Continental drift as the nation coasts to a new lifestyle Bernard Salt looks at where Australia's population has shrunk over the past 20 years and finds the country's interior is being eroded. I AM a big fan of high-altitude demographics. This is the idea of canvassing the long-term perspective; it shows what businesses and what geographies have prospered over time. Take for example the accompanying map showing population change by local government area across Australia over the 20 years to June last year. This perspective is uncommon; it requires a series of technical adjustments to population estimates to account for council and other boundary changes. But what it reveals is quite extraordinary. Here is a nation that has profoundly changed its pattern of settlement within a generation. During this period, the Australian population increased from 18 million to 22 million. The map shows that much of the net additional population has concentrated in the capital cities and along the seachange coast. Here are municipalities where the growth rate has averaged 2 per cent or more a year over 20 years. The top three municipalities by this measure are the City of Perth, up from 4910 residents in 1992 to 19,990 last year, reflecting an average growth rate of 7 per cent a year, the City of Palmerston (Darwin), with an equivalent growth rate of 6.4 per cent per annum, and the City of Wanneroo (Perth), up 6.3 per cent a year over this period. This nation's big growth areas have mostly focused on the city and on the coast. Coastal municipalities that recorded a long-term growth rate in excess of 2 per cent a year include Townsville, Mackay, Gladstone, Hervey Bay, Sunshine Coast, Gold Coast, Port Macquarie, Surf Coast, Sorrell Peninsula (Hobart), Victor Harbor, Ravensthorpe (gateway to the WA goldfields), Denmark, Margaret River, Bunbury, Busselton, Geraldton, the Shire of Roebourne (Karratha) and Broome. There are few fast-growing municipalities in the interior of the Australian continent. And those that do exist comprise tree-change commuter localities such as the Yass Valley and Palerang, including the town of Bungendore outside Canberra. Mining activity has driven population growth in Wiluna in the centre of outback Western Australia, although the number of people actually living there remains modest. Wiluna shire's population increased from 433 in 1992 to 1212 last year, which is an increase of 180 per cent. The same logic applies to the Maralinga Tjarutja tribal lands on the western edge of South Australia. The number of mostly indigenous people living in this area jumped by 108 per cent, up from 36 to 75 over 20 years to 2012. The Maralinga nuclear testing site from the 1950s is evident as a single block-of-population-loss sitting within these broader tribal lands. There has also been strong population growth in the nation's north and northwest since 1992. But again this growth has been off a low base. The Kimberley, Halls Creek, Darwin and its satellite town of Palmerston, the entire coast of east Arnhem Land, the Gulf of Carpentaria coast and much of Cape York Peninsula have been rapidly settled with permanent residents. But the absolute numbers remain modest. In East Arnhem, for example, the local population increased by 60 per cent over 20 years, but this still amounted to no more than 11,000 residents by 2012. The largest town in East Arnhem, Galiwinku, contained 2100 residents at the 2011 census. However, the real issue for the Australian people isn't so much matters relating to rapid population growth, such as the delivery of affordable housing and infrastructure and managing congestion and environmental impact. These matters have been debated vigorously and tracked for some time. What is concerning about the accompanying map is the scale and extent of population loss from the interior of the continent. How does a state government deliver education, health, justice and community services in towns where the population is modest, sparsely distributed and declining? Previous generations of Australians explored, settled and indeed farmed much of the interior of the continent to the very margins of the outback. The current generation is seeking to redefine their relationship with the interior. We want the food, the energy, the resources, the commodities of the interior but it appears that we just don't want to live there. The rise of the fly-in fly-out workforce is testament to modern Australia's urban preferences and sensibilities. Or perhaps it's just that we don't want to live in the interior with the same passion and commitment that applied in earlier times. The cropping and grazing lands that extend west from the western slopes of the Great Dividing Range are especially vulnerable to the process of long-term population erosion. From Charters Towers and Longreach in the north through Bourke and Broken Hill in west of NSW, to much of the Riverina, the Wimmera, the Mallee and on into the Riverland, the Eyre Peninsula and the Upper and Lower Great Southern of Western Australia, as well as for much of the West Coast of Tasmania, there has been long-term population loss over two decades and probably longer. The driving forces behind this loss are varied. The relentless need for efficiency drives farm aggregation, especially in the wheatbelt. One farmer buys out the neighbour and the neighbour relocates to the nearest big town or to the coast. And a generation after WWII, there is re-amalgamation of Soldier Settlement blocks in places like Western Victoria. The Australian economy delivers more agricultural output today than it did 20 years ago; it simply requires less labour to do so. That structural shift plays out over decades. Fewer but bigger farms reduce rural population densities and diminish the viability of small towns. Plus there's a tendency for farming communities to drive further in better equipped cars to gain access to a broader range of services in bigger regional cities. There are 188 local government areas in regional Australia with 1.1 million residents where the population base has contracted by at least 1 per cent a year in the past 20 years. In Victoria's Shire of Buloke, centred on towns such as Birchip, Donald and Charlton, the population fell by 27 per cent from 8709 in 1992 to 6364 last year. In NSW's Bourke in the state's west, the fall in population was 30 per cent to 3027. I don't think anyone, least of all residents of the interior, want "propping up." The driver of the decline is the relentless global force of the need for farming efficiency and scale. Perhaps what is required are policies designed to encourage migration to towns with underutilised schools, recreation facilities, hospitals and housing. It might also be appropriate to focus attention on new models of service delivery that take into account the fact about one million Australian live in remote rural areas where settlement is sparse and dispersed. The Australian people cannot change the intrinsic nature of their continent, but we can learn to better live within its margins. Bernard Salt is a KPMG partner.