Australian households are expected to shrink, but the latest Treasury intergenerational report predicts that more Australians will live into their 90s. Life expectancy at birth for women is projected to reach almost 90 years by 2065/66, up from about 86 years today, while men are expected to rise to 86 years from the current 82.
The report also highlights artificial intelligence as the defining influence on Australia’s economy over the next four decades. Treasury Secretary Jim Chalmers warned that AI would bring “very substantial risks” but could also deliver significant productivity gains if the country keeps pace with global developments.
Population growth is set to slow to 0.9 % per year, down from 1.4 % in the previous four decades, with the population predicted to reach 39.3 million by 2065/66—about 1.8 million lower than the 2023 forecast. The slowdown is largely due to falling fertility rates, as women have fewer children and tend to have them later in life. Chalmers said the government’s role is to make it easier for people to make those choices, citing policies such as subsidised childcare, increased paid parental leave and higher mandatory superannuation contributions.
Fiscal projections show a reduction in future government debt by half a trillion dollars compared with the 2023 report, largely driven by investments in Medicare, the Pharmaceutical Benefits Scheme and the rollout of urgent care clinics. Chalmers noted that while the fiscal outlook is better, more work is needed to manage the pressures and risks highlighted in the report.
On the international stage, Prime Minister Anthony Albanese is visiting the United States to discuss a global framework for AI deployment. He urged cooperation between the US and China for the benefit of humanity, while the US president announced plans to appoint an AI “tsar” and create an “AI Force,” though details remain sparse. Trump dismissed concerns about AI as a “hoax.”
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