Australia is projected to experience a significant demographic shift by the early 2060s, with deaths surpassing births for the first time, according to the latest Intergenerational Report (IGR) released by the Treasury. This marks a departure from previous projections and signals a turning point in the nation’s population growth dynamics, driven largely by declining fertility rates and an ageing population.
The 2026 IGR forecasts the total fertility rate in Australia will increase slightly from the current 1.48 children per woman to 1.5 by 2031 but then decline steadily to 1.34 by 2065-66. This represents a marked revision from the 2023 IGR, which predicted fertility would stabilize at 1.62 births per woman over the next four decades. The lowered fertility assumptions have reduced the estimated population for 2065-66 by 1.7 million, bringing it to below 40 million.
“By the 2060s, deaths are for the first time projected to exceed births nationally,” the report states, highlighting that natural increase will cease to be a driver of population growth beyond this point. Such negative natural increase is already evident in several advanced economies, including Japan, South Korea, Germany, and Italy.
The decline in fertility is attributed to various social factors, including women delaying childbearing due to career development, housing challenges, care responsibilities, and workplace inflexibility. While the proportion of women having at least one child has remained relatively stable, postponement has led to smaller family sizes overall.
Simultaneously, the ageing of Australia’s Baby Boomer generation is accelerating, with the number of individuals aged 65 and older expected to rise significantly. The population aged 85 and above is projected to reach 1.9 million by 2065-66, up from 625,000 currently, with most growth occurring between the 2030s and 2040s. Advances in healthcare and lifestyle changes will contribute to increased life expectancy, with women’s average lifespan approaching 90 years and men’s nearly 86.
Despite longer life expectancies, overall deaths are expected to climb due to the larger elderly population, with annual fatalities projected to reach 348,000 by 2065-66, compared to the near-term average of 186,000. The report notes that extended longevity often involves managing chronic health conditions, which may contribute to later-life mortality. Men generally face higher rates of chronic illness and earlier death compared to women, who tend to live longer but may endure more years of poor health.
The demographic trends outlined in the IGR pose significant economic and fiscal challenges. With an older working-age population and a growing number of retirees, the burden on public finances is expected to increase, particularly as demand for healthcare and aged care services rises. The healthcare and social assistance sectors have already expanded employment by 13 percent since 2023 and are projected to grow by another 23 percent by 2035.
Unpaid care for seniors continues to be predominantly provided by women, many of whom balance this responsibility with paid employment. The report emphasizes the importance of accessible, high-quality formal care services to support unpaid carers, maintain labour force participation, and enhance overall productivity in the face of demographic pressures.