So, everybody is piling on to this guy, but I would like to point out that although Australia is a very large area, it has a population only slightly larger than New York (the State). Perhaps that, combined with the general difficulty with ransom schemes in actually collecting the money in a way completely impossible to trace, might be what he was driving at.
There's no way around it. The statement was, to put it as kindly as possible, not the smartest thing to appear on the internet. The population is irrelevant in the context of his statement.
"... Australia is relatively small. Just drive over to his house." - this doesn't jibe with your supposition.
"... might be what he was driving at." - I see what you did there.