Australia is growing by a person every 87 seconds (net). This demographic dynamic relentlessly reshapes the demand for our national software and hardware.
The software is services such as healthcare, education, shelter, food, water, energy and connectivity.
The hardware is the hospital beds, classrooms, homes, dams and water pipes, power stations and transmission lines, roads and public transport (to name a few) needed to deliver software services.
In short, the hardware is Australia’s built environment.
Surely someone has calculated how much extra software and hardware Australia needs to service a growing nation?
The Property Council scoured the land for a program that did these calcs. We asked academics, Treasury departments, the Productivity Commission, even the Council of Australian Governments (COAG).
We ended up empty handed.
Sure, there are answers to bits and pieces of the demand puzzle lying about the place. Indeed some tools, like transport demand models, are sophisticated and powerful.
But there’s no single program in the public domain that directly converts population growth into forecasts of hardware demand.
So, at the risk of antagonising dozens of experts, we asked the respected Allen Consulting Group (ACG) to take a crack at the task.
We asked them to devise a nation building app that anyone could download on an iPad. Not only did we want them to predict Australia’s population for each of the next 40 years, we also asked them to forecast where Australians would live.
As of today, the ACG app covers 41 cities and towns across the nation.
Given the importance of immigration, the app also provides a sensitivity slider that lets users plug in different immigration levels.
The app is now in beta testing. Here’s what it predicts for all 41 locales for each year between 2010 and 2050:
Housing demand indicators
- Number of households
- Total number of new dwellings
- Occupied detached dwellings
- Occupied multi-unit dwellings
- Total private dwellings
Social hardware demand indicators
- Hospital separations: the number of people leaving hospital – one way or another
- Hospital beds
- Retirement village population
- Aged care places
- Child care places
Core staples demand indicators
Private sector hardware demand indicators
- Retail space
- Office space
- Car travel
Policy indicators
- Dependency ratios – seniors
- Dependency ratios – total
- Number of taxpayers
- Taxpayer burden per capita (Australia only)
ACG is also pondering how to build a module that will credibly predict the cost of constructing hardware by indicator and locale.
The app will give users total control. You can ask to see forecasts for all indicators by a particular locale or even compare two cities.
The app also generates league tables of winners and losers, for instance:
- Which city populations are growing the fastest? Answer: Gold Coast/Tweed, Mandurah, Bunbury and Hervey Bay
- Which cities are shrinking? Answer: Dubbo and Orange
- Which capital city has the fastest growing retail space market? Answer: Perth
- What cities have the highest ratio of workers to seniors? Answer: Kalgoorlie, Darwin, Gladstone, Cairns and Townsville
- Which city has the highest ratio of retirees to workers? Answer: Port Macquarie
- Which capital cities have the fastest growing school population? Answer: Brisbane and Melbourne
- Which capital city has the fastest growing aged care market by number of places? Answer: Melbourne
- What about by rate of growth? Answer: Darwin, then Canberra
Of course, a model is only as good as its assumptions. That’s why ACG has made all the assumptions transparent.
The model can’t predict improvements in technology, the impact of price feedback loops on demand and supply, trends in divorces, the weather or kids returning to the nest.
We freely admit that a small change in an assumption, such as the average number of people living in households, can knock the numbers around.
We expect the model will evolve in its sophistication and look forward to the comments of Property Council members and experts alike. If anyone wants to modify the open source methodology or add more cities they can contact us – please have your cheque book open.
The Property Council commissioned this app to underline a simple point: “demography is destiny”, so we should start planning now.
When August Comte coined the phrase in the early 19th century he was saying that changes in birth rates work themselves out over decades – they flow through to every dimension of society. Comte’s insight holds true to this day.
Each additional Australian is a producer (eventually) of economic value and a consumer of products and services.
Their decisions, habits and needs result in what we’ve called software and hardware.
The Property Council’s nation building app makes the case for long-term planning and infrastructure investment more powerfully than a thousand policy submissions.
A sneak preview of the app will be provided to attendees of the Property Council’s Cities Summit, to be held on May 5, 2011 in Melbourne.
Peter Verwer |
Friday, 1 April 2011 9:35 AM |
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