The Treasury's latest intergenerational report, set to be published in full on Monday, projects that life expectancy at birth in Australia will reach 89 years for women and 86 years for men by 2065/66. This marks an increase from current levels of approximately 86 years for women and 82 years for men.
Key drivers of rising life expectancy
According to Treasurer Jim Chalmers, Australia's universal healthcare system and the impact of medical research are the primary drivers of this increase in life expectancy. The report makes the case for further investments in Medicare, the Pharmaceutical Benefits Scheme, and the recent rollout of urgent care clinics.
The projections indicate that more Australians will live into their 90s, while households are expected to shrink in size over the coming decades.
Population growth slowdown
The report also forecasts that Australia's population will be slightly lower by the mid-2060s than previously estimated in the 2023 intergenerational report. Population growth is expected to slow to 0.9% per year over the next four decades, down from 1.4% annually in the previous 40 years.
The nation's population is predicted to reach 39.3 million by 2065/66, which is 1.8 million lower than the 2023 forecast. Much of this slowdown is attributed to lower fertility rates, as women continue to have fewer children.
Government response and fiscal outlook
Chalmers noted that almost half the decline in fertility rates is due to fewer people having three or more children, reflecting a trend of mothers having fewer kids later in life. He stated that the government's role is to make it easier for people to make that choice if they want to, citing Labor's policies to subsidise childcare, increase paid parental leave, and lift mandatory superannuation contributions.
Speaking on News24's Sunday Agenda program, Chalmers acknowledged that while there are confronting elements in the report, it is not pessimistic. He emphasised that Australians are well placed and prepared for the accelerating changes ahead.
Future government debt is expected to be reduced by half a trillion dollars compared to forecasts in the 2023 report, but much of this economic progress relies on emerging technologies such as artificial intelligence. Chalmers noted that the fiscal story is somewhat better, but significant work remains to manage ongoing pressures and risks.
Previous Treasury advice has suggested that AI could provide significant productivity gains across the public and private sectors if Australia keeps pace with the global shift towards the technology.
