Population growth quickest way to a $40bn economy: Demographer Simon Kuestenmacher

Demographer Simon Kuestenmacher has identified the key challenges facing the NT government as they strive to achieve a $40bn economy by 2030. See what they are.

Demographer Simon Kuestenmacher has identified the key challenges facing this and future Territory governments as they strive to achieve $40bn gross state product by 2030.

“The NT aims within eight years to grow the economy by as much as they have over the past 20 years,” Mr Kuestenmacher said.

“This means the Territory wants to condense the past 20 years of economic growth into the future eight or nine years.

This, he said, is “challenging and ambitious” and most easily attained by population growth.

“The easiest way is to add more humans because each human by the sheer merit of being there adds to household consumption,” Mr Kuestenmacher said.

“With your current population you get around $11bn of household consumption, if you were to magically double your population, you are almost there, you have almost reached your target.

“In order to grow by that much you have two levers you need to pull.

“The first is population growth.

“The second is to get private capital into the Territory.”

Simon Kuestenmacher, director of research at analysis firm The Demographics Group. Photo: Supplied

On the back of Inpex, between 2013 and 2018, the Territory enjoyed elevated private investment doubling from an average of about $5bn to about $9bn over the five-year phase.

“It could also be through public investment through the Defence sector, for example. That’s technically public investment but private companies could also be integrated there,” Mr Kuestenmacher said.

Focus should be on growth across the board, with an especially keen eye on large and established sectors.

“The main game will always be in mining, public administration and Defence,” he said.

Every sector will be required to contribute.

Tourism currently contributes about $800m to the Territory economy.

Doubling that would be a substantial contribution.

Education services can also play a part.

Mr Kuestenmacher praised Charles Darwin University (CDU) for reversing the national trend and increasing its overseas student intake by approximately 600 during the pandemic to about 2000.

CDU has a broader plan to have up to 6000 overseas students in Darwin within five years.

“International students are financially extremely lucrative so any international student helps and any further investment into enabling us to attract international students is welcome and it amps up the population base, which is very important in order to get to that $40bn target,” Mr Kuestenmacher said.

“What does an international student do? First and foremost they spend money, like every human on food, rent, travelling.

“That money is from overseas and every dollar they spend is foreign currency that flows into the money that pumps up the economy.”

Lauren Hutcheson has recently moved back to the Territory as Bright Young Things return in droves. Picture: Glenn Campbell

The Territory’s younger than average age profile - 34.5 years in Darwin compared with 38.4 nationally - brings its own advantages.

“So the workforce profile here is quite wonderful,” Mr Kuestenmacher said.

“You have a large proportion of the population that is not connected to the workforce that lives in remote corners when the economic opportunities are not necessarily a given so they can pump up GSP.

“The NT is a magnet for young people who want to have an adventure in the 20s or 30s and you should play on being a Territory, a capital city very attractive for young people.

“If you manage to convince these people to stay and raise a family here, it’s just increases the number of people the NT retains which is absolutely great because over the next two decades they will spend money like crazy.”

The final piece in the puzzle is housing - and there are no immediate, quick-fix or definitive solutions to that.

“Housing is a huge problem wherever you go,” Mr Kuestenmacher said.

“If you solve the housing problem, you will solve the population challenge.”

Demographer Simon Kuestenmacher will be a guest speaker at the Future NT luncheon on Friday, November 25. Buy your tickets here.