Australia's latest intergenerational report projects that deaths will outnumber births by the 2060s and forecasts a new era of slower economic growth.

Australia's seventh intergenerational report (IGR) projects that the nation's population will continue to age, with deaths expected to outnumber births by the 2060s. The analysis warns that the economy has entered a period of lower growth, driven by a shrinking share of working-age people and declining fertility rates. Treasurer Jim Chalmers stated the report highlights significant global and generational risks while emphasizing the potential role of artificial intelligence in future productivity.

Economic Projections and AI

The report forecasts that real GDP per person will grow by approximately 1.2% over the next 40 years, a decrease from the 1.5% growth seen in the previous four decades. This outlook assumes that productivity will return to its historical average of 1.2%, a goal the government expects to be supported by the adoption of artificial intelligence. The report describes AI as a pivotal factor in achieving long-term labor productivity growth.

Budgetary and Demographic Challenges

The IGR identifies six major transitions for the next 40 years, including the AI revolution, geopolitical fragmentation, the energy transition, and the care economy. Government payments as a share of GDP are projected to rise to 27.4% by the mid-2060s. The report notes that maintaining a sustainable budget will require ongoing reforms to manage spending and revenue challenges as the population ages and the tax burden on a smaller share of workers increases.