Australia's population is aging faster than anticipated due to a declining birth rate, with the median age projected to reach 45 years by 2066, up from 38.5 today. The federal government’s intergenerational report forecasts that births will outnumber deaths in the coming decades, making migration the sole driver of population growth. This demographic shift will significantly alter Australia's workforce composition and economic landscape, increasing demand for healthcare services and aged care. By the 2060s, the number of Australians over 65 is expected to grow by 87%, while those aged 85 and older are projected to reach 1.9 million from 625,000 today.
Written locally by qwen2.5:14b on 2026-09-21,
using this article's own text rather than the other coverage of the
same event (that is the story summary below).
Story summary
Treasurer Jim Chalmers is set to release Australia's seventh Intergenerational Report (IGR) on Monday, forecasting that by 2066, Australia’s population will reach nearly 40 million people with longer life expectancies but lower fertility rates. The IGR outlines significant economic challenges due to an aging population and declining birthrates, emphasizing the critical role of migration in maintaining workforce growth.
Chalmers has hinted at potential further tax cuts for workers as part of his plan to address these long-term issues, suggesting that recent budget improvements have created room for additional relief. However, critics argue that while borrowing less than previously expected is positive, it does not equate to having surplus funds available for such measures without sustainable funding from spending restraint or alternative revenue sources.
The report also highlights the need for policy decisions today to prepare future generations for technological advancements like AI and to address geopolitical uncertainties in a more fragmented world. Prime Minister Anthony Albanese has been pushing for global cooperation on AI regulation during his visit to the United States, where he announced Siobhan McKenna as Australia's next Consul-General in New York, despite concerns about her past ties with News Corp. The announcements come amid efforts by the Australian government to secure a two-year term on the UN Security Council.
Written for “Australia's Economic Future Challenges” on 2026-10-05,
grounded in this article and the 18 other(s) covering the same event.
Australia’s population is ageing more quickly than previously expected, driven by a rapid decline in the number of births per woman.
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population → age → woman
The federal government’s seventh intergenerational report, released by Treasurer Jim Chalmers on Monday, forecasts Australia’s median age, now 38.5 years, to reach 45 years by 2066 – nearly two years older than the previous intergenerational report forecast three years ago.
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age → release → report
Over the next four decades, the population aged between 0 and 20 is projected to grow by a little over 10 per cent, but the population aged 65 and over will balloon by 87 per cent.
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population → age → cent
The number of Australians aged 85 and over is projected to reach 1.9 million, up from 625,000 today, with most of this growth occurring in the 2030s and 2040s.
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most → age → 2030s
The intergenerational report says lower fertility has “accelerated” the ageing of the population.
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fertility → say → population
The nation’s fertility rate – the expected births per woman – last peaked in 2008 at 2.02, but it has since fallen by 25 per cent to a record low of 1.48 in 2024.
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it → expect → 2024
The intergenerational report predicts that will drop to just 1.34 by 2066, well down on the 1.62 births per woman forecast in the 2023 intergenerational report.
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that → predict → report
(The 2015 report assumed a fertility rate of 1.9.)
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report → assume → 1.9
A fertility rate of 2.1 is needed for the population to be replaced from one generation to the next without migration.
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population → need → migration
The lower forecast for fertility has a considerable impact on the rate at which the population ages.
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population → have → which
“Lower fertility means fewer children, a proportionally smaller future workforce and a larger proportion of older Australians,” the report said.
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report → mean → Australians
The fertility slump is not unique to Australia – many nations in Europe and parts of Asia have had far steeper declines, triggering warnings of a “demographic winter” in some.
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nations → have → some
The combination of an ageing community and a relative decline in births will dramatically shift Australia’s population dynamics.
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combination → age → dynamics
By the 2060s, deaths are projected to outnumber births – at that point, migration will become the only driver of population growth.
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migration → project → growth
That ageing trend means the share of Australian workers in their prime earning years is shrinking – now there are about 28 people aged over 65 for every 100 working-age Australians, but that will rise to 39 people by 2062-63.
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that → age → 2062
That will reinforce a broader shift in Australia’s industrial base towards services by increasing the demand for household health services and aged care.
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That → reinforce → services
Over time, that will affect what many Australians do for work.
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Australians → affect → work
Demographic change will ensure that a growing share of Australian workers find employment in that fastest-growing sector over the coming decade.
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share → ensure → decade
Population ageing will also pile pressure on the federal budget because older people typically use more healthcare and aged care services, which are costly to provide.
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which → pile → services
“Health will continue to be the single largest budget pressure,” the report said.
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report → continue → ?
Rising workforce participation by older people will offset the budgetary impact of ageing to some extent.
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participation → rise → extent
The share of Australians aged 65 years and over in the workforce has risen from about 6 per cent to 16 per cent since the first intergenerational report was published in 2002.
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report → age → 2002
Australia’s maturing superannuation system is also supporting higher retirement incomes and easing pressure on the budget.
“By the mid-2040s, most retirees will have benefited from compulsory superannuation over a significant proportion of their working lives, making superannuation the primary source of retirement income for many retirees and reducing reliance on the age pension,” the report said.
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report → mature → pension
Superannuation drawdowns will reach a huge 6 per cent of gross domestic product by 2065-66, the report predicts.
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report → reach → 2065
Another factor driving the ageing of Australia’s population is its longevity.
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factor → drive → population
Australians already have one of the longest life expectancies in the world.
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Australians → have → world
But the intergenerational report predicts they will get even longer – by 2066, life expectancy will reach 89.5 years for women and 86.1 years for men due to improvements in healthcare and medical innovation.
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expectancy → predict → healthcare
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Subscribers → sign → newsletter
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