Australia is projected to see more deaths than births within 40 years, according to the government's seventh intergenerational report. This demographic shift is expected to contribute to an ageing population and a new era of lower economic growth.
The report forecasts that falling fertility rates will lead to deaths outnumbering births by the 2060s, a milestone already passed by several advanced economies including Japan and Germany. The population is set to grow at 0.9% for the foreseeable future, down from a historical 1.4%.
Real GDP per person is anticipated to expand by approximately 1.2% over the next four decades, a decrease from 1.5% in the previous 40 years. This outlook relies on productivity recovering to a historical average of 1.2%, with artificial intelligence (AI) identified as a key driver for this transformation.
Treasurer Jim Chalmers stated that AI is likely to support the achievement of long-term labour productivity growth assumptions. The report also projects an ongoing structural budget deficit, with government payments as a share of GDP expected to rise to 27.4% by the mid-2060s.