1 00:00:03,750 --> 00:00:06,359 Sean Aylmer: Welcome to the Fear and Greed daily interview. I'm Sean 2 00:00:06,360 --> 00:00:09,959 Sean Aylmer: Aylmer. Late last month, the Australian Bureau of Statistics released 3 00:00:09,960 --> 00:00:14,390 Sean Aylmer: regional population data for June 2021. But what makes this 4 00:00:14,390 --> 00:00:17,419 Sean Aylmer: data different is it's the first to officially reveal how 5 00:00:17,420 --> 00:00:21,710 Sean Aylmer: Australians changed their settlement patterns during the pandemic. There's been 6 00:00:21,710 --> 00:00:23,630 Sean Aylmer: so much talk in the last few years of a 7 00:00:23,630 --> 00:00:27,240 Sean Aylmer: regional boom, but did it really happen? And what about 8 00:00:27,240 --> 00:00:30,960 Sean Aylmer: when life returns to normal? Whatever that is. Whenever we 9 00:00:30,960 --> 00:00:33,260 Sean Aylmer: have questions about population and what it all means for 10 00:00:33,260 --> 00:00:35,740 Sean Aylmer: business and the economy, we go to the man who 11 00:00:35,740 --> 00:00:39,460 Sean Aylmer: knows most, Simon Kuestenmacher. Simon is the co- founder of 12 00:00:39,460 --> 00:00:43,409 Sean Aylmer: The Demographics Group and my guest again this morning. Simon, 13 00:00:43,409 --> 00:00:44,620 Sean Aylmer: welcome back to Fear and Greed. 14 00:00:45,490 --> 00:00:46,300 Simon Kuestenmacher: Great to be back. 15 00:00:46,620 --> 00:00:49,540 Sean Aylmer: You've been traveling. You've been home to Germany since we 16 00:00:49,540 --> 00:00:49,849 Sean Aylmer: last spoke. 17 00:00:50,610 --> 00:00:53,110 Simon Kuestenmacher: Absolutely. It almost feels like things are back to normal. 18 00:00:53,400 --> 00:00:57,310 Simon Kuestenmacher: I've spent my Christmas break in Germany. I've been traveling 19 00:00:57,310 --> 00:01:01,410 Simon Kuestenmacher: like crazy in February and March and up into April. 20 00:01:01,570 --> 00:01:04,709 Simon Kuestenmacher: So at the moment, things feel like at least from 21 00:01:04,709 --> 00:01:07,699 Simon Kuestenmacher: a public speaker's perspective, back to normal. 22 00:01:08,290 --> 00:01:10,130 Sean Aylmer: Ah, that's good. You have been around a bit, because 23 00:01:10,130 --> 00:01:12,310 Sean Aylmer: I have heard you in many different places in the 24 00:01:12,310 --> 00:01:15,009 Sean Aylmer: last couple of months, but let's jump into it. Those 25 00:01:15,010 --> 00:01:19,190 Sean Aylmer: Bureau of Statistics figures, did regional Australia really win out? 26 00:01:19,959 --> 00:01:25,010 Simon Kuestenmacher: Absolutely. The shift has been clearer than ever before. Regional 27 00:01:25,010 --> 00:01:29,010 Simon Kuestenmacher: Australia is the big winner of the internal population reshuffle 28 00:01:29,060 --> 00:01:33,770 Simon Kuestenmacher: within Australia, and within regional Australia, things are not created 29 00:01:33,770 --> 00:01:37,290 Simon Kuestenmacher: equal. It is those regional areas that are within the 30 00:01:37,290 --> 00:01:41,640 Simon Kuestenmacher: gravitational pull of a major CBD that benefit the most. 31 00:01:41,860 --> 00:01:45,950 Simon Kuestenmacher: These are your Gold Coasts, your Sunshine Coast and Geelong. 32 00:01:45,950 --> 00:01:48,570 Simon Kuestenmacher: These would be the three biggest winners. Another big winner 33 00:01:48,810 --> 00:01:52,070 Simon Kuestenmacher: is Newcastle. But you see already that we are not talking about 34 00:01:52,290 --> 00:01:56,980 Simon Kuestenmacher: small, tiny settlements here. We're talking about decent- sized cities 35 00:01:57,250 --> 00:02:02,620 Simon Kuestenmacher: with big infrastructure that are connected to the next biggest 36 00:02:02,650 --> 00:02:06,690 Simon Kuestenmacher: CBD. Essentially they are connected to the capital city of 37 00:02:06,690 --> 00:02:09,930 Simon Kuestenmacher: the state in some sort of meaningful fashion. 38 00:02:10,750 --> 00:02:16,150 Sean Aylmer: Okay. What's that mean for those regions? Geelong, Newcastle, Gold 39 00:02:16,150 --> 00:02:20,590 Sean Aylmer: coast, Sunshine Coast? It will put more pressure on everything 40 00:02:20,590 --> 00:02:24,639 Sean Aylmer: within those regions, from infrastructure through to the economy, shopping, 41 00:02:24,980 --> 00:02:27,100 Sean Aylmer: schools, hospitals, all that sort of thing. 42 00:02:27,880 --> 00:02:31,330 Simon Kuestenmacher: Absolutely. So first and foremost, we have to say, well, 43 00:02:31,330 --> 00:02:33,970 Simon Kuestenmacher: there are wonderful opportunities out there to grow those regions 44 00:02:34,660 --> 00:02:37,830 Simon Kuestenmacher: to make them into more exciting places. But there's also 45 00:02:37,830 --> 00:02:41,550 Simon Kuestenmacher: the risk that a Sunshine Coast, a Gold Coast, a Geelong, a 46 00:02:42,240 --> 00:02:46,380 Simon Kuestenmacher: Newcastle following the footsteps of let's say Melbourne's west where, 47 00:02:46,380 --> 00:02:50,350 Simon Kuestenmacher: over the last decade or two, we allowed population growth 48 00:02:50,650 --> 00:02:55,239 Simon Kuestenmacher: to outpace infrastructure growth. Remember that there is no magical 49 00:02:55,240 --> 00:02:58,919 Simon Kuestenmacher: number where we say a city gets too big. That 50 00:02:58,919 --> 00:03:01,609 Simon Kuestenmacher: doesn't happen. A city is never too big. There's only 51 00:03:01,610 --> 00:03:05,630 Simon Kuestenmacher: ever a lack of infrastructure, inadequate infrastructure. Infrastructure is not 52 00:03:05,630 --> 00:03:10,870 Simon Kuestenmacher: just rails and roads. It also includes hospitals, schools, all 53 00:03:10,870 --> 00:03:14,850 Simon Kuestenmacher: kind of social infrastructure. Is there enough green space being 54 00:03:14,850 --> 00:03:19,390 Simon Kuestenmacher: developed in those new population settlements, where we talk about greenfield development sites 55 00:03:19,970 --> 00:03:22,260 Simon Kuestenmacher: on the urban fringe, for example. So we must not 56 00:03:22,690 --> 00:03:26,179 Simon Kuestenmacher: repeat those mistakes. The couple of problems there though, is 57 00:03:26,180 --> 00:03:29,320 Simon Kuestenmacher: that if you grow population at scale and at high 58 00:03:29,320 --> 00:03:32,250 Simon Kuestenmacher: pace in a certain region, you just need to provide 59 00:03:32,250 --> 00:03:34,970 Simon Kuestenmacher: housing as fast as possible. And housing tends to be 60 00:03:34,970 --> 00:03:40,610 Simon Kuestenmacher: provided by the very quick and responsive private sector. Whereas 61 00:03:40,660 --> 00:03:45,610 Simon Kuestenmacher: infrastructure gets to be developed by a not so responsive, 62 00:03:45,610 --> 00:03:49,730 Simon Kuestenmacher: not quite so fast public sector. So therefore you constantly 63 00:03:49,730 --> 00:03:55,730 Simon Kuestenmacher: create an environment where infrastructure development follows population growth. And 64 00:03:55,730 --> 00:03:59,700 Simon Kuestenmacher: that is a bit of a problem because the more infrastructure is 65 00:03:59,700 --> 00:04:03,810 Simon Kuestenmacher: built into existing, already settled areas of the city, the 66 00:04:03,810 --> 00:04:07,490 Simon Kuestenmacher: more expensive it gets. So it would really be nice to use 67 00:04:07,490 --> 00:04:10,170 Simon Kuestenmacher: a build- it- and- they- will- come approach, where we 68 00:04:10,170 --> 00:04:12,940 Simon Kuestenmacher: plan and say, " In this neck of the woods, there 69 00:04:12,940 --> 00:04:15,330 Simon Kuestenmacher: will be the population in 10 years time. So we 70 00:04:15,330 --> 00:04:19,180 Simon Kuestenmacher: will build rails and roads there." The problem is that 71 00:04:19,180 --> 00:04:23,950 Simon Kuestenmacher: the voters of already existing areas where there is a shortfall of 72 00:04:23,950 --> 00:04:28,929 Simon Kuestenmacher: infrastructure, they would actually kill that politician. Figuratively speaking, thank God. 73 00:04:29,410 --> 00:04:33,560 Sean Aylmer: Yeah. Yeah. So, okay, what's this mean for our cities and particularly 74 00:04:33,560 --> 00:04:39,760 Sean Aylmer: our city centers? Certainly Melbourne and Sydney CBDs are getting 75 00:04:39,760 --> 00:04:43,470 Sean Aylmer: better, but they're not back where I were. What happens 76 00:04:43,470 --> 00:04:44,589 Sean Aylmer: to CBDs, do you think? 77 00:04:45,040 --> 00:04:48,409 Simon Kuestenmacher: Exactly. So I can speak freely and without any pressure, 78 00:04:48,410 --> 00:04:51,560 Simon Kuestenmacher: because I don't have billions of dollars invested into CBD 79 00:04:51,560 --> 00:04:55,270 Simon Kuestenmacher: towers. In the long run, the CBD will just be 80 00:04:55,270 --> 00:04:58,120 Simon Kuestenmacher: fine. There's no worries. The CBD will, in the long 81 00:04:58,120 --> 00:05:04,260 Simon Kuestenmacher: run, grow and outgrow its former pre COVID size, simply 82 00:05:04,260 --> 00:05:07,400 Simon Kuestenmacher: because a city like Melbourne goes from five million people 83 00:05:07,400 --> 00:05:10,740 Simon Kuestenmacher: to seven million people. Even if a much smaller share 84 00:05:10,740 --> 00:05:13,520 Simon Kuestenmacher: of the workforce is working in the CBD on any given 85 00:05:13,520 --> 00:05:16,410 Simon Kuestenmacher: day, sooner or later, as you grow a city, it 86 00:05:16,410 --> 00:05:19,179 Simon Kuestenmacher: will fill up again. So that's all right for the 87 00:05:19,180 --> 00:05:22,480 Simon Kuestenmacher: CBD. So there is no major long- term structural problem 88 00:05:22,650 --> 00:05:25,180 Simon Kuestenmacher: with the CBD. But I do think we need to 89 00:05:25,410 --> 00:05:29,650 Simon Kuestenmacher: completely rethink our interactions with the CBD. What I don't 90 00:05:29,650 --> 00:05:32,430 Simon Kuestenmacher: want to see in the future ever again, is walking 91 00:05:32,430 --> 00:05:35,190 Simon Kuestenmacher: into a big office tower in the CBD, and I'm 92 00:05:35,190 --> 00:05:39,719 Simon Kuestenmacher: seeing people with noise- canceling headphones, hunched over their laptops. 93 00:05:40,020 --> 00:05:42,510 Simon Kuestenmacher: That's a nightmare. There's no reason for this worker to 94 00:05:42,510 --> 00:05:46,420 Simon Kuestenmacher: do this task in the CBD. They might have well missed 95 00:05:46,420 --> 00:05:48,609 Simon Kuestenmacher: out on the commute and spent a bit more time 96 00:05:48,610 --> 00:05:52,010 Simon Kuestenmacher: sleeping, a bit more time with the kids, and be 97 00:05:52,010 --> 00:05:55,560 Simon Kuestenmacher: hunched over their laptop at home. But I want people 98 00:05:55,560 --> 00:06:00,600 Simon Kuestenmacher: for all those tasks that really require interpersonal connection, collaborative, 99 00:06:01,910 --> 00:06:05,460 Simon Kuestenmacher: creative work, these kind of jobs, I want people to 100 00:06:05,460 --> 00:06:09,270 Simon Kuestenmacher: commute into the city because work is done best, at 101 00:06:09,270 --> 00:06:12,570 Simon Kuestenmacher: least these work tasks are best done in person. So 102 00:06:12,570 --> 00:06:17,370 Simon Kuestenmacher: in my ideal utopian CBD, workers would do all their 103 00:06:17,370 --> 00:06:21,310 Simon Kuestenmacher: private thinking kind of work, they would do those at home, 104 00:06:21,520 --> 00:06:24,700 Simon Kuestenmacher: and they would do the collaborative tasks in the city. 105 00:06:24,700 --> 00:06:27,190 Simon Kuestenmacher: So that means if you really think this through, just 106 00:06:27,190 --> 00:06:29,529 Simon Kuestenmacher: imagine how exciting a CBD would look like. It would 107 00:06:29,529 --> 00:06:33,539 Simon Kuestenmacher: be a raucous, interactive CBD, where people mingle, where people 108 00:06:33,540 --> 00:06:35,830 Simon Kuestenmacher: are out and about, where it's much more hustle and 109 00:06:35,830 --> 00:06:38,820 Simon Kuestenmacher: bustle in the CBD. That would be great fun to 110 00:06:38,820 --> 00:06:40,219 Simon Kuestenmacher: be working in such an environment. 111 00:06:40,520 --> 00:06:43,690 Sean Aylmer: That's a hybrid environment though. So people spend two or 112 00:06:43,690 --> 00:06:46,100 Sean Aylmer: three days a week when they need to collaborate in 113 00:06:46,100 --> 00:06:48,390 Sean Aylmer: the office in the CBD, and two or three days a 114 00:06:48,390 --> 00:06:49,869 Sean Aylmer: week when they don't, at home. 115 00:06:50,360 --> 00:06:53,190 Simon Kuestenmacher: Exactly. We are very much seeing that the hybrid work 116 00:06:53,190 --> 00:06:56,470 Simon Kuestenmacher: approach in my opinion will be the dominant way of 117 00:06:56,470 --> 00:07:00,529 Simon Kuestenmacher: work, simply because we're seeing this replicated or mirrored in 118 00:07:00,529 --> 00:07:03,549 Simon Kuestenmacher: the settlement patterns at the moment. In Melbourne, for example, 119 00:07:03,730 --> 00:07:07,820 Simon Kuestenmacher: the population in the CBD and near the Monash- Clayton 120 00:07:08,200 --> 00:07:12,710 Simon Kuestenmacher: knowledge center, they lost population like crazy. But the regions 121 00:07:12,710 --> 00:07:16,730 Simon Kuestenmacher: that gained population, they are the urban fringe regions of 122 00:07:16,730 --> 00:07:19,990 Simon Kuestenmacher: Melbourne in the city of Whittlesea, out in Melton. So 123 00:07:20,820 --> 00:07:24,830 Simon Kuestenmacher: it's almost like an industrial ring that spans Melbourne with 124 00:07:24,860 --> 00:07:29,410 Simon Kuestenmacher: cheap housing and industrial sites that have been growing in 125 00:07:29,760 --> 00:07:33,110 Simon Kuestenmacher: attraction because we are doubling down on manufacturing in Australia. 126 00:07:33,540 --> 00:07:36,760 Simon Kuestenmacher: So this is where the manufacturing jobs are located. So 127 00:07:36,760 --> 00:07:41,640 Simon Kuestenmacher: therefore the hybrid work approach will be the dominant pattern, 128 00:07:41,790 --> 00:07:44,350 Simon Kuestenmacher: but it also means that you can't move to a 129 00:07:44,350 --> 00:07:46,910 Simon Kuestenmacher: regional city that is three, four hours away from the 130 00:07:46,910 --> 00:07:50,310 Simon Kuestenmacher: CBD. You need to stay, you need to remain within 131 00:07:50,310 --> 00:07:53,300 Simon Kuestenmacher: the gravitational pull, let's say within a two- hour radius 132 00:07:53,550 --> 00:07:56,320 Simon Kuestenmacher: of the CBD so that you can travel to the 133 00:07:56,320 --> 00:07:59,150 Simon Kuestenmacher: CBD, even if it's a very annoying and long commute, 134 00:07:59,150 --> 00:08:02,300 Simon Kuestenmacher: you can do it, if it is really, really required. 135 00:08:02,820 --> 00:08:04,470 Sean Aylmer: Stay with me, Simon, we'll be back in a minute. 136 00:08:10,310 --> 00:08:14,150 Sean Aylmer: My guest this morning is Simon Kuestenmacher, co- founder of The Demographics 137 00:08:14,150 --> 00:08:18,730 Sean Aylmer: Group. Okay. So we've seen these changes now occurring. Do 138 00:08:18,730 --> 00:08:21,460 Sean Aylmer: you think in 10 years, Geelong, the Gold Coast, the 139 00:08:21,460 --> 00:08:25,080 Sean Aylmer: Sunshine Coast and Newcastle in New South Wales will be 140 00:08:25,080 --> 00:08:29,160 Sean Aylmer: significantly larger cities? Do you think the trend will continue? 141 00:08:30,350 --> 00:08:35,100 Simon Kuestenmacher: I think absolutely yes. Simply because in 10 years time, 142 00:08:35,100 --> 00:08:38,100 Simon Kuestenmacher: we'll have about three and a half million more people living 143 00:08:38,100 --> 00:08:40,540 Simon Kuestenmacher: in Australia. Where do you want to put those three 144 00:08:40,540 --> 00:08:44,420 Simon Kuestenmacher: and a half million new, additional Australians? That's the question that 145 00:08:44,540 --> 00:08:48,210 Simon Kuestenmacher: honestly needs to be answered. And it all speaks in 146 00:08:48,210 --> 00:08:53,270 Simon Kuestenmacher: favor of those cities where livability and housing affordability is 147 00:08:53,270 --> 00:08:56,470 Simon Kuestenmacher: higher, which is why everyone's bet on the Gold Coast 148 00:08:56,540 --> 00:08:59,660 Simon Kuestenmacher: and Sunshine Coast are right, actually, at the moment. These 149 00:08:59,660 --> 00:09:03,490 Simon Kuestenmacher: will be two big beneficiaries. Then of course, Geelong. Geelong 150 00:09:03,490 --> 00:09:07,420 Simon Kuestenmacher: isn't necessarily considered a wonderful lifestyle area within Australia, but 151 00:09:07,420 --> 00:09:10,760 Simon Kuestenmacher: it is a cheap, affordable city in the vicinity of 152 00:09:10,760 --> 00:09:15,040 Simon Kuestenmacher: Melbourne. And there're, of course, wonderful areas in close distance to 153 00:09:15,179 --> 00:09:19,579 Simon Kuestenmacher: Geelong. So that will play itself out just fine. And 154 00:09:19,580 --> 00:09:22,319 Simon Kuestenmacher: we do need to think of improving new cities. If 155 00:09:22,320 --> 00:09:25,100 Simon Kuestenmacher: you really think this through, even longer term, and you say, " 156 00:09:25,100 --> 00:09:27,439 Simon Kuestenmacher: Well, Australia will double in size in the next 50 157 00:09:27,440 --> 00:09:32,630 Simon Kuestenmacher: years. 50 million Australians and another 25 million Australians, where 158 00:09:32,630 --> 00:09:35,209 Simon Kuestenmacher: do we want to put them? There's one approach that 159 00:09:35,210 --> 00:09:39,199 Simon Kuestenmacher: would say every Australian city needs to double in size. That's one 160 00:09:39,200 --> 00:09:42,210 Simon Kuestenmacher: way of doubling the population. I think we need to think 161 00:09:42,210 --> 00:09:46,170 Simon Kuestenmacher: about this more strategically. Is there a potential in Western 162 00:09:46,170 --> 00:09:53,190 Simon Kuestenmacher: Australia to create a second sizeable city? Essentially go to 163 00:09:53,480 --> 00:09:57,760 Simon Kuestenmacher: Cairns and draw a west- east line of Australia and 164 00:09:57,760 --> 00:10:01,540 Simon Kuestenmacher: everything above, call that Northern Australia. There's basically no one 165 00:10:01,540 --> 00:10:04,929 Simon Kuestenmacher: living in Northern Australia. Shouldn't there be bigger cities in 166 00:10:04,929 --> 00:10:07,699 Simon Kuestenmacher: Northern Australia? Darwin should at least be a million people. 167 00:10:08,400 --> 00:10:13,900 Simon Kuestenmacher: Cairns, Townsville, those cities can easily quadruple in size. If 168 00:10:13,900 --> 00:10:16,100 Simon Kuestenmacher: you really think this through what Australia should be a 169 00:10:16,360 --> 00:10:18,969 Simon Kuestenmacher: like in 50 years time. So we need to completely 170 00:10:18,970 --> 00:10:23,170 Simon Kuestenmacher: rethink the way that we structure, redistribute our population within Australia. 171 00:10:23,500 --> 00:10:26,880 Simon Kuestenmacher: Nobody's having this discussion. And you can see in Melbourne, 172 00:10:27,150 --> 00:10:30,069 Simon Kuestenmacher: the problems that we created, because we were scared of 173 00:10:30,070 --> 00:10:33,569 Simon Kuestenmacher: talking about big Australia. The big Australia discussion really started 174 00:10:33,570 --> 00:10:36,380 Simon Kuestenmacher: in around 2008, height of the mining boom. It was 175 00:10:36,380 --> 00:10:40,500 Simon Kuestenmacher: the record intake off migrants into the country when 300, 000 176 00:10:40,500 --> 00:10:44,319 Simon Kuestenmacher: migrants, myself included, by the way, arrived in Australia. And 177 00:10:44,460 --> 00:10:49,870 Simon Kuestenmacher: just from 2008 to 2018, Melbourne grew by one Adelaide, by 1. 178 00:10:49,870 --> 00:10:54,679 Simon Kuestenmacher: 3 million people. Nobody was taking this into account. And 179 00:10:54,679 --> 00:10:57,349 Simon Kuestenmacher: if somebody had told you this in 2008, that Melbourne will 180 00:10:57,350 --> 00:11:02,190 Simon Kuestenmacher: grow by one Adelaide, people would've been outraged and said, " 181 00:11:02,190 --> 00:11:05,190 Simon Kuestenmacher: Oh, we need to really, really heavily invest into infrastructure." 182 00:11:05,600 --> 00:11:08,839 Simon Kuestenmacher: So we kind of just dabbled in infrastructure, small scale 183 00:11:08,840 --> 00:11:12,229 Simon Kuestenmacher: stuff for a decade and a half. And that is 184 00:11:12,230 --> 00:11:15,690 Simon Kuestenmacher: a nightmare. If we are growing our population, and we 185 00:11:15,690 --> 00:11:19,230 Simon Kuestenmacher: will grow our population, and no politicians should be pretending 186 00:11:19,230 --> 00:11:21,929 Simon Kuestenmacher: that we're not growing our population, then you need to 187 00:11:21,929 --> 00:11:24,230 Simon Kuestenmacher: build infrastructure. You need it big. The good news though, 188 00:11:24,230 --> 00:11:27,100 Simon Kuestenmacher: is that all the budgets, the federal budget, the state 189 00:11:27,100 --> 00:11:30,900 Simon Kuestenmacher: budgets, they all put money aside, big chunks of money, 190 00:11:31,140 --> 00:11:35,429 Simon Kuestenmacher: to invest into infrastructure. That's great news. The only problem 191 00:11:35,429 --> 00:11:37,630 Simon Kuestenmacher: is that at the moment, there's no way we have 192 00:11:37,630 --> 00:11:40,679 Simon Kuestenmacher: all the workers available to build the stuff that we 193 00:11:40,679 --> 00:11:44,480 Simon Kuestenmacher: are willing to pay for. Geelong operates at 2. 3% 194 00:11:44,480 --> 00:11:48,730 Simon Kuestenmacher: unemployment at the moment. Good luck finding the workers for 195 00:11:48,730 --> 00:11:50,250 Simon Kuestenmacher: local major projects there. 196 00:11:51,370 --> 00:11:55,510 Sean Aylmer: The implications of it are enormous. Particularly if we don't 197 00:11:55,510 --> 00:11:58,970 Sean Aylmer: go down... I mean, China, US, these massive countries with 198 00:11:58,970 --> 00:12:03,449 Sean Aylmer: massive, diverse weather systems and that, not dissimilar to Australia, they 199 00:12:03,450 --> 00:12:08,880 Sean Aylmer: have big cities dotted throughout the land. Now, if Australia 200 00:12:08,880 --> 00:12:11,980 Sean Aylmer: doesn't do that and we stick with putting a new 201 00:12:11,980 --> 00:12:14,540 Sean Aylmer: Adelaide in Melbourne every 12 years or so, we're going 202 00:12:14,690 --> 00:12:17,320 Sean Aylmer: to have all sorts of challenges, shall we say. 203 00:12:18,420 --> 00:12:23,360 Simon Kuestenmacher: Exactly. So you do see that in the general pattern of Australian capital 204 00:12:23,360 --> 00:12:26,949 Simon Kuestenmacher: cities is always the same. You have a single CBD, 205 00:12:26,950 --> 00:12:31,140 Simon Kuestenmacher: a single major employment center, and then you have population 206 00:12:31,170 --> 00:12:34,620 Simon Kuestenmacher: clustered around that major employment center as near as possible. 207 00:12:34,620 --> 00:12:37,329 Simon Kuestenmacher: Everybody wants to avoid the soul- destroying commute, so they 208 00:12:37,400 --> 00:12:40,370 Simon Kuestenmacher: pay a premium to live close to the CBD. And 209 00:12:40,370 --> 00:12:43,330 Simon Kuestenmacher: therefore the rich people, roughly speaking, live close to the 210 00:12:43,330 --> 00:12:46,750 Simon Kuestenmacher: CBD, the poor people live far away from the CBD. And 211 00:12:46,750 --> 00:12:49,480 Simon Kuestenmacher: then at the morning, everybody commutes into the city. At 212 00:12:49,480 --> 00:12:51,140 Simon Kuestenmacher: the nighttime, they all commute out of the city, in 213 00:12:51,140 --> 00:12:54,850 Simon Kuestenmacher: a star- shaped pattern. That is literally the most difficult 214 00:12:55,150 --> 00:12:57,620 Simon Kuestenmacher: way of managing a traffic system. So you want to 215 00:12:57,620 --> 00:13:01,699 Simon Kuestenmacher: avoid this. Once a city reaches a certain size, it 216 00:13:01,700 --> 00:13:04,500 Simon Kuestenmacher: is maybe four million, four and half million, there's no 217 00:13:04,500 --> 00:13:08,280 Simon Kuestenmacher: specific real answer here, then the single CBD model doesn't 218 00:13:08,280 --> 00:13:12,069 Simon Kuestenmacher: work at all. All the local town planners know this, 219 00:13:12,270 --> 00:13:16,309 Simon Kuestenmacher: and they all write in their reports to their strategic 220 00:13:16,309 --> 00:13:19,550 Simon Kuestenmacher: plans, they write secondary employment hubs, meaning that you have 221 00:13:19,550 --> 00:13:22,410 Simon Kuestenmacher: a CBD, but then you have secondary CBDs in a 222 00:13:22,840 --> 00:13:26,609 Simon Kuestenmacher: circular fashion around the CBD. That is meant to take away 223 00:13:26,610 --> 00:13:29,510 Simon Kuestenmacher: house price pressure from the center and distribute it more 224 00:13:29,510 --> 00:13:33,959 Simon Kuestenmacher: evenly across the urban canvas. The only problem with those 225 00:13:33,960 --> 00:13:36,590 Simon Kuestenmacher: secondary CBDs is for this hub and spoke system to 226 00:13:36,590 --> 00:13:41,230 Simon Kuestenmacher: work, these CBDs all need to be really well interconnected. 227 00:13:41,559 --> 00:13:44,439 Simon Kuestenmacher: So that means you need to have suburban rail loops 228 00:13:44,440 --> 00:13:47,170 Simon Kuestenmacher: that connect all the CBDs in a circular fashion. You need 229 00:13:47,170 --> 00:13:50,090 Simon Kuestenmacher: to have zig- zaggy connections between all of those hubs. And 230 00:13:50,090 --> 00:13:51,809 Simon Kuestenmacher: we are not doing this at the moment. And of course, 231 00:13:51,809 --> 00:13:55,110 Simon Kuestenmacher: building them into an existing city like Melbourne as an 232 00:13:55,110 --> 00:13:57,850 Simon Kuestenmacher: afterthought is freakishly expensive. 233 00:13:58,380 --> 00:14:00,329 Sean Aylmer: Simon, thank you for talking to Fear and Greed. 234 00:14:00,850 --> 00:14:01,670 Simon Kuestenmacher: Ah, my pleasure. 235 00:14:02,100 --> 00:14:05,230 Sean Aylmer: That was Simon Kuestenmacher, co- founder of The Demographics Group. 236 00:14:05,559 --> 00:14:08,010 Sean Aylmer: This is the Fear and Greed daily interview. Join us 237 00:14:08,010 --> 00:14:10,500 Sean Aylmer: every morning for the full episode of Fear and Greed, 238 00:14:10,500 --> 00:14:14,720 Sean Aylmer: Australia's most popular business podcast. I'm Sean Aylmer. Enjoy your day.