(Editing by Michael Perry & Kim Coghill)