AUSTRALIA should plan for a new city, like a Gold Coast of the west, to cope with the population boom predicted by 2050, says the demographer Bernard Salt.

The country has the resources to accommodate a projected 35 million people but Australians will have to get smarter about where and how they live.

''It will require a significant modification in the way we have settled the country and our lifestyle,'' the KPMG demographer said. ''It might also be appropriate to look for a new city up north, in the same way that in the last 50 years we've created the Gold Coast.''

The rainfall and agriculture of the Pilbara and the Kimberley made it suitable for more intensive development, he said.

The Prime Minister, Kevin Rudd, stoked the population debate by warning of a squeeze on the health system as baby boomers aged. The Opposition Leader, Tony Abbott, weighed in, questioning the sustainability of increased migration.