14: What Does Post COVID Australia Look Like?

What Does Post COVID Australia Look Like?

Guest. Bernard Salt AM. Demographer & Social Commentator

Podcast Transcript

Recorded 16 Feb. 2022

Ross MacDowell (00:01):

Welcome to the Burgernomics Podcast, where we demystify the economics of events that shape your life. I'm your host Ross MacDowell. Today, we are podcasting from the library of the Royal Brighton Yacht Club Club in Melbourne, Australia, with a magnificent view of Port Phillip Bay. Our topic for a demystification today is, what does post COVID Australia look like? And to provide that demystification, my guest is Bernard Salt, one of Australia's best known social commentators and business analysts. Bernard draws upon demographic, economic and social statistics to provide a look into Australia's past and future.

Ross MacDowell (00:44):

But more importantly, he's one of the rare social commentators with the knack to make data come alive. So all Australians can understand the social and cultural changes reshaping their lives. Bernard is famous for providing new meaning to the millennial's favorite breakfast menu item, the smashed avocado. Bernard wrights for the Australian Newspaper on social, generational and demographic matters. Has written six best selling books, bringing many to demographics and generational change. You will have seen and heard Bernard commentating on countless television and radio programs. Bernard was awarded the Member of the Order of Australia in 2017. Bernard, welcome to the Burgernomics Podcast.

Bernard Salt (01:31):

Thanks very much, Ross. What a great introduction. Thank you.

Ross MacDowell (01:33):

Before we jump into what does post COVID Australia look like? Let's talk about you for a moment. I've heard you described a demographer, a social commentator, even a guru of bringing meaning to the Australian Bureau of Statistics Census, we all complete every five years. How would you describe yourself?

Bernard Salt (01:58):

Ross, this is one of the... I've written a column on this. It's one of the questions I dread at a dinner party and Bernard, what do you do? I never know what to say. Because you've seen those diagrams on social media where you have a number of intersecting circles, and then I'm in the middle. I'm not in any of the circle, but I'm sort of in the middle of a range of circles. And those circles would be bit of demography over here. History is very important. If you're looking, if you're fascinated with what's happened in the past and what will carry into the future, you got to understand that, some basic economics.

Bernard Salt (02:36):

I have a fascination with the Australian continent and the geography of Australia, my party trick. That's probably why I'm not invited to parties. I pretty much know every municipality on the Australian continent, about 550 of them. Where they are, what their demography is, what the town is like. I sort of got an idea of a community just in my head from the demography and history and geography. Often I'll get a phone call from the mayor of such and such, Hay Shire or whatever. And I kind of got it in my head before I even return the call. So the short answer to the question is, well, I'm a little bit of everything, but I am a master of nothing in particular. I sort of... I'm like mortar. I fit between a number of different pillars of insight and information.

Ross MacDowell (03:29):

You've copped some criticism regarding your description of the spending patterns of millennials by the smashed avocado effect. Do you think that the criticism pointed to a millennial generation, which had been too mollycoddled by their postwar baby boomer parents and have a tendency not to cope well with criticism?

Bernard Salt (03:55):

No. Look, I mean, I certainly have reflected a lot on the column. The column was meant as a tease of baby boomers who were moralizing precisely what you were saying there. So the target was really the baby boomers and not the millennials. But when it's taken out of a column and put into social media, then of course the context isn't communicated. Look, I do think that every generation has its skill sets and every generation has its challenges. And certainly, the millennial generation, if you look at their challenges, certainly in terms of buying a home and so forth, all of that has... means that that's the great challenge for that generation. So I regard it as there's pluses and minuses. And I find that also with different parts of Australia, which city would you prefer? Well, there's pluses and minuses with every one of those. And so I think that also applies to the generations.

Ross MacDowell (04:59):

In starting our conversation about post COVID Australia, let me throw a curve ball at you. As of February 15th, 2022. There have been 4,664 deaths due to COVID. Since 1907, there've been 26 years where death due to influenza and pneumonia have been at a similar level. There've been 14 years where deaths due to influenza and pneumonia have been at higher levels. Now that's not to diminish the suffering those thousands of people have felt who have lost loved ones. Why do you think we are seeing COVID as such life changing event?

Bernard Salt (05:59):

Well, I suppose if you were to measure, if the simple metric was deaths, then you're quite right. There are other times in history and there are other disease or afflictions that have caused more over time. But I don't think that is the metric by which Australians have been galvanized by the COVID experience. There has been nothing since the war where every Australian has been so focused, so galvanized for so long on a single issue, where both Melburnians... there's a time in 2020 and into 2021 where the ritual was at about 11:00 in the morning, you would hear the numbers discussed by the Premier. Fusing that number of people on a single event every day for the better part of two years is an enormously galvanizing and bonding, and in some sense, scarring experience.

Bernard Salt (06:53):

I mean, you could look at other factors during our everyday pre COVID life. Things like the Melbourne Cup, it's four minutes. The whole nation, 20 million people. What if we are 25 million people, should get that right, are focused on one event for four minutes. And it's a celebration. Well, if you take 26 million people and you focus pretty much their entire waking life for two years on this single issue of avoiding and managing and responding to and recovering from COVID, then yes, it's going to have a significant impact on the Australian people. You could say scarring, I think there has been some scarring that people have been... some people have been very badly affected. Deaths in the family, for example, or the loss of businesses, for example. I think relationships have come under strain. There's been isolation. With issue with Western Australia and so forth, family's not being able to reconnect.

Bernard Salt (08:01):

There is nothing that in 80 years, since the 75 years, since the war that has caused that effect for four years. And at ain't over yet. This to me looks like a three year experience. The Second World War was what? Five, six, something like that. The First World War was four years. And then the Spanish Flu after. If the simple metric is the number of deaths, then yeah, that's probably right. But that's not. It's the impact on a vast number of people by a single event that has dominated their thinking and behavior for two to three years. That is why it's such a significant event. And which is why I think that our behavior and our thinking and our values on the other side of this event will be very different.

Bernard Salt (08:51):

The same thing happened after the First World War. We lost 60,000 men in the First World War worth in a population of barely 4 million people. We lost 15,000 people the following year in the Spanish Flu. That's what? 75,000. But in the 1920s, was a very optimistic, positive time. And I kind of get that because if you through... if you stare at death in the face for four or five years, what do you want to do on the other? You want to celebrate life.

Ross MacDowell (09:21):

Sure.

Bernard Salt (09:22):

Thank goodness that is over. So you dance the Charleston and you create businesses like Qantas and like Woolworths, for example, very entrepreneurial. This idea of rebuilding a better version of the Australia we left behind, we saw that after the First World War, we saw it after the Second World War. I think we'll see it later in the 2020s.

Ross MacDowell (09:43):

So, I mean... For example, the First World War... and you mentioned, we lost 60,000 people. Those 60,000 people that we lost in the war amounted to between the ages of 18 and 44 years, five and a half percent of the Australian male breeding stock. That's incredibly significant effect on society for a huge period of time, not to be able to reproduce. And we showed the resilience to come through that. Do you think that this, in terms of as an event, will have a similar long effect?

Bernard Salt (10:34):

Well, yes. In fact, the First World War did... it reverberates down the decades, something like that. Very interestingly though, that you get through the First World War and about 10, 12 years later, then you have The Great Depression, which had a similar scarring effect. People who experienced the great depression, even as kids, talked about it. Seven decades later, it carries on. Second World War people talk about that. They'll talk about war rationing and so forth. So these things do reverberate down the decades. And I think we will see the same effect.

Bernard Salt (11:12):

It may well be that we're kind of wearing masks in public settings into the future. If you were to look at the MCG Grand Final at 2030 or 2040 and you panned across the audience, the crowd, I think you would see mask. People with masks. Whereas if you were to do that in any year prior to 2020, you would not. People were quite comfortable in a public setting. But this concern about infection I think will go forward. Greater use of hand sanitizer. I think that is certainly one thing that... I can't see why hand sanitizer wasn't positioned near the fruit and vegetable department of supermarkets for years beforehand. I kind of want like the thought that if someone's picked up this apple, that they've sanitized their hands beforehand. So there's a number of things that I think will carry forward.

Bernard Salt (12:09):

And a bigger picture level you'd say, well, I think coming out of this, Australians are far more focused on local manufacturing. It's only the pandemic that made us realize there's only one business on the Australian continent that actually manufactured face masks. The business just outside Shepperton, that sort of scaled up since then. But we need to be able manufacture whole range of product. This idea of outsourcing everything is great. When there are no threats or breakages in the supply chain system, I think Australians are going to be far more focused on manufacturing locally. And I think that's going to extend also to skills. We have been supermarket shopping for skills for the last decade and a half. If you want a data scientist, you go to Bangalore. If you want a welder, you go to the Philippines or whatever it is. That's fine, but we should be developing and investing in our young people more.

Ross MacDowell (13:11):

Can I take you back to what you were saying before about this supply chain? So as a country, we have become addicted to the price of items and we import a lot from China because it's the cheapest. We get a lot of things made in China because it's the cheapest. By going to a local supply chain to become more nationally self-sufficient, that's going to be more expensive. Do you think as a society, we can wean ourselves off, "I want the cheapest", to "I want to buy Australian because I want a security of supply chain?" Do you think that sort of attitude change would be easy?

Bernard Salt (13:53):

Prior to the Coronavirus, I would say no. We're focused on what is easy, what is simple and so forth. I think our calculations have changed. I think that we have reassessed where we are. We've seen a certain vulnerability in Australia and we need to... that there is a price to pay for that level of independence and self sufficiency. So I'm sure there's going to be some people who aren't able to afford that. That's fine. But those who can, I think will do so. And I think hopefully that will make a difference. That will strike a code and drive more investment in manufacturing.

Bernard Salt (14:34):

You can actually see it coming through even now, in greater growth in manufacturing in Australia. For 20 years, the manufacturing numbers have been declining. It was about 1.6 million people in manufacturing back in the 1980s. It was down to about 900,000 or so. It's now plateaued and just starting to recover. Those are approximate figures. But again, I think that Australians are far more focused now on issues of self sufficiency, resilience, and being more focused on investing in our people and in our nation going forward.

Ross MacDowell (15:15):

What other areas of resilience do you see that this is brought out in people that may have a more permanent change rather than a temporary change?

Bernard Salt (15:24):

Well, I will say that Australians, I think are a very resilient nation. And I'd point to the First World War, the way we recovered from that and from the Second and so forth. But I think it's more than that. I think we see evidence of it every summer with bushfires. Now we're the only continent really that suffers bushfires with the regularity and severity. So it is quite searing in terms of shaping the Australian culture. So there's bushfires every summer. You've seen the media vision, the television cameras come in and they show the smoking ruins and a homeowner is there standing amongst the ashes. And in the interview with the homeowner, they will say, "I'm going to rebuild. I'm not going to let this defeat me." And then they'll come back three months later, usually newspapers do this, and then take photographs of green shoots and rebuilding and so forth. And we've kind of become used to that. That after adversity, there is regrowth, rebirth, positivism about the future.

Bernard Salt (16:31):

The other example I'd give is... I track GDP change on a quarterly basis. I'm sure you do too. And there was a significant decrease in the June quarter of 2020 after the national lockdown. So 7%... the economy went back 7% in three months. In the next four months, it just shot out like a rocket, in fact. And I think this reflects the optimism of Australians. After the adversity, after the bushfire has passed, there is hope, there is aspiration and there is positivism for the future. We're not going to let this defeat us. We're going to rebuild and recreate a better version of the Australia, of the business that I left behind.

Bernard Salt (17:18):

And whether in fact it's a colonial naivety about the future that we just think the future's always positive, but I do think it's a quite Australian... uniquely Australian trait. And I think we're seeing it in 2022. We just need to get past Omicron. And then beyond that, we will rebuild and recreate with that very optimistic sense.

Ross MacDowell (17:41):

What do you see as being some of the green shoots? I mean, you use the analogy of the newspaper revisiting the person who saw their home burnt down in a bushfire and they rebuilt the house. What do you see as being a similar analogy for having got through COVID?

Bernard Salt (17:58):

Well, the place where I'd love to see green shoots... I don't think there are many green shoots at the moment, that is, in the CBDs and particularly, of Melbourne. But I think they were at ground zero of this. But if you go to the suburbs and there's a lot more energy, there's a lot more activity. If you look at home builders, home constructions, home renovations, home investment, home furniture, home technology, people are investing, they are building, they are nesting, in fact. And these are people that have reserves of cash, that are actually investing in the Australian quality of life and so forth.

Bernard Salt (18:38):

Once we get through the worst of COVID, we feel that that can't be too far away. March, April, May, should be part of that. I expect then to start to see the CBDs away. That's almost like they're in hibernation at the moment. And the question will be whether they recover to 100% of where they were in March, 2020, or whether they only get to 75% or 80%? I actually think it's going to be a staircase right throughout 2022. And maybe by the end of this year, we'll get back to maybe 90%. It's still going to take a while to get that last 10 percentage points. You need visitors, you need students, you need to confidently change the patterns of behavior and buying patterns and travel behavior of the Australian people. So I think this year is going to be progressively better, but never quite getting back to where we were three years ago. That will come in 23 and 24.

Ross MacDowell (19:41):

You mentioned the CBD. Everybody has a point of view about working from home, working in the office. And I guess the points of view reflect on the individual's own situation. Where do you think in the long term, the working from home situation will be? Do you think that people will want to work from home from the next five or six years because they're so happy not to get in peak hour traffic, but then they start to realize they miss the social qualities that the workplace provides, or perhaps they think that someone else who's spending more time at the workplace is getting advanced quicker and earning more money? Where do you see it all eventually falling to?

Bernard Salt (20:36):

Well, working from home is certainly a topic that I've been tracking for quite some time. And by quite some time I mean 25 years. I can go back to the 1996 census for Australia. And the question on the census is, did you work from home today? Not, are you sick or anything like that? Did you work from home? And in 1996, the proportion of Australian workers, who said they work from home was 5%. That did not change. 2001, 2006, 2011, 2016, 5% of workers kind of work from home anyway, authors or whatever they are. During the pandemic, I think particularly in Melbourne and less so in other cities, but especially in Melbourne, I think got up to 50%, maybe even a bit more.

Bernard Salt (21:20):

Some workers can't work from home. The question is, will it revert back to 5%? And I say it won't. I say it'll go back to 10% or 15%. At 15%. That's a 10 percentage point shift in the long term proportion of workers working from home. A 10% of the workforce is 1.3 million workers who in a long term sense are now working from home. And the question is, well, why would they do that? Why wouldn't they go back to the office? And my response is they will remain working from home because that connects with a core Australian value, and that is the pursuit of lifestyle. It offers a better quality of life.

Bernard Salt (22:03):

So if you were saying to millennials, for example, COVID is over. Now you can go back to commuting from Cranbourne to the city center, or Penrith from the city center or Caboolture to the city center, five days a week for the next 30 years of your life. Millennials will say, "I can't do that. There is a better model. There is a hybrid model." And they're exactly right. So I think there is a 10 percentage point shift that will create this hybrid arrangement as a long term arrangement going forward. We have the technology, there has been the universality of it.

Bernard Salt (22:44):

If you were just trying to initiate this as a one off with one business, it would never have got off the ground. But the entire workforce encouraged to do it in Australia and beyond, and not just for a month, but for two plus years, then we have created a pathway, created a precedent, created the learning of new technology that some people, 10% I'm saying at best, will say, "You know what? This is a better arrangement for me rather than commuting an hour in and an hour out every day. It's kinder to the environment, better for my mental health and a more productive." They will say. Not everyone, but that 10% figure is what I'm thinking.

Ross MacDowell (23:32):

There's a lot of senior management out there currently that are saying they would be happy to have their employees back in the office, but they feel because we're at a situation in the economy now where we're at full employment and the workforce has been empowered because we are short of workers, they can choose their work circumstances and that forces upper management to agree with that. Do you think that if we were to ever come out of a full employment situation and maybe the worker is less empowered as he is at the moment, things may change?

Bernard Salt (24:27):

No, I think that we've discovered a better way. And the other argument that management will have in discussions will be actually, you know what? I think we can let go one of the office floors in the CBD and that cost goes directly to their bottom line.

Ross MacDowell (24:51):

Which some of the banks I've noticed have already done in Melbourne.

Bernard Salt (24:55):

Yeah. So look, we are giving you your freedom. You deliver your workplace value, however and wherever you wish, just as long as it's up to standard. Plus, the idea of living in the suburbs and commuting to the city center, being there by nine o'clock when the boss comes in and being there at five o'clock when the boss leaves or whatever. No, it's a very... It's almost feudal. It doesn't suit modern values, modern lifestyles, the modern thinking about the individual. If you blossom best in your lounge room at five o'clock in the morning, writing something or doing an audit or whatever it is that you're doing then, so be it. You are measured not by the protocol of you being in the office and being all deferential to the hierarchy there, you are measured by what you produce. True meritocracy. When you think about it, you think, well, as long as you produce what you're meant to produce and it's too standard and on time, I should be able to deliver my workplace value wherever and however I like.

Ross MacDowell (26:02):

What do you see as being the skill sets that may come to the fore post COVID pandemic that maybe weren't as appreciated before?

Bernard Salt (26:14):

Well, I suppose it's heightened a skillset that people talked about before, and this is the issue of agility. The ability to be unfazed by change. There's been a company restructuring and we've changed the departments and reporting lines. And here is the automation, the technology and the computer programs that you need to learn. And we have reassessed you to this work group here. Meeting your new colleagues in the foyer and whatever. And if you are old school, you think, oh, all this change. I mean, I don't know those people. I have my established relationships and ways of doing things. And I'm threatened by... they won't say this. They'll say, they're feeling very uncomfortable about this new arrangement.

Bernard Salt (27:09):

Whereas if you say, yep, no worries. That's fine. Introduce yourself to new people, learn new skills, lean into the challenges, then you will adapt to the workplace auction that is evolving in the future. The future belongs to the skilled, to the agile, to the sociable and to the unfazable. So if you are friendly, unfazed, happy, adaptable, lean into learning whatever new technology you need to learn, then you will fit in. And you need to understand that, okay, that group and that technology might exist for maybe three or four years. And then there'll be a new group, in a new location, using new technology with new reporting lines that you need to adapt to as well.

Bernard Salt (28:01):

In some respects, people used to say that a 22 year old coming out of university today might have say 16, 17 different jobs effectively in their sort of 30 to 40 year working life. The skill that you need is not to have a first class engineering degree or a statistics degree or whatever it is. The skill that you really need, if you are going to have 16 or 17 jobs or more across your life, is the ability to connect with people, build relationships, build the networks and articulate your case. That means if you do have 17 jobs, that means 17 times, you've got to go into an office at the very least, sit down across from someone and speak about yourself, pitch yourself, sell yourself, upsell yourself. The skills there are being articulate, self confident and friendly and agile. They're the skills that I think you will need.

Ross MacDowell (29:06):

Some of those things you've talked about, these social skills, how do we reconcile that where people want to be at home with the wife and the children, or at home in the one bedroom department or whatever their circumstance? How do they get the opportunity to use those social skills if they're not going into a workplace or they're not in situations with their work with other people?

Bernard Salt (29:37):

Well, this is where I think the nature of work will change. In that, you might be home in your Zoom room for say four days a week, but one day a week, you go into the office or into the workplace. And when you go into the workplace, you won't be sitting there writing a report, you'll save those tasks for a home day. When you're in the office, you'll do training, you'll do collaborations with colleagues. You might meet and schmooze clients. So a workday is actually concentrating five days of sociability and connectivity with professional, other people in your workplace, into one day. So my view of the future is that people won't be working from home five days a week, 50 weeks of the year or whatever it is. They will actually do that hybrid.

Bernard Salt (30:27):

And the CBD therefore revolves into almost like sort of a training, meeting, celebrating schmoozing, almost campus environment. I mean, what's the point in traveling an hour into the city center, going to your office, sitting in a cubicle and writing a report for seven hours. There is no point to do it. If you're going to do that, you would do that on a home day, the CBD becomes even more heightened in terms of celebrating, communicating, connecting, and learning and whatever. So, workplaces might have sort of lecture halls or celebratory type spaces or collaboration type spaces, individual breakout type spaces.

Ross MacDowell (31:15):

Okay. And on the other part of it, when we are working from our home and we are judged on our output, that's going to be a very metric orientated situation, isn't it? Can you see a whole industry now being developed of judging worker productivity through a whole different set of new metrics that are superimposed on someone that could be working hundreds of miles, thousands of miles away to ensure that they're giving value to the company?

Bernard Salt (31:50):

Well, I suppose there are. I can't think of the type of occupations. You're either producing the goods or you're not. From my point of view, it's either you're writing reports or producing presentations or writing columns, or you're not. So it's very easy to metricize that. That might be more difficult in other types of occupations. But I think workers will understand if you want the flexibility, the freedom, sort of the streamlining of your life of not commuting five days a week, then there is, you do need to deliver value to the workplace that needs to be measurable. And turning up to an office and sort of saying the right things, turning up to a meeting and sort of ticking a box that you were there, but not contributing. And there's ways that you can play that game in the office as well, where you can turn up and effectively do nothing. But at home, I think that you actually do need to produce something for your own sake to justify your salary, your income, and to feel that you are a valued member of that team.

Ross MacDowell (32:59):

You and I so far, have been talking about working for, and we've used the word many times, the company, the office. We're talking about working for other people. We're talking about working for larger organizations. It brings up the concept of the corporation, which is something that came to the fore, and certainly in the 1950s and developed in the '60s and the '70s. Do you think COVID will change the concept of the corporation going forward and that it will still be the such a predominant commercial entity in our society or do you see COVID plus other things such as entrepreneurial activities diminishing that almost fatherly effect of the corporation?

Bernard Salt (33:57):

Well, there's no doubt big corporates are very important to the Australian economy as they're to many economies. And we have now the big banks, the big mining companies, the big retailers, for example, and my experience with them is, they know that they're moving, they're adjusting, they respond to their market. They respond to their employees. They adjust as they need to. I'm not convinced though, that millennial aspiration regarding the corporation is the same as the baby boomers.

Bernard Salt (34:31):

Back in the '80s or '90s, the idea was to work for a blue chip company, I suppose. Whereas I think the millennials in the 22 will say, well, actually forget the blue chip company. I want to be involved in a startup. I want to be in my own business. There's quite an entrepreneurial energy coming out I think of that generation. And I think that's actually a good thing. We need to be highly entrepreneurial. The Americans are exceptional at this. If you look at the 10 biggest businesses in America today, about six of them were created in the last generation, from Microsoft right through to Facebook and others. And they were created in a garage by an individual.

Bernard Salt (35:14):

We don't tend to have our top 10 businesses... The one that I would point to is Atlassian, I suppose. But the others have been around for 50, if not 100 plus years. We need not just to be good at startups. We need to be better at scale ups so that we can actually take a good idea, which we seem to be very good at and then scale it up on the Australian continent, not sell it out to America or to Silicon Valley or whatever. And again, that comes back to our... this idea of a more self-sufficient Australia.

Ross MacDowell (35:54):

What are we lacking? Why can can't we do that?

Bernard Salt (35:57):

Well

Ross MacDowell (35:57):

I mean, you would think that here we are, we're an island, we're in the bottom of the world. We're meant to be incredibly self-sufficient. We're meant to be self generating, et cetera. Why is it if we're such a smart country, why can't we go ahead and develop things.

Bernard Salt (36:12):

Well, there was almost like a colonial thing, I think it's also applied to New Zealand that, here we are tucked away on the other side of the world or whatever, and aspirational people, from the 1960s, they'd want to go to London and now they want to go to Silicon Valley or New York or something like that. And in a highly globalized world where there was the freedom of movement and flow of traffic and whatever, ideas and fashion and talent would drain to the most attractive destination. So if we created a business here, then selling it out to the Americans and moving over there was seen as a progress. It was almost like a colonial view of the world.

Bernard Salt (36:56):

In a post COVID view of Australia, I think that that logic breaks down. Do you really want to go to Silicon Valley? Do you really want to work in London? Do you really want to work in New York? I don't think has the same allure to as many people in a post COVID world from Australia as it was pre COVID. So I'm hopeful that that startup energy that we are so good at will increasingly find a scale up home opportunity here rather than having to go offshore.

Ross MacDowell (37:31):

Right. Let's talk about Australian houses because during COVID, we spent so much time in our houses. Australians have seen more than any other country in the world, to designate a room for a period of time within a generation. We had the rumpus room. We had the media room. We've had the man cave of recent times and the parents' retreat. And now the Zoom room.

Bernard Salt (38:15):

The Zoom room. Oh Look, I heard that in October, 2020. And I was chatting with a real estate agent online, it was a presentation, and he said, "Oh, new things are happening. People talking about, they want a Zoom room." And he just mentioned it in passing. And I thought, Zoom room. I love that. I'm going to grab that and make that known right across Australia. Darryl Kerrigan had the Pool room, we have the Zoom room. But our homes are very plastic, very pliable, malleable. They change with each generation. If you think back to the kind of house. I didn't know the house you were brought up in, I was brought up in a very basic house in country Victoria, three bedrooms, one bathroom, outside loo, all that sort of thing. And there was a 'good' room at the front of the house.

Bernard Salt (39:06):

And the 'good' room was a good room. And it had side stand with... you put your swimming trophy as well. And the good room was for guests and suitors. Suitors never got near a bedroom back in the 1950s. Today, it's four bedrooms, not three. It's two bathrooms, not one. It's two income earners, not one. And it's more likely to be two kids, rather than four or five or six. And the configuration of the house is shifted.

Bernard Salt (39:40):

So you don't have the good room at the front, which was designed to hold guests from going further into the house. Our logic is no, we want to take our guests right through the house to the good room at the back to showcase our wealth and prosperity. This is important to us. Which has meant that you go past the open doors to the bedrooms, which means the bedrooms now need to be glimpse perfect, which has led to the pillowfication of the bedroom. You've got six pillows and little square one set to diamond effect and needs to be exactly right.

Bernard Salt (40:15):

And then at the back, you meet around an island bench. Which I think that sort of indoor outdoor living was introduced to us by the Greeks, the Italians, who brought Mediterranean lifestyle and quality of life and aspiration to Australia. We even kiss each other on the cheek, and what we eat and that indoor outdoor quality of life. The back veranda has now been made over as Al Fresco. It's sort of a place in the family home. So the home is like the Australian people. It changes, it evolves, it emerges and the Zoom room is the latest iteration of that.

Ross MacDowell (41:02):

Can you see Zoom rooms then in terms of what you've described, people wanting to show their affluence, becoming more a reflection of the aspiration of the person? Many of the Zoom calls that I've had during COVID, I've been surprised by some of the quite meager furnishings that many people have had.

Bernard Salt (41:27):

Every Zoom call I am on, the first, I never look at the person. I check out their Zoom room background,

Ross MacDowell (41:33):

Try and read what books at the back.

Bernard Salt (41:33):

Yeah. Exactly. What's their background.

Ross MacDowell (41:34):

What are they reading. Yeah. Yeah.

Bernard Salt (41:39):

And so, yes, I've noticed over two years of Zoom calls that the Zoom room quality is sort of ratcheting up as is the lighting and the microphone. I think people who work from home by 2020 will have all of the television skills of a tonight show host by 2030.

Ross MacDowell (42:01):

That goes back to what you are saying about presentation skills-

Bernard Salt (42:04):

Oh, yeah.

Ross MacDowell (42:05):

... and pumping yourself up and being able to-

Bernard Salt (42:07):

Pitching yourself.

Ross MacDowell (42:07):

... present yourself out there.

Bernard Salt (42:08):

Yeah.

Ross MacDowell (42:10):

I am somewhat amazed at many of the Zoom calls that I have, where I'm dealing with maybe senior people and I'm thinking-

Bernard Salt (42:18):

You're a senior person. This is not good enough. This is not up to standard.

Ross MacDowell (42:21):

Well, I'm thinking just in terms of sound quality or the quality of their picture, I know that they've got a whole department full of technical people that could advise them on how to present yourself better just from a technical point of view, sound quality and a vision quality. But for two years, three years, they never availeded themselves of that. And I-

Bernard Salt (42:44):

Well, there's a business opportunity here, Ross. And this is 'Zoom Rooms Are Us.' So this is, there's got to be people in the big corporates or whatever, where the CEO, the CFO, board members are at home, we're on Point Piper , Toorak all that sort of thing. And they need someone to come into their home and say, "Look, this is the best room. Here is what you need. You need this camera. You need this lighting system. You need this microphone and you position yourself here and your image will look like this. And all you need to do is learn how to switch it on." To me, there would be people say, "I want one. I don't care what it costs. I will have it."

Bernard Salt (43:30):

So I think there is that opportunity. Plus, I've seen just the quality of people's backgrounds, positioned potted plants and artwork and all of that, very, very important. There's a terrific site on Instagram called Rate my Room.

Ross MacDowell (43:46):

Oh, really?

Bernard Salt (43:47):

Which sort of takes random headshot, screenshots of television, people being interviewed and then they'll say... they give them points for library or artwork or lighting or whatever.

Ross MacDowell (43:59):

What a great idea. I can just see that. Even if people... in a selling situation from their Zoom room, they're yet to really employ the green background, which allows them to then have a graphic put out of their computer to portray their company or the product they're selling or whatever is the message they're trying to get across. They tend not to do that.

Bernard Salt (44:23):

Yeah. There was a brief flurry of activity about a year in where people went to the virtual background, but it sort of... as you move around, you can actually see that it's virtual and it's a bit... you need to be authentic. If you are speaking to someone, you need to see that there's some books behind your artwork or lamp. And you need to be, here is me in my home as a opposed to, I want to hide everything behind me. I think people want to see an authentic setting. So I never use virtual backgrounds for that reason. You kind of need to look like the person people expect you to look like.

Ross MacDowell (45:06):

Okay. Post COVID, I think is an interesting place for Australia, economically. Some amazing economic things have happened during and because of COVID. We've got an economy that really is exactly where we've been wanting it to be for a long, long time, since 2008. Magically, the Reserve Bank's targets of inflation have been hit, where we've gone from hardly any inflation now, to probably jumping over their targets of 3%, to 4%, so much so that they're going to stop quantitative easing and full employment has been met. We have a savings rate that pre COVID was 5% of all household incomes were saved, which spiked at 22% during COVID, which is probably because they couldn't get out to the shops to spend the money. But now it's settled at 11%.

Ross MacDowell (46:19):

Australians have never had so much money sitting in their bank accounts and Australians have never felt so confident that they've taken on so much debt with their houses. So we are in a situation now where we have some of the highest household debt levels in the world. Certainly, some of the highest saving levels in the world. We don't have enough workers to be able to produce the goods and services that this incredible amount of $230 billion sitting in household bank accounts, which can be weaponized to go and spend. The workers. There aren't enough workers to produce it and migration has stopped basically so that we can't get new workers in.

Ross MacDowell (47:15):

And economically, there's only one way to go with that situation. We then start to have inflation. And inflation due to people can't produce, supply chain issues, we as a society start bidding up the cost of the goods and services that we are chasing with an incredibly high amount of money sitting in the bank. This leads to an increase in interest rates. And so the economic story goes, people then start to become concerned, 'can I meet my mortgage payments?' which they can in the short term because they've got so much money saved up, but in the longer term, it becomes a bit of a frightening scenario.

Ross MacDowell (48:03):

Where do you see economically and socially, us going after COVID because the landscape has changed? We've been bred to think, we needed all this money from the government. $98 billion in Jobkeeper, $35 billion in cash flow support to businesses, we've had 30 years without a real recession.....yes, we had a slight technical recession, but we've had a whole generation or a couple of generations, that are only used to economic prosperity and things going up. But now maybe we're at a situation where we're at the end of a business cycle of prosperity and things are going to get tough. Where do you think we might be headed?

Bernard Salt (48:53):

Well, couple of those metrics I think, are not going to play out for years into the future. For example, immigration, flights are opening up towards the end of February. So backpackers and seasonal workers and students will be able to recover. So there are going to be some changes to the labor supply for the second quarter effectively, of this year. So that's certainly going to help. It's not going to relieve it entirely, but certainly going to help. The other response is that I think we're to see a surge towards automation and mechanization. You can even see it in things like restaurants, where very cleverly, they're moving towards a system where you need less waiters or less staff. So you download the QR code, here's the restaurant you've placed your order. And so you can actually deliver a service with less labor when you are placed in that position. You think actually a lot of that... a lot of those changes will carry forward.

Bernard Salt (50:07):

The use of apps I think is quite interesting. We have learned how to download apps. Started with the COVIDsafe app, completely useless, two years ago. But the dividend is that it taught middle Australia, baby boomers, how to download an app. And then you download your myGov and then your vaccine certificate and your... the QR code and upload it to your Apple Wallet. Middle Australia's become far more technically proficient. And as a consequence, is going to bypass a lot of those areas where we needed a lot of labor. Won't reduce the need for that entirely, but it'll just take the edge of it.

Bernard Salt (50:51):

Plus, if we open the borders from February, March onwards, then the labor pools will start to rise. But it's a bit like putting a garden hose into a pool to fill it up. It'll take a year for that to actually make a difference. The great challenge in terms of skills and services, I think is in fact, going to come in the back half of 2022. The Australian economy and labor market is a little bit like a sophisticated car engine. You've seen pictures of those car engines with hydraulic hoses, drinking air and oil and whatever else they do yeah into making all the fluids work. If you kink those hoses, then everything just seizes up. We kinked those input hoses, cutting off students and backpackers and seasonal workers and immigrants and tourists. That's five hoses we cut or kinked two years ago.

Bernard Salt (51:49):

Now at the end of two years, that's starting to show. You can get away with it from six months, 12 months, something like that. But in the second and third year, unless you unkink them, then the economy starts to seize up. And that's your argument. My argument is, yep, the worst of that will be the first six months of 2022. It will start to ease in the back half of 2022, 23, because the hoses have been unkinked.

Bernard Salt (52:17):

The other argument about rising interest rates. Well, yes, that is of concern. And I think it's very... I'm sure it's the back of the mind of everyone who's bought property over the last two years, no doubt at higher prices than they had hoped. But hopefully they can manage that going forward. It's not something that would not have occurred to them when they bought those properties, is my hope at least. But there's no doubt there's going to be some people that are caught by that.

Ross MacDowell (52:51):

All right. Now, toward the end of the podcast, I always ask my guests to apply their specific expertise to a hamburger. This is someone recently said to me, "Ross, I call that the dumification part of your podcast."

Bernard Salt (53:15):

It's great.

Ross MacDowell (53:17):

... where you are forcing intelligent people to come to a hamburger and try and mold it. How do you see... the relationship of post COVID Australia, what effects it may have on the simple hamburger?

Bernard Salt (53:34):

Well, the hamburger, I'm assuming you meant a hamburger shop. I won't use brand names.

Ross MacDowell (53:38):

Sure.

Bernard Salt (53:38):

If you go into a hamburger shop, you go to the counter, you order, you wait your turn and they call out your order and then you pay and then you take it somewhere and eat it. I'm not interested in the hamburger. I'm interested in the process by which you order that, get that and consume that. How can you do that with as little touch points with another human being as possible? A bit like going to the airport. Even if you were to go overseas through immigration, you can almost do that these days, when the flights open again, without actually interacting with another human being, because they have automatic face recognition.

Bernard Salt (54:18):

And also when you're checking your luggage in, they don't want to have a person doing that for you. They want you to learn how to do that yourself. So you come into the store, assuming you don't want it delivered to home and you would actually have it pre-ordered by app. So this burger place has an app. Download the app. You give your name, your connections, your geography, all that data is then mined by the person that runs that business. You've got to pre-order, you've got a delivery time. You turn up to the delivery pace, you scan in your confirmation number, take your burger and eat it somewhere else. And you are then taught to clean up after yourself.

Bernard Salt (55:00):

How many people do you need to run that burger place? As little as possible. That is the principle that I would see. Now that works for a burger place. Does it work for a swanky restaurant? The whole thing at a swanky restaurant is, hi, my name is Bernard. I'll be your waiter tonight. And here are the specials or whatever. I always thought, just give me a list. I don't want to listen. I don't want to sit here listening to you tell me what, because I'm not interested in entrees or whatever, I want... But that's all part of the theater, I suppose.

Bernard Salt (55:34):

I think that's going to be difficult. I'm not quite sure how that very labor intensive, almost theatrical experience, is going to be changed by COVID. Not quite sure on that one.

Ross MacDowell (55:48):

That's a very utilitarian way of looking at that, because then people will judge businesses and services exactly on the product as opposed to anything surrounding the product.

Bernard Salt (55:58):

Oh, frictionlessness, that's what people want. That's why Uber, I think, has triumphed over the taxi. You order, you can see it coming. You get in, you get to your destination. You don't have to wait around and do that. But I want a burger basically, I'm not after an eating experience. If I want an eating experience, I'll go to another place. But if I want a burger, I want in, out done and clean. And that's the experience that I want. How can I create as frictionless interactions as possible?

Bernard Salt (56:34):

But also applies with a lot of shopping things as well. If you're going to buy a new suit or dress or something like that, make sure you go into a store and you try this on that one. But if you want printer cartridges, then no, I'll just... online done, delivered to your door. That's what I can see. That in a post COVID world, business will cherry pick, consumers will cherry pick. That product, that product, that service can be automated. And I'm quite comfortable in that space because I now know how to download an app and interact with an app. My millennial kids taught me how to do it and I'm very pleased with self and I'm looking for other opportunities to appify my life.

Ross MacDowell (57:16):

Appify. Bernard, thank you. It's just great to hear your vision of the future. And it's great to hear the positiveness that surrounds it.

Bernard Salt (57:25):

Thanks very much, Ross. Thanks you.

Ross MacDowell (57:41):

My thanks to those who made today's podcast possible. My guest, social commentator Bernard Salt AM whose organization, The Demographics Group, can be found at tdgp.com.au and whose fantastic columns appear in the Australian Newspaper. Andrea Clarke, author of the best selling book, Future Fit, and whose training organization is retained by leading Australian companies to ensure their employees are positioned to drive their careers forward. You can find Andrea at futurefitco.com.au. And Ology Creative for their design inspiration and providing our social media graphics. It's worth checking out their website, ologycreative.com.au, just to look at their amazing logo animation. All of these links will be in the show notes. Please subscribe to the Burgernomics Podcast on your favorite podcast channel and follow us on Twitter, Instagram and LinkedIn to find out what topics are coming up.