**Australia's Population Dynamics: Deaths to Outnumber Births by 2060s, Government Report Finds**
Australia is projected to experience a significant demographic shift by the 2060s, with deaths surpassing births for the first time in its history, according to the latest Intergenerational Report released by the Treasury. This milestone has already been reached by several advanced economies, including Japan, Germany, and France.
The report, published on September 21, 2026, forecasts that Australia’s population will reach approximately 39.3 million by 2065-66. This figure represents a decrease of 1.8 million from previous estimates made in 2023. The Treasury anticipates that the average annual population growth will slow to 0.9 percent over the next 40 years, a decline from the 1.4 percent growth rate observed in the past four decades.
A notable aspect of this demographic change is the projected increase in the elderly population. The number of Australians aged 85 or older is expected to triple by 2065-66. The report attributes the anticipated population growth entirely to immigration, as the fertility rate is forecasted to decline to 1.34, significantly below the replacement level of 2.1.
Despite the declining birthrate, the Treasury maintains an optimistic economic outlook, predicting that the Australian economy will more than double in size by the mid-2060s. This growth is expected to be driven by productivity improvements, particularly through advancements in artificial intelligence, as well as increased workforce participation from women and older individuals.
Treasurer Jim Chalmers acknowledged the challenges posed by these demographic changes but emphasized that Australia is in a relatively advantageous position compared to other nations. "The report confirms Australia is better placed and better prepared to deal with rapid change than most countries, but despite our advantages, we cannot be complacent," he stated.
However, the report's findings come at a time when Australia is grappling with declining living standards and a long-term slowdown in labor productivity. The Australian Bureau of Statistics indicated that the 20-year average for annual productivity growth has fallen to 0.8 percent in 2023-24, a significant decrease from the 1.8 percent average recorded in 2003-04.
The Business Council of Australia has expressed skepticism regarding the government's economic projections. The council, which represents over 120 of the country's largest companies, cautioned that the anticipated rise in long-term productivity growth to 1.2 percent due to artificial intelligence is not guaranteed. Chief Executive Bran Black highlighted the immediate impact of weak productivity growth on living standards, noting that real gross domestic product per person is nearly $2,000 lower than expected based on the 2023 forecast.
"This is not a problem that starts 40 years from now – Australians are already paying the price for our failure to lift productivity through lower living standards," Black remarked, emphasizing the urgency of addressing these economic challenges.
As Australia prepares for this demographic transition, the interplay between population changes and economic performance will be critical in shaping the nation's future. The government will need to navigate the complexities of an aging population, declining birth rates, and the reliance on immigration to sustain growth, while also addressing the immediate concerns surrounding productivity and living standards.