"My view that Australia with fewer people would be far more egalitarian, with a higher quality of life and a healthier environment is just another evidence based opinion."
I agree with you. To me, such an Australia not being as wealthy in money terms is an acceptable tradeoff for better long term prospects for the generations of Australians to come.
Besides, we have so much treasure buried in our continent, that if it were shared equitably, it could easily compensate for any economic disparities which might be created by low populations and population densities. In fact, the less people in Australia, the less people to whom to distribute the proceeds of the treasure. :)
