Australia’s Intergenerational Report Indicates Deaths Will Surpass Births

Australian Federal Treasurer Chalmers officially released the seventh Intergenerational Report (IGR) on Monday.

This 40-year economic and demographic forecast report indicates that due to a continued decline in fertility rates and rapid population aging, Australia will experience its first-ever death toll exceeding births in the 2060s. This means Australia will enter a phase of natural population decline already faced by many developed countries (such as Japan, Germany, and South Korea), with population growth becoming entirely dependent on overseas migration.

The report shows that Australia’s population growth rate will slow to 0.9% over the next few decades, down from the historical average of 1.4%. With a shrinking working-age population and surging demand for elderly care, the Australian economy has officially entered a “new normal” of low growth. Over the next 40 years, the average annual growth rate of real GDP per capita is projected to be only 1.2%, lower than the 1.5% of the past four years. The government’s fiscal burden will also increase accordingly, with public services and healthcare spending continuing to rise. It is projected that by the mid-2060s, government spending as a percentage of GDP will rise to 27.4%, facing a long-term structural fiscal deficit.

To address the demographic crisis and stagnant productivity, the Ministry of Finance is pinning its hopes on the comprehensive adoption of emerging technologies such as artificial intelligence (AI). Chalmers emphasizes that AI is “the biggest economic transformation in our lifetime,” and that technological change will be the most crucial driver if productivity growth can be raised from its near-zero levels in recent years to the historical average of 1.2%. The report outlines six major transformative challenges for the next forty years, including the AI ​​revolution, geopolitical fragmentation, energy transition, population aging and the care economy, industrial transformation, and intergenerational equity, urging the government to promote long-term reforms to maintain national prosperity.