Australia’s life expectancy is projected to increase significantly over the next four decades, with more people expected to live into their 90s, according to a preview of the government’s forthcoming intergenerational report. The document, due for full release on Monday, also outlines major demographic shifts and the growing influence of artificial intelligence (AI) on the economy.
The report forecasts that by 2065/66, life expectancy at birth will rise to nearly 90 years for women, up from approximately 86 years today. For men, life expectancy is expected to reach 86 years, compared to the current average of 82 years. Improvements in universal healthcare services and advances in medical research are cited as principal factors behind these gains. Treasurer Jim Chalmers emphasized the importance of continued investment in Medicare, the Pharmaceutical Benefits Scheme, and the expansion of urgent care clinics to support an ageing population.
Demographic trends point to slower population growth and smaller households. Australia’s population is projected to grow at an annual rate of 0.9% over the next 40 years, down from 1.4% over the past four decades. This slower growth reflects a decline in fertility rates, with fewer women having three or more children, often choosing to have children later in life. The population is expected to reach 39.3 million by the mid-2060s, approximately 1.8 million fewer people than previous forecasts predicted.
Chalmers noted that these shifts will contribute to long-term budgetary pressures but maintained that the report is not pessimistic. Rather, it highlights that Australians are better positioned to adapt to rapid technological and societal changes. The government aims to support families through policies that subsidize childcare, extend paid parental leave, and increase mandatory superannuation contributions to alleviate some of the challenges associated with family planning decisions.
A key feature of the report is the anticipated impact of AI, described as the “defining influence” on the economy over the coming decades. Chalmers acknowledged the significant potential benefits of AI in boosting productivity across both public and private sectors, but also cautioned about “very substantial risks” that must be managed carefully. In a press conference, he affirmed the government’s commitment to mitigating these risks.
Prime Minister Anthony Albanese, currently visiting the United States, is seeking international cooperation on AI governance, particularly between the US and China. He emphasized the role of middle powers like Australia in shaping a global framework to ensure that AI development proceeds with consideration for humanity’s broader interests. Albanese drew parallels with past efforts on nuclear non-proliferation, advocating for similar agreements in the emerging AI landscape.
Meanwhile, US President Donald Trump announced plans to appoint an AI tsar and establish an “AI Force” to oversee the technology, dismissing widespread concerns about AI as a “hoax.” Details on these initiatives remain limited.
Fiscal projections in the report suggest future government debt will be reduced by half a trillion dollars relative to last year’s projections, reflecting both economic growth and technological advancements. However, Chalmers stressed that managing the economic and social impacts of an ageing population alongside the rapid rise of AI will remain an ongoing challenge for policymakers.