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Deaths to Outnumber Births in 40 Years, Intergenerational Report Warns

Treasury's seventh long-term outlook projects an ageing population, lower economic growth and the rise of artificial intelligence

By LineZotpaper
Published
Updated
Read Time2 min
Sources4 outlets
More Australians will be dying than being born within 40 years, according to the federal government's latest intergenerational report, which lays bare the fundamental challenges of managing an ageing population amid rapid technological change and lower economic growth.

Treasury's seventh Intergenerational Report (IGR), released on Monday, projects that Australia will reach a demographic tipping point in the 2060s, with deaths exceeding births for the first time. The finding underscores the pressures an ageing population will place on the nation's workforce, health system and fiscal position over the coming four decades.

The report also forecasts that life expectancy at birth will reach 89 for women and 86 for men by 2066, meaning more Australians will live well into their 90s. Households are expected to shrink as the population ages and fertility rates remain low.

Separately, the IGR outlines how Australia stands at the cusp of a new and uncertain age of artificial intelligence that will shape both the economy and society through to the 2060s. The government has not yet detailed specific policy responses to the AI transition, but the report frames it as a major structural force alongside demography.

The IGR is published every five years and projects the long-term impact of government policies. It does not prescribe policy but serves as a warning to successive governments about the sustainability of current settings.

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Analysis

Why This Matters

  • The crossover point where deaths outnumber births signals a permanent shift in Australia's demographic structure, with fewer working-age people to support a growing elderly population.
  • Lower economic growth projections mean governments will have less fiscal room to fund aged care, health and pensions without raising taxes or cutting other services.
  • The report's focus on artificial intelligence highlights a second major uncertainty: whether AI will boost productivity enough to offset demographic headwinds, or create new disruptions.

Background

The Intergenerational Report is a Treasury publication produced every five years since 2002. It models the long-term fiscal and economic outlook under current policy settings, assuming no major policy changes. The seventh edition arrives as Australia's population ages due to the baby boomer cohort entering retirement and sustained below-replacement fertility. Previous reports have consistently warned of structural budget pressures, though governments of both parties have often deferred the hard decisions.

Key Perspectives

Government (Treasurer): The report is framed as a sobering but manageable challenge, with AI presented as a potential productivity game-changer that could offset some of the demographic drag. Economists and fiscal watchdogs: Many will point to the need for tax reform, higher retirement ages or cuts to middle-class welfare to make the budget sustainable. The IGR's baseline assumes no policy change, making its warnings deliberately stark. Critics and social advocates: Some may argue the report overstates the burden of an ageing population and underplays the benefits of longer, healthier lives. Others will question the optimistic assumptions about AI's economic impact, noting past productivity booms have not always materialised.

What to Watch

  • The government's response to the IGR in the upcoming budget — particularly any signals on pension age, superannuation tax concessions or aged care funding.
  • Migration settings: the report's population projections depend heavily on net overseas migration, which the government can adjust to slow or accelerate demographic change.
  • AI policy developments: whether the government follows the report with a dedicated AI strategy or regulatory framework to manage the transition.

Sources

Zotpaper

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