Simon Kuestenmacher Podcast

In this episode, we talk with Simon Kuestenmacher from the Demographics group about what Australia and the world will look like over the next 5, 10 and 50 years. We talk about the sustainability of living in concentrated cities, the impact artificial intelligence will have on the workforce, the future of property prices in the major cities and the likely hood of geopolitical tensions escalating globally.

Simon and Bernard Salt co-founded The Demographics Group in 2017. The group provides specialist advice on demographic, consumer, and social trends for business. Simon has presented to numerous corporate and industry audiences across Australia and overseas on demographic trends, consumer insights and cultural change in Australia.  His presentations and quirky observations are enjoyed by groups from the financial services, property, government, education, technology, retail, and professional services industries, among others.

Simon is a columnist for The New Daily newspaper and a contributor to The Australian newspaper and he is a media commentator on demographic and data matters. Simon has amassed 300,000  global followers on social media, reaches over 25 million people every month and ranks as one of the world’s Top 10 influencers in data visualisation. If you can’t get enough data that explains how the world works, make sure to follow him on Twitter or any of his other social channels.

If you would like to engage Simon or Bernard directly you can reach them here: The Demographics Group - Insights In Demography (tdgp.com.au)

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Tim Whybourne: [00:00:00] It is with great pleasure today that I introduce Simon Kuson Ma. Simon is director and co-founder of the Demographics Group based in Melbourne, Australia. Simon hold degrees in geography from leading universities in Berlin and Melbourne, and worked for several years as a business consultant with KPMG Australia in 2017.

Tim Whybourne: Simon, co-founder of the Demographics Group with Bernard Salt. The group provides special advice on demographic, consumer, and social trends for business. Simon has presented to numerous corporate and industry audiences across Australia and overseas on demographic trends, consumer insights, and cultural change in Australia.

Tim Whybourne: Simon is a columnist for the News Daily newspaper and a contributor to the Australian newspaper. He's a media commentator on demographic and data matters. Simon has amassed 300,000 global followers on social media, reaches over 25 million people every month and ranks as one of the world's top 10 influencers in data visualization.

Tim Whybourne: Simon has amassed three books on maps and runs the world's largest Twitter account dedicated to maps and data. I first had the [00:01:00] pleasure of hearing Simon speak an industry event towards the end of a long day of speakers. This is usually a tough spot to fill, but Simon had the room absolutely engaged in the talk, which has stuck with me since, hence why I reached out to Simon to appear on the podcast.

Tim Whybourne: So thank you Simon, for accepting our invitation. I know your time is in demand, so it really is an honor to have you here today. 

Simon Kuestenmacher: Big pleasure. Always happy to chat. Demographics. 

Tim Whybourne: So I thought that the best place to start was hard anywhere is at the beginning. So if you can tell me about yourself, where you grew up, and how you landed in Australia.

Simon Kuestenmacher: Yeah, well, so I grew up in, in Germany and went to a school there started my university career. They always enjoyed travel as a young teenager. And, my parents let me go loose early on. So I was happy to just travel alone through Europe or with a couple of friends. And then when it was time at university, I stumbled across, didn't really know what to do with my life, so just studied geography because it sounded fun.

Simon Kuestenmacher: And then started studying abroad in the United States. And then eventually by [00:02:00] sheer accident came to Melbourne for a single semester of university. That was the plan in 2008. And then ran into a girl and then just decided that it might be nice to stick around for a little bit longer.

Simon Kuestenmacher: And I've been here ever since. So it's just that simple. Life didn't really. It didn't contain a big plan. You just go along and all of a sudden you end up on the other side of the planet. And then the professional career slowly moved from a stock standard data analyst to me, finding or just seeing a job advertised for K p KPMG demographics back in the day, that was run by Bernard Salt.

Simon Kuestenmacher: And it blew me away at that this thing even existed because I had no idea that you could do demographics for a living. In my head, this was just the fun bits of the broader umbrella term of human geography. That's usually where demographics sit under. And so I applied for the job and After the interview, Bernard called me and said like, why the [00:03:00] hell do you did you apply for a job that is partially researched and partially admin?

Simon Kuestenmacher: It's you're not an admin guy. I was like, oh I know I'm not but I enjoy demographics as I Yeah that's nonsense. I'm not giving you that job, but if you want to I'll create you another job. And so I started working with Bernard about a decade ago and, after a while when Bernard left KPMG, because they had a couple of rules in place that once you hit 60, they kindly ask you to to retire.

Simon Kuestenmacher: And then Bernard and I started the demographics group. And so we run this little five person global powerhouse, and we do. Exactly what it sounds like. We do look at demographics in Australia across the world, and we try to make sense of these data. We try to understand constantly through the demographic lens how the world works.

Simon Kuestenmacher: Demographics isn't everything, but it is definitely everywhere. So I think most businesses, of course, a very self-serving narrative. Businesses can't afford to get demographics wrong, and that's what we focus on is to talk to [00:04:00] people about the big picture demographic trends. And we urge them to act accordingly because you better position your your business and demographics are the closest thing to a crystal ball that we have when we are predicting the future.

Tim Whybourne: It is a fascinating space. And are there any demographers around, is there much competition in Australia? And who do you find demanding your services most? What types 

Tim Whybourne: of businesses? 

Simon Kuestenmacher: Yeah. So in terms of competition, I very much don't think that we have any competition. I don't believe in the whole concept of competition and the pandemic showed this that at the very core, just personally and as a business, we are doing well when Australia's doing well.

Simon Kuestenmacher: So our whole research, our whole presentations, the columns, they're all geared towards thinking through how Australia can become a better place. And we think that a rising tide lifts all boats and will eventually in some way or form benefit from this. And so to a large degree, we are a speaking business.

Simon Kuestenmacher: I'd [00:05:00] presented a hundred plus conferences a year, and that sounds like a lot, but it is not a lot at all. If you consider about. How many conferences and boardroom meetings take place on every single day? There is no competition. There are plenty of great demographers out there, and demographers are really split into two different camps.

Simon Kuestenmacher: There are the academic demographers and those folks that create the population forecast, for example. And then there are the business demographers people that use this demographic data to try to make sense of these data in light of the business incentives and KPIs of professionals of businesses.

Simon Kuestenmacher: And so we are clearly in the second part of the business demographer. And there are a couple of speakers that talk about demographics, but who cares? This is, there's plenty of work to go around and I honestly even in the consulting space, I don't think about competition. We are even in a privileged position in terms of consulting that we only take on [00:06:00] consulting work when we think we can absolutely provide benefit and that when we think that we will enjoy the work.

Simon Kuestenmacher: So it's a very picky and we pick the nice jobs. It's a nice position to be in. We could grow more just for the sake of growth, but we're not we try to be on target, on message, and keep this at a manageable level so that we still get to enjoy life a tiny bit, even though like we all work very long hours and travel a lot.

Simon Kuestenmacher: So we need to protect the little spare time that we have 

Simon Kuestenmacher: In terms of education, what, what does a typical demographer type of background do they have? Is it economics, is it 

Simon Kuestenmacher: history? So I'm, my, my academic training was, I have a bachelor in geography, human geography. So just focuses focused on how.

Simon Kuestenmacher: Population behaves within space, not in our outer space, but just the spacial elements of human existence. And then I did a master's in urban geography, more specifically thinking at how specific cohorts [00:07:00] operate in a city. This very much feeds into psychological, sociological, and economic data.

Simon Kuestenmacher: So we mush all of this together and we use statistics from a technical perspective. Demographics is very simple. Task mathematics are much, much harder in, in other subjects than it is for us. But then it's really the biggest task is to constantly make sense of data. So that means a bucket load of reading, non-stop reading about All topics, bit of random reading is important.

Simon Kuestenmacher: Historical reading, you need to understand longitudinal data. And we constantly have our our heads deep buried into data sets just to try to understand what's happening. And you constantly need to be careful that you don't hunt. For a story, just for story's sake. There is a, when you see an outlier in a in any data set you get happy initially because you go, ah, that's a great story to tell potentially, but you need to keep that balance between[00:08:00] wanting a good story and to trying to understand the.

Simon Kuestenmacher: The truth, the bigger, broader trends, if you will. 

Tim Whybourne: We have the same phenomenon in finance, the correlation versus causation arguments, probably the same concept, 

Simon Kuestenmacher: no, absolutely. And it's easy to stumble into this. I remember a while ago we had a dataset was meant to be a nice piece about just the column about the new buildings new building approvals across each state and each state capital in, in Australia.

Simon Kuestenmacher: And so you look at the data set into quickly throw it into excel or peblo or whatever we used. And it was fun to go Wow. In Canberra. The the new buildings that were approved are almost twice the size of the rest of a. And immediately a story kicks into gear. We go, oh, wow.

Simon Kuestenmacher: Yes, it's the big cats. The big fat public cats. There's a green city, there's space available pick up that still seems like an awful big house they're building. And then you realize that the data for Canberra was counted twice because they had the [00:09:00] same name for the state and the capital city in the data set.

Simon Kuestenmacher: And so I just doubled it up and we didn't publish anything. So no harm was done, no reputational harm. But this was a moment where I caught myself like, oh wow. You really always need to be on top of the data in order to make sure that you are not falling in love with a nonsensical narrative.

Simon Kuestenmacher: And that's what we try to do. And we really try to present data first. It's almost a bit schematic the way that we present that we write, that we consult we show Data, a set of data first, and we say, this is what the data tells us. And then we interpret and we essentially vouch for the quality of the data so that people can't attack us for fake news or anything, or this is just made up data.

Simon Kuestenmacher: That's not the case. It's rock solid stuff. People can of course, then criticize our work by saying your interpretation is ludicrous. But funnily enough, that already sets you up for a very interesting conversation because we are just then discussing the [00:10:00] interpretation of data and what should be done.

Simon Kuestenmacher: And especially in the consulting context, all of a sudden you create really attractive or lucrative productive discussions with the clients. So that's the way we work and so far it has served as well. And so far we haven't committed any data Uhunder. 

Simon Kuestenmacher: And in terms of the clients who is typically demanding your services or who's interested in hearing your thesis 

Simon Kuestenmacher: From a consulting perspective we work a lot with local governments.

Simon Kuestenmacher: They try to understand how their community changes and they then want to understand what it means. So I have plenty of great people out there that sell very good data about what your community might look like. But they don't necessarily provide the the interpretation. They don't provide longitudinal context.

Simon Kuestenmacher: And so we use such data sets and put the narrative in there. We workshop this with local governments to make sense. Anyone in the property sector? The property sector's, probably the core that most closely, most directly [00:11:00] understands why demographics matter because every person that is in a dataset needs to be living in some sort of box somewhere.

Simon Kuestenmacher: And that's what they're interested in. But then we also consult with With, really with all types of businesses from from food companies to, to advertising companies to large it, all the big IT companies. We worked with, I would say because they understand shifting demographics or they do it, they want to understand 'em a bit more.

Simon Kuestenmacher: We do this and from a presentation perspective, absolutely everything from from beef to dog food to real estate, to small local government areas to, to the biggest mining cotton conferences, whatever you can think of. And that's the, intellectually speaking, that's the nice challenge is to constantly think through new organizations, new industries what demographic shifts might mean for their future business.

Tim Whybourne: That is fascinating. In terms of timeframe, yet you are effectively trying to predict the future with a crystal [00:12:00] ball. So what timeframes are you typically looking towards and what timeframe do you think you can do accurately versus when does it get a bit hazy? 

Simon Kuestenmacher: Yeah. On Australian national level, I think if you look ahead anything between five to 10 years you hit hit it almost precisely on the head.

Simon Kuestenmacher: Because we dictate it's very simple to forecast Australia compared to other countries. Cause we know very much how many people die every year. We know how many babies have been born every year. Roughly, no, not the exact number, but we know the trends so we can forecast. Extremely precisely.

Simon Kuestenmacher: And as a nation, we dictate how many people get into the country every year because we run a skilled migration scheme with a skilled migration list. So it's nice and easy to forecast the immediate future. And if you look at four population forecasts from an age perspective, you can probably forecast population 20 years into the future.

Simon Kuestenmacher: Almost ex. You can forecast them very precisely when you look at people 40 plus [00:13:00] because this is the age group that is not of migration. Age migrants are 18 to 39, mostly people in the twenties and early, late teens. And so when we talk about the aging of the population, there's lots of talk about this.

Simon Kuestenmacher: We work with heaps of healthcare companies, for example. We can tell you what's happen. We know it. We know even based on these geographical shifts, we know where people are living. So if we talk about aged care needs just if, let's say you wanted to run a an ambulance care service where we have nurses or care workers, visiting people that want to age in place, we can tell you now where demand will take place in 10 and 20 years, extremely precisely.

Simon Kuestenmacher: And so that is great fun doing those doing those exercises. But that's because we know where population lives now and we know the housing behavior of certain people. And you then know which kind of people stay put. Until old age. And these are then obviously the market. So that's just one example of a business that might want to understand [00:14:00] demographics in order to understand demands in certain kind of markets.

Simon Kuestenmacher: And it's great fun. Playing with data, working through business models with those people's. Superannuation is another big fat sector that wants to understand what's coming because they now have this large cohort of baby boomers leaving the workforce, entering the drawdown phase of the pension system.

Simon Kuestenmacher: So all of a sudden a superannuation fund stops just getting money, but they need also need to pay money out. And then the money that comes in, or that still remains in, has a different level of risk associated to it. So that means they need to restructure what they buy, what they sell, and that.

Simon Kuestenmacher: Yep. So they are completely moving. Their perceptions of what it means to run a superfund at the moment. And yeah, so there's plenty of opportunities there for us to talk to superannuation funds, to work through them and to understand how they talk to clients. Because as soon as one generation moves from this live stage to the next live stage [00:15:00] a different set of values enters this live station.

Simon Kuestenmacher: So all of a sudden you want to very much adjust your marketing and you can't forever, onwards operate the same way. Even if your customer call always are people in their mid fifties for, financial advisors for example, they tend to onboard people in the mid fifties and that now changes.

Simon Kuestenmacher: So now with now Gen X, so a very pragmatic generation entering this age bracket the narrative that you use in order to talk to the call should change. And so we work with clients together to tell them what might work best for their clients. 

Tim Whybourne: This is a pretty big question, but what do you see as the biggest Australians affecting the Australian economy over the next five to 10 years?

Simon Kuestenmacher: So in five to 10 years, the baby boomers will still be healthy, active, so they will not be a major issue. They will mostly stay put. A big shift in the next five to 10 years is that leadership positions, almost all top leadership positions in the country will be taken over by Gen xus, by those very pragmatic people.

Simon Kuestenmacher: [00:16:00] So the next five to 10 years come back in five to 10 years and check with me. We will see, we will have made almost unbelievable steps towards gender equality, towards equal. I'll be ludicrous the advances that we made there, because that's one of the pet projects of Gen Xs work-life balance is another thing.

Simon Kuestenmacher: So in the whole type of war between working from home, coming to the office, everything every policy will air further on the side of work-life balance. So more on the working from hub side under a Gen X leadership, I would predict. And I think we are opening up ourselves to a more pragmatic leadership style which is quite nice.

Simon Kuestenmacher: I'm thinking more data-based, fact-based policies that take a longer time horizon. So I do honestly believe that's what happening in the next to five, 10 years. But the single biggest driver in Australia, demographically speaking over the next five to 10 years is millennials. The by far biggest population cohort, continuing to make [00:17:00] babies And so that means that all those millennials, they're currently still living in the inner suburbs of our big capital cities.

Simon Kuestenmacher: They will continue to leave those suburbs behind because they all of a sudden grow out of their one or two bedroom apartment. They need a three to four bedroom house to raise their family. They'll move to wherever these three to four bedroom homes are available, that is either the urban fringe or it's a regional town.

Simon Kuestenmacher: If we were all of a sudden to acknowledge that we have people moving that housing affordability is an absolute catastrophe in this country. You would then see regional towns step up. You might see regional towns coming up with plans to grow the population three, four fold in a relatively short term to provide high quality, medium density lifestyle.

Simon Kuestenmacher: Sounds scary. And it is a catastrophe. If it's not managed well. If it's managed well, we create much more livable places. In Australia, but we do need to very significantly change the way that our cities operate because we see [00:18:00] that Melbourne and Sydney, if you look back to pre pandemic levels, we saw that they reached capacity to function under the system.

Simon Kuestenmacher: Meaning a city at of 5 million people stops working. If it's sprawled out endlessly and only has a single cb single functional c b D. It's a recipe for disaster. From a gridlock perspective, traffic management perspective house prices are not being aided. We further segregate cities into rich and poor people.

Simon Kuestenmacher: Poor people live on the on the outskirts. Rich people live in the city center. That even makes life unattractive for the rich people because the poor people need to commute further and further. If you have an environment of a skill shortage, which we have why would poor people come and work in those rich areas?

Simon Kuestenmacher: So all of a sudden, the rich folks have a lack of locally available workforces to, to serve them coffees, to clean their houses. All of this affords apart. So ideally, if you want to restructure the way that we set up cities, we need to make more affordable housing, more key work, accommodation available left and [00:19:00] center.

Simon Kuestenmacher: We need to really rethink on a big scale how we shift our cities. And that will include systemic changes, meaning taking certain kind of veto powers away from local government areas that have played as nimby, for a very long time. I'm honestly seeing a scenario. So no, I'm not saying that it will happen, but I'm seeing a possible scenario where we the power of Of local government areas where we set really ambitious housing targets for each local government area.

Simon Kuestenmacher: And if they fail to meet those targets then they get defunded and if they fail it again, they get put under administration. These are quite plausible scenarios I would argue. 

Tim Whybourne: Does that exist in other countries? 

Simon Kuestenmacher: Other countries don't even give any power to the local government areas. If you look at the greater London authority they can just plan citywide.

Simon Kuestenmacher: They can actually view their big fat city of London as a coherent ecosystem, as a coherent system, and they can act accordingly. If they want to build [00:20:00] 20,000 kilometers or whatever it is of bike paths throughout the whole thing, they can do it. Whether this is smart or not, that's another discussion, but they have the power to actually shape a city.

Simon Kuestenmacher: There are plenty of stories in Australia. I used to live in one of those areas where. A big road leads through three local government areas, and they wanted to decide on how to set up a clear way so the traffic flows a bit better in the morning and in the evening. And they couldn't do it for years.

Simon Kuestenmacher: It took years upon years to decide upon what exact time should this clear way take place? And that is a ludicrous, and if you see a single such case, I think a council must be powers must be taken away because it doesn't work. So there must be a greater body that makes those decisions because you incentivize.

Simon Kuestenmacher: This is not incompetent. Local counselors. That's the important observation here. This is a systemic thing. A local counselor should always block any development, should block anything that comes along their desk because [00:21:00] somebody will hate this decision and so they should block it all. And then if it's really important, VCAT or NCAT or whatever the body is will actually push it through in the end.

Simon Kuestenmacher: But this takes years. It's a nonsensical system and it needs an overhaul. 

Simon Kuestenmacher: We were talking about urban sprawl and how it's inevitable and it has to happen, and obviously we've got an acceleration of that during Covid. Do you think we'll see any of that reverse a little bit as we're getting called back to the CBD as we have to go back to work?

Simon Kuestenmacher: Because I know a lot of people thought that these covid restrictions would last forever and moved away from their job and now their employers are making them come back. So how do you see that playing out? 

Simon Kuestenmacher: So what we've seen is that so during Covid, quite a few people figured, hey, I'm paying a premium to live close to the office tower that I'm not going to.

Simon Kuestenmacher: So how about move further out? So you've seen more and more people move further out, but they tended to stay within a two hour drive time radius from the C V D. It's hilarious. When you look at the maps of Australia two [00:22:00] hours is the magic distance. And so people move further away. That still allows them to do an extreme commute to the city center once or twice a week.

Simon Kuestenmacher: So people will work in a hybrid model. They will not go to fully remote work. The C B D will be emptier for quite a while. That's it. If a Melbourne, if a Sydney grows at a hundred thousand people per year, eventually the CBD will. Because a larger chunk of jobs will be in the city center eventually. This fill up, I can easily say this because I don't own billions of dollars of c b d real estate.

Simon Kuestenmacher: So who am I to talk? But eventually we will get there. I don't think that bosses currently have the leverage to dictate who is who's coming in. And you'd also want to ask yourself as a boss, really, honestly, why the hell do I want people in the city center? What for? If this is just your your power play, if you just want to ensure that you have the control over workers then you're not doing it right.

Simon Kuestenmacher: You[00:23:00] probably will want to ensure that people come to the office at least once a week.

Simon Kuestenmacher: So that you create the sense of culture, this sense of team, spirit and research beautifully showed that whether people work together five days a week or one day per week, they have to stay. Same feeling of belonging to the team. It made no sense to me initially when I read it, I was like, ah, surely there's a difference between one and five days.

Simon Kuestenmacher: But then I remember that for many decades I played in a football sport team. And we just played once a week for a couple of hours and I considered these my, my best mates. And then I figured, okay, that's probably enough. Makes sense. So you want to get people in regularly, but not too often necessarily to get the sense of team.

Simon Kuestenmacher: But you also want to make sure that you get all those workers into the office to do deliberate work. Deliberate work will most likely include creative collaborative work, but deliberate work will also include learning. Because the biggest problem with working from home is that particularly your younger staff staff, asks fewer questions.[00:24:00] 

Simon Kuestenmacher: There is fewer learning taking place. These numbers are made up. But just imagine a young graduate sitting in an office surrounded by heaps of other workers. He'll ask. He or she will ask 52 questions per day. Whatever it is, they will still ask questions to their body or bodies to their to their managers on their daily Zoom call, but they will ask fewer questions.

Simon Kuestenmacher: So you need to proactively, create learning opportunities where, get people, this can be done remotely, theoretically, but it's nice to do this in the office as well. So you make it so you, you need to earn the commute of your workers. You need to make the commute worthwhile as a boss. If you walk through your C B D office tower and you see a staff member with noise canceling headphones on, Apologize, hug them.

Simon Kuestenmacher: Tell them you wasted their time. Why should they go to a noisy office to do what is obviously a quieted task? You screwed up. You didn't do their commute justice. You want to make sure that people [00:25:00] actually need to go to the office if they want to go to the office. Cool. But lots of workers won't, particularly in the near to medium term, the millennials, because they move further away.

Simon Kuestenmacher: They now have families. They want to skip their commute as often as possible to maximize family time and to save money, to be honest, because commuting is expensive, both in time and dollar terms. 

Tim Whybourne: In this world, in 5, 10, 15 years, we're imagining where the cities have sprawled and not everyone lives in the major cities and we live 2, 3, 4 hours away.

Tim Whybourne: And are we still commuting to work or are we working remotely or have new jobs opened up in these urban locations? 

Simon Kuestenmacher: We can predict the future, or I can tell you about a scenario that I would like to see. I would like to see an Australia where the state capital is not as dominant as it currently is.

Simon Kuestenmacher: We live in the most clustered country in the world, meaning that there's no country in on the planet. If [00:26:00] you disregard Singapore or city states like that, where such a high share of the population lives in the top five cities it's two thirds of the population live in just five cities. That is extremely high.

Simon Kuestenmacher: So we create big city problems. We could spread our populations a bit better. So that means we would want to create many more cities between a hundred and half a million of thereabouts. We should grow smaller cities at much faster rates than we grow bigger cities. We would then, of course, create a couple of issues for the big employers, for example.

Simon Kuestenmacher: You'd need more regional hubs. If the city isn't big enough or if the outer suburb of the city isn't big enough a na, a kpmg, whatever, they won't have all that many towers everywhere. But, so I would see, I'm seeing a scenario where you have more and more co-working spaces, general office spaces, where an employer would just rent a couple of desks, a couple of floors, whatever, depending on how their, what their size is.

Simon Kuestenmacher: And you'd then have people working near home. So [00:27:00] you'd then eventually create secondary employment hubs, secondary cs and people would still. Probably relatively frequently, maybe once a week commute to the big thing, the big C b D. But ultimately they work from home or in their working near hub loca in their working near home location more frequently.

Simon Kuestenmacher: That's a scenario that I would enjoy because this way we could spread population growth over a larger canvas without creating necessarily this in. Almost silly herbs sprawl that we're doing at the moment. We're not doing ourselves any favor if we want to grow at a country at reasonably high rates, which is what we are doing.

Simon Kuestenmacher: And I don't think there's a plausible scenario where we're not doing this. So rather than complaining about migration I would argue it is much smarter trying to channel this migration, trying to channel this growth, trying to decide upon what a positive new Australia might look like.

Simon Kuestenmacher: Yes, you can fight and complain[00:28:00] about population growth if you're some client, but then you are pretending that a small Australia is feasible. I don't think it is because I'm seeing the huge Backlog and infrastructure that we have. I'm seeing the huge need for for care workers, for medical workers that is coming our way.

Simon Kuestenmacher: And I don't see a scenario where we can fix this in a low migration scheme. So I would argue big migration is the way to go. I'm happy to be convinced otherwise, but if we say big migration is the most likely scenario, we need to plan for a big Australia. And you'd either have people that are just hating on it and they don't even want to think about this way.

Simon Kuestenmacher: And if you've fall into this camp, you just let the future happen. You're not shaping it proactively. And I want this Australia to work for absolutely everyone. So I want this to be a national conversation about what the future looks like. And I think we need more si more s sizeable cities. I think we need to make them denser.

Simon Kuestenmacher: And that doesn't mean slum like crappy highrise boxes, shoe [00:29:00] boxes but it means European style euro blocks what they're called think Barcelona, Stockholm, Berlin. That's the style of city that I would like to see in more Australian medium sized cities. And that would give Australians a better choice.

Simon Kuestenmacher: It gives them more choice of where they want to live and how they would want to live. 

Simon Kuestenmacher: I agree. Yeah. Something has to change with the the price of property in the large cities around Australia onto a more contentious topic. Everyone's talking about chat, C B T and artificial intelligence, and that's a topic that I personally love, disruptive technology.

Simon Kuestenmacher: But do you think there's ever a point where the entire workplace or a large portion of the workplace could be replaced by either robots or artificial intelligence? Or do you think the workforce looks like in 20, 30, 40 years? 

Simon Kuestenmacher: So I'm very optimistic about the future. I'm not afraid of AI per se.

Simon Kuestenmacher: I'm thinking that the work workforce is much more flexible, pliable than we do at justice. I'm seeing that the main impact that something like artificial intelligence [00:30:00] automation has, is that each and every single one of us work piece is left with more interpersonal tasks because just these robotic, repetitive tasks that we do every day.

Simon Kuestenmacher: Every job has those tasks. They will increasingly be faster because AI helps us to do them. Maybe they'll be even completely done by an AI without us doing all that much. But that, I believe that to misquote Jurassic Park work finds a way to fill our day. That is, and we will then ultimately be left with a much more human workspace.

Simon Kuestenmacher: We workplace where we spend a bigger chunk of our day doing interpersonal tasks rather than mechanical technical tasks. So that means in the future of work that is very tech heavy, it is not the tech skills that sets us apart, but it is the interpersonal skills that will set us apart. So if you hire young workers I would say, Test for their interpersonal skills.

Simon Kuestenmacher: [00:31:00] Take those seriously when you hire staff, because that'll be the make it or break it tasks. It's relatively easy to teach people technical expertise, but it is outrageously difficult to teach them interpersonal skills. So that's something that I would really double down on. That would mean that in a high school environment it is probably not the STEM subjects that are most important in a tech world.

Simon Kuestenmacher: Yes, I want you to be tech literate and so forth. But it would be theater, it would be drama. That will sets you apart because this is the subject where you really learn to communicate with other people, where you learn to feel emotions, understand knowledge in your own heart and soul and brain, and then communicate them to an audience to other humans that is quite interesting.

Simon Kuestenmacher: And AI might. Kill a couple of tasks, might kill a couple of jobs even. But ultimately I cannot replace us as consumers. Remember that you always want a big fat load of consumers that have their pockets full of money to consume [00:32:00] the stuff that you sell them. In a world where humans do nothing but AI does everything how does that work?

Simon Kuestenmacher: This could be some sort of Marxist utopia. I'd be cool if that happens, eh, do nothing. And AI does everything for you and looks after you. But I don't think that's a plausible scenario. 

Tim Whybourne: No, it wouldn't work for me either. I'd get very bored. So we spent a bit of time talking about what's gonna happen over the next 10 to 15 years due to much fortune telling in through to 50 years, a hundred years plus what the world might look like.

Simon Kuestenmacher: Absolutely. And if we look, let's say probably 50 years is a nice number to look at, because in 50 years right around then, we will see peak humanity. Human population will peak right around then at just over 9 billion people call it nine, nine and a half, whatever it is. Probably, or almost most likely under 10 billion people, human population will peak and we will then slow down.

Simon Kuestenmacher: So the whole idea of overpopulation shouldn't worry at the motor for all that much. We are very [00:33:00] much breeding our way out of overpopulation. Gut birth rates are dropping. The more higher educated we are as a species the more urbanized we are as a species the smaller we get as a species.

Simon Kuestenmacher: So the whole overpopulation narrative is nothing that worries me whatsoever. Yes, we need, we still operate on a planet of finite resources, so we need to be very careful and responsible in using those resources. But if I look ahead in 50 years, I'm seeing what we are already doing. We are already started at scale to clean up the planet.

Simon Kuestenmacher: These efforts of cleaning up the planet of rewilding, the planet of becoming better stewards of the planet, that will only increase. So I'm even optimistic about this. So I don't think if you think about climate change, yes, that thing is real. That will very much change livability of certain areas across the globe for the better in some areas, for the worse in many.

Simon Kuestenmacher: But we can deal with this. We can adopt to those changes. We then also as a [00:34:00] species need to be very clear that we get food production and water management right, will be the most important challenges. And that we then con distribute these food staffs across the world so that we all have a high quality of life, or at least not bloody staff to death.

Simon Kuestenmacher: And that can be done currently, though we don't, we lack the. International bodies that are powerful enough. So I'm hoping that more and more nations become responsible enough become less self-interested in order to provide just such a body. We have bodies in place. They're utterly powerless. And I'm hoping that they will increasingly be given more powers to change the world for the collective improvement of humanity.

Simon Kuestenmacher: Yes, that sounds outrageously optimistic. Some people might say naive. But I think that we are moving that way. I honestly believe that the world is getting better, that there is an upwards spiral development of humankind where we are getting collectively wiser and [00:35:00] smarter. Yes, there is more genocide, horrors left and center, but ultimately this is becoming less severe as we progress through human evolution.

Simon Kuestenmacher: And so I'm actually optimistic about the next 50 or 100 years that you asked about. So I'm thinking would I want to live now or would I want to live in a hundred years? I would live in the future. 

Tim Whybourne: Oh, it's good to hear. It's rare to hear a positive insight on the, where we're going over the next five to 10 years.

Tim Whybourne: Cuz everyone's talking about conflict and hunger and Yeah, nothing good. 

Simon Kuestenmacher: And all those things are real. All those things are real. There is a real risk of China and the US escalating trade wars. They might even come to, to blow us in some sort of smaller theater. I think that's plausible.

Simon Kuestenmacher: Is it likely? Who knows? But then if you scale back to Australia, I think Australia has a couple of geopolitical challenges to master mostly about. Always being in the good books of two powers that don't like each other all that much. That's our challenge. We need to be nice [00:36:00] to China.

Simon Kuestenmacher: We need to be nice to the US and that's what we do. We need to balance it. And both powers will slap us on the wrist occasionally, but ultimately we are not all that interesting, in a global perspective, which works in our favor. So the tyranny of distance is no more. This is a gift.

Simon Kuestenmacher: Our business model, the national business model of Australia that is continues to operate. We dig stuff out of the ground, we sell it to the world. We grow stuff on top of the ground. We sell it to the world. We educate a couple of people, international students, we entertain a couple of people, tourists.

Simon Kuestenmacher: That's what we do. That's about it. And there'll be demand for this because ultimately the work gets richer. Meaning they need more of the stuff that we have to offer. The workforce needs more and more people in university degrees. So we have that to offer. That makes, puts me in a very positive, optimistic sense.

Simon Kuestenmacher: The biggest challenge that we have to make sure that Australia works for all is to get housing affordability, right? Is to make sure that people have a high quality of life. And I'm seeing this working for the top [00:37:00] 20% quite easily. No problem there. But if I'm looking at particularly, let's call it the bottom 20% of the income spectrum, that's not a fun life and we need to fix this and we need to have an honest, national discussion about what should a worker be able to expect in Australia.

Simon Kuestenmacher: Let's say you put in, let's make it 60 hours, let's say work 60 hard hours in whatever the job is. You should be able to afford a small, humble home and to live decently and to have decent healthcare. That should be the ambition in Australia and that if we fail to deliver this, we are a failure as a nation.

Simon Kuestenmacher: That must be the general mindset, and we want to build a better Australia. And building this now means change. And change is very hard to stomach to people. And if you become afraid of change, you start to reminiscent about the past. You start to paint a rosie picture about the past and it actually was.

Simon Kuestenmacher: And you want to go back rather than progress and move forward. And that can be [00:38:00] frustrating, can be a bit challenging, but that's a fight that we need to, that we need to do. That's a public fight, a public discussion. But where we want to take the nation. 

Tim Whybourne: I think it was in your article published over the weekends that you're talking about housing affordability or was it was certainly from your group, but was it the average property now costs 13 times your average income versus the global standard, which is five times?

Tim Whybourne: Do I have those numbers correct? 

Simon Kuestenmacher: Yeah. So the figure there is the median house in Sydney costs 13 times the median income. So 13 times of the annual income gets your house Melbourne is cheaper. I think it's 11 times the annual income that's brutal. And the, there's a group demographic in a, in America they measure international housing markets.

Simon Kuestenmacher: And they say if a housing market costs five times the median income and then the market is is labeled severely unaffordable, that is their worst category. So you see how far even an af affordable capital city like Perth or Adelaide who are eight to nine times the median income how insanely [00:39:00] unaffordable that is.

Simon Kuestenmacher: That needs to be fixed. It's just not, it's just not a fair approach, particularly for the, mostly the bottom half already. So it's a ludicrous amount of people. And so the social construct needs to change and people know this, and I'm seeing more and more anger bubbling up, and we want to avoid this.

Simon Kuestenmacher: I'm always on the side of evolution rather than on the side of revolution. And so I'm not saying we get, the guillotines out or something, we're not at risk of this. But I want us to slowly stabilize house prices, get them down, ensure that we massively increase housing stock. Then that includes a state owned property developer that provides housing without a profit incentive that makes it cheaper.

Simon Kuestenmacher: That builds housing at scale on state owned land that makes land essentially for free, at least it's tax free. And all of a sudden you can build cheaper housing. We need to build housing in a more sustainable way. We need to make sure that a house has a longer life expectancy than 30, 35 years, which is what lots of the new townhouses have.

Simon Kuestenmacher: They have a life expectancy of 35 years. [00:40:00] That's not smart. Of course environmentally it's a catastrophe, but it's also silly from a workforce perspective because we just assume that we have enough workers to constantly overhaul the stock the housing stock. We probably don't. That's it.

Simon Kuestenmacher: Here's a free business idea. If you have, if you operate any kind of trade business that and you are your own business owner because that gives you a, statistically speaking at a 27% pay price on each trade you'll be fine. You'll have a mighty great decade ahead. Start to start this kind of business, employ two, three other people, and just go from one job to the next.

Simon Kuestenmacher: You will be forever fine and you can charge ludicrous prices. So becoming a trade, has become unnecessary, unattractive in Australia because we didn't extend the social clout, to that cohort. And also we put a a hurdle in their way by making tave expensive or by charging for TAFE education.

Simon Kuestenmacher: And that was done university degrees at least. Most of them give you a nice pay premium so that the [00:41:00] cost can be justified. To a degree it's probably too expensive, but that at least it intellectually makes more sense to me rather than TAFEs. Ultimately, the TAFE premium that you get isn't that high.

Simon Kuestenmacher: So why would you incentivize people from tafe? It's not smart as a country, and God knows we have a 20 year infrastructure tech look, we need to overhaul our housing stock. We need to massively increase our housing stock. We need people who built those houses. And roads and pipes and whatever. So yeah, that needs to change and I've seen positive trends there.

Simon Kuestenmacher: More and more we've seen schemes over the last two, three years really of free tafe courses that was largely linked through two pandemic pay packages and so forth. But overall we are moving in the right direction. So yet again, a small little thing to be optimistic about. 

Simon Kuestenmacher: No, I know a few people building houses are trying to build houses at the moment and they just can't get a builder for some cases.

Simon Kuestenmacher: 6, 12, 18 months. And it's not just in the building sector, it's in, in health as well, isn't enough nurses in, certainly in Queensland and then across [00:42:00] a lot of our client base that'd have in the industry, they can't get boiler makers. You can't get tractor drivers. You can't get forklift drivers.

Simon Kuestenmacher: How do we solve that problem? Where are these people gonna come from? 

Simon Kuestenmacher: You see how beautifully this links into the AI question of earlier. If AI kills a couple of tasks, makes workers more productive, frees up workers for other elements of the workforce, structurally speaking that is a positive thing because we need so many more trades workers.

Simon Kuestenmacher: We are doubling the population 85 plus over the next 12 years. That's very soon. That is statistically important to know because half of the population, 85 plus requires care. And if you remember last year, June or so, there was this big discussion about the Aged Care employment crisis where we didn't have any work left in the aged care sectors.

Simon Kuestenmacher: And and then the existing staff got worked to death and so they left were more likely to leave and as a downward negative spiral, that's what we are facing. So in order to counter those trends, you can just quickly fix it by immigrating by [00:43:00] getting immigrants into the country. That's nice, that fixes it quickly.

Simon Kuestenmacher: You want to make sure that people live independently for longer, that you minimize the care need. That means you need to transform retrofit homes. So that people can safely live in those homes. So longer technology will do a bit over this. But lots of this will be simple building fixes like perfectly, even floors, there's no step to get air into the, onto the veranda, into the garden.

Simon Kuestenmacher: Big, broad doors. That means if you build a new house, make sure that all those doors are wide enough for a wheelchair to fit in. Costs you a couple more bucks initially, but retrofitting this is outrageously expensive. All of those things should be considered at scale. Multiply this times 11 million homes and so forth, and all of a sudden things happen at scale.

Simon Kuestenmacher: But that's the kind of thinking that I want to encourage when we move forward. 

Tim Whybourne: Onto a topic that is close to most Australians heart, the property prices or certainly a lot of the listeners will be interested in this. Do you have a view on Sydney and Melbourne? Prices have gone through the [00:44:00] roof and Brisbane's caught up in recent years.

Tim Whybourne: Do you think that can continue or do you think this urban sprawl will reduce demands and prices might stabilize or-? 

Simon Kuestenmacher: Two answers. One is what I would want to see to happen. What I want to see to happen is prices as, so I'm talking about relative house prices. I want them to fall quite significantly.

Simon Kuestenmacher: I think we should we should rethink the way that Australia operates and that probably means, Sydney is at fa is at a failure point cause it's just so expensive to live there. So it's probably not good. I do not want this to happen. But then the other question is, what do I think will happen?

Simon Kuestenmacher: Do I think prices will fall in Sydney, for example? Probably not. The C B D Barangaroo whatnot will still be the most attractive office destination in the whole country. I'm looking at crappy old buildings. We not talk about beautiful heritage stuff. Crappy old buildings in Sydney, in prime locations, they will all be demolished sooner or later.

Simon Kuestenmacher: There's just so much that can still be done. There, [00:45:00] this will be done at high costs and people will want to get their profit back, so these will be high. Sydney, neither Sydney nor Melbourne has lost During the pandemic, there's international demand to move to Australia. These are cities with extremely positive local not local global brands.

Simon Kuestenmacher: And Brisbane will increasingly join them with the Olympics and further strengthening the brand of Brisbane or Southeast Queensland. So I don't think that prices will fall, honestly. I hope they do. I hope the exact opposite of what I think will be the future. 

Tim Whybourne: No, I tend to agree. It's supply and demand and if we've just got more and more people and less space, then they one direction.

Simon Kuestenmacher: Yeah. And you want to historically understand what we've done. We have now drawn urban growth boundaries. They, of course, they have meant to be set in stone, but theoretically they could be pushed. So each city now has a limited finite amount of land. Land doesn't grow. Then you throw in more people.

Simon Kuestenmacher: In the case of Sydney, 80,000 people per year in the case of Melbourne, up to 120,000 people per year. And you give those people more money. [00:46:00] Remember that ultimately Australians are getting richer because we are shrinking the middle class. We are amping up the upper class. We have more people in, technically they're called skill of one jobs, highly skilled jobs.

Simon Kuestenmacher: We need a university degree. Those inner city laptop type jobs we're growing them. Also, we are ever increasing female workforce participation, which ultimately means we have almost no one income households left. Households now have at least one and a half household incomes, if not two. So the spending power just goes up and up.

Simon Kuestenmacher: Wonder what this will do to house prices. Yeah. The big term trend always pushed, house prices up. Growth boundaries are of course, Pushing this. The nimbyism of local councils that we spoke about already is also pushing house prices up because whenever an inner city or medium medium distance to the C B D suburb blocks a development, the price of the amount of land essentially stays the same or got shrunk even.

Simon Kuestenmacher: And so that means prices go up. 

Tim Whybourne: [00:47:00] Now it's a interesting space and I think everyone in Australia has an opinion. 

Simon Kuestenmacher: And one of those big fat issues. And so I'm not, I don't want to blame politicians for things. As a general rule, because I want to po blame demographics, I want to blame systems. But there is one thing that is just purely political failure, and that is not linking the migration policy to the housing policy that is dumb.

Simon Kuestenmacher: There's no reason a city needs to stop operating at a certain population number. Cities, theoretically can operate at all types of sizes, but if you just allow a population to grow faster than you provide housing or other infrastructure, you are inviting problems. And that's what we've done. So it is not per se, migration the problem, but the problem is that those two sets of policies are linked to each other.

Simon Kuestenmacher: We should we should force the ministers for housing and for immigration, to to share a flat in Canberra together now, so that when they cook their noodles at night that they get talking, that they get those things[00:48:00] sorted out. 

Tim Whybourne: Good luck with that. Onto a, another controversial topic.

Tim Whybourne: So cryptocurrencies have popped up in the last decade, even more so the last couple of years. E everyone's been forced to view it. It's now quoted on the news every night in the price of Bitcoin, which I never thought I would've seen five years ago. But whether you're pro bitcoin or against it, do you have a view on whether it will survive as an asset class and what part it'll play?

Simon Kuestenmacher: The first thing is the legal trics that I am far from an expert in the space. But it's also a nice excuse to remind everyone you'd want to talk or read about a topic that you're interested in from the expert perspective and also from the complete outsider perspective, because sometimes your expert knowledge can blind you off of things.

Simon Kuestenmacher: And so in terms of Bitcoin the things that make me nervous is that it's not really that clear what it is. You don't know exactly who founded it. There is money can disappear. You ca if you lose the key, bitcoins die. They don't, you can't do [00:49:00] anything with them. That seems like nonsense. To me for the whole thing being extremely energy intensive makes it at least theoretically possible that Bitcoin prices can be negative if you were all of a sudden to account.

Simon Kuestenmacher: Now a CO2 balance to it. If you attach a CO2 balance to every single Bitcoin the price might well be negative because it's so out outrageously labor and energy intensive to create bitcoins. So my initial thing, my initial gut feeling tells me that Bitcoin is utter and complete bullshit. That's my, that's the gut feeling that I have without any deeper understanding of the issue.

Simon Kuestenmacher: I fully understand cryptocurrency, understand the concept and the push the need for cryptocurrency. It solves heaps, at least theoretically, it can solve heaps of problems that you have when you constantly move money across borders to have a borderless currency. That'd be nice, a borderless where we're not cons.

Simon Kuestenmacher: If you can now buy stuff across borders, but money gets burned in the process [00:50:00] if you had, if you create a seamless transaction there, that's wonderful. That's what we want. Will it survive? Yes. If we collectively decide that it's a store for wealth, that it's an asset class that we just say we've just, and you see this at the moment that it adds as a bit of a hedge towards the economy that if things go down in the stock market, we'll buy a couple more bitcoins.

Simon Kuestenmacher: We see that a bit. But my general gut feeling is don't do anything with it. I own about, what is it, $3,000 worth of mixture of online coins. Basically on the thing is only by, I'm not in a position to give financial advice. Only by as much as I would be absolutely happy to completely lose.

Simon Kuestenmacher: Asset class any more in the mix. Seems ludicrous to me. But, couple of people, of course got rich in the process, good on them, hope they are happy and make more money and so forth. That's cool by me. But does it solve, does stupid bitcoins in particular solve any problems?

Simon Kuestenmacher: I would argue not, but again, I'm the outsider. 

Tim Whybourne: That's an interesting take, and I don't disagree with your view in that. Only hold as [00:51:00] much as you're prepared to lose. It's very sensible. Onto a slightly different question. So autonomous vehicles are becoming a real thing. Is that something you look at and how that might change?

Tim Whybourne: How cities are shaped and how we commute, how it affects our lives? 

Simon Kuestenmacher: It's a couple observations. So I don't see any major difference from an urban perspective between electric cars and petrol cars. It's just, it drives a bit cleaner. Nice. The supply chain for a car becomes heaps more complicated because you can't just invade one Arab country and have all the oil that you need, but you need to invade like when it's 17 different metals or whatever it is in the car tree.

Simon Kuestenmacher: So supply chain is much more fragile. So it's actually politically speaking, potentially a riskier business. Okay. So let's just say we get it all worked out. The electric cars are probably nicer. That's cool. Self-driving cars, then things become interesting because I would say then the car can look differently.

Simon Kuestenmacher: So then the car can just be a more mobile work pod and you can actually use the time more in a more lucrative way. You can either sleep, you can work in the. So [00:52:00] not, you don't waste as much time. So that's nice. That'd be positive. It would still, in this traditional model, if still everyone owns their little car it wouldn't improve traffic, so it wouldn't change that much.

Simon Kuestenmacher: It would just make sure that people are happy to commute longer. So that would further drive sprawl. I would largely consider this a negative thing. The real power of the technology that we have here is if we were to give up car ownership is if we just had those autonomous magic little boxes driving from here to fro and you just essentially tell your little app where you want to go and.

Simon Kuestenmacher: Thing pops up at your door. You will walk in you step in and it drives you to where you want to go. You would not be the only passenger in most cases. Cause this will help to keep cost. It would help to minimize the number of boxes that drive around on the road. Then things become really interesting there.

Simon Kuestenmacher: Of course, plenty of use cases where you'd want your own car. All tradies, for example, they will always need their own car. [00:53:00] Cool. If the new drives themselves, then those guys can use their time in the car more efficiently. That's good. But ultimately, until we reach the absolute peak of Self-driving cars that are not owned by individuals anymore, but that are just part of a fleet that is constantly in use.

Simon Kuestenmacher: And you would then operate on 20% of the cars that we have more at the moment, and you'd be just as efficient or more efficient. So that's the rear game changer. Then you free up space that was used up for cars to use for better uses. You had to make it actually to make cities better for humans to live in.

Simon Kuestenmacher: That would be interesting. Before that, I'm not all that excited about things because they don't change things in a structural sense, yes, it's cool if you don't have to drive yourself or if the car avoids a couple of accidents like all of that. But the big major changes need to see this technology be implemented at a massive scale.

Simon Kuestenmacher: And I'm not sure that this would be the case anytime soon.

Tim Whybourne: No, no doubt. Take a very long time to replace the current fleet of petrol [00:54:00] non-autonomous vehicles. But it's certainly an interesting space and fascinating concept. Just gotta get a couple of final questions, just conscious of time so I won't keep you too much longer on geopolitics.

Tim Whybourne: Do you have a view on how Russia or Ukraine all play out? And again, if tensions will escalate or deescalate in China, US relations, I should mention? 

Simon Kuestenmacher: Yeah, so let's let's just look at Russia first. So when they first marched into into Ukraine, I wrote a column about the demographics of Russia.

Simon Kuestenmacher: And I argued cause their demographics are a pure catastrophe, as is an a country that is in terminal decline. So if I was a 70 year old Dictator person, I'd say, oh, this is the golden opportunity for me. I need to take this opportunity to invade other nations and increase the space that I have to increase my population.

Simon Kuestenmacher: All of this is important. And that's your last chance because you now, at the moment, they have a big fat group of 18 to 27 year olds that's [00:55:00] officially the military age in Russia. There was a mini baby boom about, 20 years ago, and that's well and gone. So you have a window of about five to six years where you have this elevated population in the interesting court.

Simon Kuestenmacher: So if you are willing to have a bit of cannon for thrown at a war, this is your time. So it. If you ever wanted to do it, you do it now, from a Putin perspective. So I'm what that, that's a long-winded way of saying there will be no backing down from Russia whatsoever. Peter Zion, who writes and speaks about geopolitics a lot he made the rather shocking observation that Russia never, ever stopped a war up to the point where 500,000 of their own lives were lost.

Simon Kuestenmacher: And at the moment we are there around 200 or something. So there's a long way to go, just, if you take this as a rough indicator of what's willing to happen. So I think that everyone will go the way of avoiding a direct conflict between NATO and Russia. So there'll be a proxy war. The only way that Russia can.

Simon Kuestenmacher: Do [00:56:00] is so they can, he can't back down. So they're doing, we're continue to do what they're doing now to build new alliances. So to build more of a when you see who Putin is building alliances with it's the bricks really. So they're trying to do this a bit more bit doubling down on those players, which should further build a western and an eastern block.

Simon Kuestenmacher: That's essentially the only way that they currently have in their thinking is stepping back, is essentially revamping the East Western block narrative. Considering now that particularly India and China are much, much stronger than they were in the past of course Russia is a absolute catastrophe of a country.

Simon Kuestenmacher: Every single person in Russia should do the utmost to leave, to seek a better life elsewhere because their life will only go downhill. I don't see a scenario where any Russian is better off, in this war scenario than they were in the non-war scenario. So I'm not optimistic about Russia whatsoever.

Simon Kuestenmacher: Tensions about China. China America trade war. Yeah, [00:57:00] potentially. But I think the key tensions to a minimum you've seen China always, of course, obviously having the eye on Taiwan to get, them back into the fold. And now they've seen what happened to Russia. If we were to put Russian style successfully, put Russian style sanctions onto China you'd have hundreds of millions of people die within a year cuz their net import of food and energy.

Simon Kuestenmacher: So this is why China actually is quite happy to have an absolute peace week. Russia, China does not want Russia to be European, but they don't want to Russia to be good or strong. They want them to be a miserably poor state that has nothing but a corrupt elite to extract. Food and energy. It's the only things that Russia can do.

Simon Kuestenmacher: They can do absolutely nothing else. They suck at everything except for having land available to dig stuff out and grow stuff on on top of. And that's exactly what China needs. So if you then look at the [00:58:00] Chinese and Australian relations, you want to remember that China needs us much more than we need China because we only get money from China.

Simon Kuestenmacher: Boohoo, who cares about that? But China gets things that keeps the lights on, that keeps the industry going, energy and that gets, they get food from us. They're net importer of food energy. That's a terrible position to be in. So China, in a sense, is lucky that they are also in terminal demographic decline.

Simon Kuestenmacher: China will be half the size, the population size by the end of the century. That's insane. But then again, if they shrink to half of half of what they are they have the capacity to look after their own population from a food and energy perspective. So that is much welcome in China. And that's the reason that this energy dependence, why China builds out more renewable energy projects than anyone else.

Simon Kuestenmacher: So there are a couple of aspects there, but ultimately I'm not worried from an Australian perspective all that much because even in a trade war scenario between China and the [00:59:00] US I would argue that then means that the maritime security isn't guaranteed by the US anymore in the region.

Simon Kuestenmacher: But so China would take over and they would ensure that our little ships scout cove from our ports safely to the airports because they need food and energy and it's always cheaper to buy Australian stuff than to take over Australia. That'd be stupid. So I think that's fine. China will of course constantly slap our risk and say normal lobsters from you, no more international students for you, these kind of things.

Simon Kuestenmacher: But they need to do this, need flex, need to show who's boss. But I think, I truly believe that the Australian business model will continue to work into the future. No, that makes sense. 

Tim Whybourne: Thank you very much for your time. Was there any final message you wanted to deliver to the audience? 

Simon Kuestenmacher: I hope that people are optimistic about the future.

Simon Kuestenmacher: It is very easy to be seeing all the negatives and there are plenty of negative things that we need to be fixing and we need to fix them. We need to secure our world to be fit for climate change. We need to create livable suburbs. We need to make sure that people that work [01:00:00] full-time can always have a decent quality life in Australia.

Simon Kuestenmacher: We need to make sure that we have enough water. All of those things require severe management that. Ultimately, I think we do have the the power, the capability to solve those issues. And so ultimately I'm more optimistic and I want people to become positive advocates of change to become positive architects of the future rather than to be victims of the future that just complain about how things might or might not look, but rather proactively change things.

Simon Kuestenmacher: Anyone who is business minded, most entrepreneurs just by definition have such a mindset. And so I want those people to take over power and to run countries with the good of the collective in mind. Of course. 

Tim Whybourne: That's a great message. Thank you very much for your time. I know your time's in hot demand.

Tim Whybourne: It's been absolutely fascinating. As always, if anyone wants to reach out or engage Simon or his business, the address will be in the show notes. But thank you again, Simon. 

Simon Kuestenmacher: It's been a pleasure. 

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