Think Australia would be better off with less migration? The numbers tell a different story

Australia's Intergenerational Report (IGR) highlights a clash between anti-migration sentiment and future economic needs. The nation's fertility rate has been below the replacement level of 2.1 for 50 years, currently sitting at around 1.5 and projected to drop further. This demographic trend means deaths will likely outnumber births by the mid-2060s, leading to an ageing population and a smaller workforce to fund services. The IGR suggests that maintaining a healthy migration program is crucial for economic growth, slowing population ageing, and supporting the budget. A scenario with lower migration and fertility rates projects a decrease in real GDP per person and a higher dependency ratio, negatively impacting the budget deficit and government debt.

Australia's Treasury forecasts that the country will experience more deaths than births by the 2060s, a demographic shift already seen in other advanced economies. This projection, part of the latest Intergenerational Report, also anticipates the number of Australians aged 85 or older tripling by 2065-66. Population growth is expected to slow to an average of 0.9 percent annually over the next four decades, with immigration projected to be the sole driver of this growth as the fertility rate declines. Despite these demographic challenges, the Treasury predicts the Australian economy will more than double in size by the mid-2060s, attributing this to productivity gains from AI and increased workforce participation by women and older individuals. Treasurer Jim Chalmers acknowledged the risks but stated Australia is well-positioned to manage this change.

Australia's seventh Intergenerational Report forecasts that by the 2060s, more Australians will be dying than being born, a milestone already reached by several advanced economies. This demographic shift, driven by falling fertility rates and an aging population, will contribute to a new era of lower economic growth, with per person GDP expansion projected to slow. The report highlights artificial intelligence as a pivotal factor expected to support future labor productivity growth, which is crucial for achieving the projected economic expansion. The government faces the challenge of balancing AI adoption with protecting citizens. The report also anticipates ongoing structural budget deficits and identifies six major transitions for the next 40 years, including the AI revolution and the energy transition.

Australia's Intergenerational Report forecasts that in 40 years, deaths will outnumber births, a trend already seen in other developed nations. In response, the Labor government believes investing in universal early childhood education and care is a more effective strategy to address declining birthrates than a "baby bonus." Treasurer Jim Chalmers highlighted that the government is already supporting families through expanded paid parental leave and childcare access, with plans to design a universal childcare system. While some Liberal figures are open to economic incentives like a baby bonus, Labor maintains its focus on childcare as the primary solution. Research on the previous baby bonus showed a modest increase in births, particularly among lower-income mothers and for third children.

Australia's Treasury forecasts that by 2066, life expectancy at birth will reach 89 for women and 86 for men, an increase driven by the universal healthcare system and medical research. The latest intergenerational report projects a slightly lower overall population by the mid-2060s, with growth slowing to 0.9% annually due to lower fertility rates. Artificial intelligence is identified as a "defining influence" on the economy over the next four decades, presenting both opportunities and substantial risks. Treasurer Jim Chalmers stated that while the report highlights confronting aspects like an ageing population's impact on budget pressures, it is not pessimistic, as Australians are well-placed for change. The government is considering further investments in healthcare and managing AI's rollout.