Australia in the 2060s: an optimistic outlook dominates budget forecasts in the Intergenerational Report

This year’s Intergenerational Report (IGR) highlights AI, population ageing and geopolitical fragmentation.

It is a tribute to optimistic forecasts.

Things will turn out for the best if artificial intelligence (AI) improves productivity, promised budget savings are actually achieved, global turmoil creates new opportunities and global warming is limited.

But it is a more political IGR than many have been since they first began in 2002.

Although nowhere near the low-water mark of the highly political 2015 report from then treasurer Joe Hockey , politics features in this one via its many mentions of current government policies.

They may not last the coming 40 years.

The population is ageing, but healthier An important topic in each report has been the ageing population.

Australia’s fertility rate has been below the replacement rate of 2.1 children per woman for 50 years.

It is projected to drop further to 1.34 children by 2065–66.

By then, deaths will outnumber births.

This is the first time this has been projected in an IGR.

The first IGR in 2002 noted that the proportion of the population aged over 65 had risen over a century from just over 4% to 12.5%.

That proportion is now projected to be 25% by 2065–66.

Most countries are spending an increasing share of their national income paying pensions.