Australia's latest intergenerational report projects longer lifespans and slower population growth, while identifying artificial intelligence as a defining economic factor for the next 40 years.

Australia's Treasury has released extracts from its upcoming intergenerational report, which projects significant demographic and economic shifts over the next four decades. The report forecasts that life expectancy will rise for both men and women by 2065/66, while population growth is expected to slow to 0.9% annually. Additionally, the government identifies artificial intelligence as a central influence on the national economy, carrying both productivity potential and substantial risks.

Demographic Shifts and Life Expectancy

By 2065/66, life expectancy at birth for women is projected to reach nearly 90 years, up from the current 86. For men, the forecast predicts an increase to 86 years, compared to the current 82. Treasurer Jim Chalmers attributed these gains to Australia's universal healthcare system and advancements in medical research, while noting that the government intends to continue investments in Medicare and the Pharmaceutical Benefits Scheme. The nation's total population is expected to reach 39.3 million by the mid-2060s, which is 1.8 million lower than the 2023 forecast. This slowdown is primarily linked to declining fertility rates, as women are having fewer children and starting families later in life. The government aims to address this through policies such as subsidized childcare and increased paid parental leave.

The Role of Artificial Intelligence

The report characterizes artificial intelligence as the defining influence on the Australian economy over the next 40 years. While previous advice suggested that AI could drive significant productivity gains in both public and private sectors, Treasurer Chalmers emphasized that the government must work to minimize substantial risks associated with the technology. Prime Minister Anthony Albanese is currently in the United States to discuss a global framework for AI, advocating for cooperation between the US and China. Albanese noted that middle powers like Australia have a role to play in establishing international protocols, similar to historical agreements on nuclear non-proliferation. Meanwhile, US President Donald Trump has announced plans to appoint an AI tsar and create an 'AI Force' to monitor the technology.