The short version
- Life expectancy at birth is projected to reach nearly 90 for women and 86 for men by 2066, driven by healthcare advancements.
- Population growth is expected to slow significantly, resulting in a total population figure lower than previous estimates due to declining fertility rates.
- Artificial intelligence is identified as the defining economic influence over the next four decades, offering productivity gains but carrying substantial risks that require global cooperation.
Australia’s long-term demographic and economic outlook has shifted toward a future characterized by longer lifespans, slower population expansion, and a profound reliance on emerging technologies. The Treasury’s latest intergenerational report, released in September 2026, outlines these trends through the mid-2060s, projecting that life expectancy at birth will rise substantially for both men and women. These projections suggest that a growing number of Australians can expect to live well into their nineties, a change driven primarily by the nation’s universal healthcare system and ongoing medical research advancements.
Specific figures in the report indicate that female life expectancy is forecast to reach approximately 89 years by 2065/66, up from roughly 86 years currently. Male life expectancy is expected to climb to 86 years, an increase from the current average of 82 years. Treasurer Jim Chalmers highlighted these gains as evidence that Australians are better prepared for accelerating changes, though he acknowledged that the report contains confronting elements regarding long-term budget pressures associated with an aging population.
Concurrently, the nation’s population trajectory is expected to flatten compared to earlier predictions. The total population is projected to reach 39.3 million by 2065/66, which is 1.8 million fewer people than estimated in the previous intergenerational report published in 2023. This downward revision reflects a slowdown in annual population growth, which is expected to drop from 1.4 percent per year over the past four decades to just 0.9 percent annually over the next forty years.
The primary driver behind this reduced growth rate is a decline in fertility rates, particularly among women choosing to have fewer children or delaying childbirth until later in life. Chalmers noted that nearly half of the decline in fertility stems from fewer families having three or more children. In response, the government has pointed to policies aimed at supporting family formation, including subsidies for childcare, increased paid parental leave, and higher mandatory superannuation contributions, as measures to make it easier for individuals to make these choices.
Despite the demographic shifts, the fiscal outlook appears more favorable than previously anticipated. Future government debt is expected to be reduced by half a trillion dollars compared to the 2023 forecast. However, this improved financial position relies heavily on productivity gains derived from new technologies, specifically artificial intelligence. The report identifies AI as the defining influence on the Australian economy over the coming decades, suggesting that keeping pace with global technological shifts is essential for maintaining economic progress.
While the potential benefits of AI are significant, government officials have emphasized the need to manage associated risks. Chalmers warned that the technology brings very substantial risks that must be minimized through careful policy implementation. The report underscores the importance of further investments in healthcare infrastructure, including Medicare and the Pharmaceutical Benefits Scheme, to support the aging population while leveraging technological advancements to offset budgetary pressures.
On the international stage, Prime Minister Anthony Albanese is engaging with global partners to establish frameworks for AI development and deployment. During a visit to the United States, Albanese urged major powers, particularly the US and China, to cooperate on protocols that serve humanity’s interests, drawing parallels to past agreements on nuclear non-proliferation. He argued that middle powers like Australia have a role to play in facilitating this cooperation.
In contrast to calls for cautious regulation, US President Donald Trump has taken a different approach, dismissing fears surrounding AI as a hoax. Trump announced plans to appoint an AI tsar and create an AI Force to monitor the technology, though details regarding these initiatives remain sparse. This divergence in international perspectives highlights the complex global landscape in which Australia must navigate its own technological and demographic future.
The intergenerational report serves as a comprehensive guide for policymakers, balancing optimistic projections of health and fiscal stability with the realities of an aging society and rapid technological change. As Australia moves forward, the challenge will lie in harnessing the productivity benefits of AI while ensuring that social systems remain robust enough to support a population that is living longer but growing more slowly.
Ultimately, the report paints a picture of a nation undergoing significant structural transformation. The combination of increased longevity, lower fertility, and technological disruption requires adaptive governance strategies. By addressing these interconnected trends, Australia aims to mitigate long-term budget pressures while maximizing the opportunities presented by a healthier, albeit smaller, future population.
Sources behind this briefing
Go to the original reporting
- The Guardian World↗More Australians to live into their 90s as life expectancy forecast to rise over coming decades
