KPMG partner, demographer and social commentator, Bernard Salt, is bullish about Australia’s future.
Speaking at the 2016 Indue Leadership Forum: The Art of Thinking Differently, he said Australia could not be dismissed. It might only have a population of 24 million people, but it is the 13th largest economy in the world, as well as the 4th richest.
This prosperity, he said, had been greatly influenced by China’s rapid urbanisation. Each of the top 20 biggest cities in China are bigger than Melbourne. In fact, China’s biggest city, Shanghai, has 24 million people – the same as Australia’s entire population.
No city on the planet has ever grown by 10 million people in 15 years, except Shanghai and Beijing. “This meant that they have each had to add 700,000 people a year from rural areas. Yet they do not have slums,” said Salt.
That’s because they built apartments for their growing urban populations and needed Australia’s resources, commodities, and energy to do that.
But while the mining investment boom may have come to an end, China’s influence on Australia’s prosperity has not. “We are moving forward in terms of Maslow’s hierarchy,” said Salt.
First, there was the cities, roads, infrastructure and housing. The next wave would be the Chinese middle class’s growing prosperity and its demand for services in areas such as education, lifestyle and tourism.
He cited, for example, an explosion of air links from Wuhan, central China’s most populous city, to tourist destinations in Australia, including Coolangatta on the Gold Coast. Over one million Chinese people visit Australia each year, and Salt expected this to grow rapidly by the mid-2020s.
He also expects Australia to benefit from India’s rising prosperity, which could boost demand for our energy, resources, commodities, space security, lifestyle, health, education and property for perhaps 100 years.
In addition, Salt said Australia would benefit from what he described as the ‘Dubai-effect’ – where rich people from one country chose to live in a city elsewhere because it offers a better lifestyle. This is already happening, as seen with the rising Chinese demand for residential property in cities such as Melbourne and Sydney. Salt anticipated that would continue long into the future, so long as the regulatory environment permitted it.
This too would bolster Australia’s economy. A growing population would ensure more young workers as Australia faced a massive exit of retiring baby boomers from the workforce.
Salt said the rising number of people being added to Australia’s 15 to 64-year-old demographic – who are buying homes and consumer goods, reproducing and paying tax – would be the piston that drives the Australian consumer economy.
In the past, Australia had enjoyed immigration of 100,000 people a year, but since 2010 this has doubled to 200,000 people a year.
As consumers, Salt expected the baby boomers to spend their money on nesting (fixing their homes), traveling (cruises), health, wellness and hips and knee replacements. The concept of ‘reward me now’ would become popular. They will also be volunteering, protesting and joining social movements.
“They are the first generation of retirees that will be educated, articulate and literate, with time on their hands,” said Salt.
“There is every reason to be confident about Australia’s position. We are 24 million people in charge of resources for an entire continent. No other nation on earth has that equation. We are indeed the lucky country.”