Australia is projected to experience more deaths than births by the 2060s, according to a new report.
As Australia navigates a demographic transition marked by declining birth rates and an aging population, the government’s recent report indicates a future characterized by profound shifts in population dynamics. By 2065-66, the number of Australians aged 85 and older is projected to triple, signaling the need for proactive measures to adapt to a landscape where immigration becomes the primary driver of population growth. This change brings both challenges and opportunities, particularly in the realms of economic productivity and workforce participation.
Australia’s latest Intergenerational Report, released by the Treasury, highlights that the nation will experience more deaths than births by the 2060s, a development already evident in other advanced economies such as Japan, Germany, and France. The report projects that Australia’s population will reach approximately 39.3 million by 2065-66, 1.8 million lower than previously estimated in 2023.
The Treasury forecasts that the country’s population growth will average 0.9 percent annually over the next four decades, a stark decline from the previous average of 1.4 percent over the last 40 years. This slow growth is primarily attributed to a fertility rate that is expected to fall to 1.34, compelling immigration to account for all future population increases.
Significantly, the proportion of older Australians is on the rise, with the number of individuals aged 85 and above projected to more than double, reflecting a global trend toward aging populations. Despite the challenging demographic shifts, the Treasury remains optimistic about the economy, predicting it will more than double in size by the mid-2060s. This growth is anticipated to be driven by advancements in productivity linked to artificial intelligence and increased participation from women and older citizens in the workforce.
Treasurer Jim Chalmers acknowledged both the risks and opportunities posed by these demographic changes, emphasizing that Australia is better positioned than many other countries to navigate this transition successfully. However, he cautioned against complacency, recognizing the pressing need to address the ongoing erosion of living standards amid a deceleration in labor productivity.
The report surfaces at a time when Australia’s economic framework heavily relies on migration to bolster its population, countering concerns about declining living standards linked to stagnating productivity growth. According to the Australian Bureau of Statistics, the average annual productivity growth has dwindled from 1.8 percent in 2003-04 to just 0.8 percent in 2023-24.
The Business Council of Australia has expressed skepticism regarding the government’s optimistic economic outlook, particularly the assumption that productivity growth will rebound to 1.2 percent due to AI advancements. The council, representing over 120 of Australia’s largest corporations, highlighted that the real GDP per capita is nearly ,000 below prior expectations, with current productivity issues already impacting the living standards of Australians.
In light of these findings, Chief Executive of the Business Council, Bran Black, emphasized the urgent need to improve productivity to safeguard against further declines in living conditions, reflecting a critical juncture in Australia’s economic and demographic future.
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