Migration to keep Australia growing as population turning point approaches

Australia is on track to record more deaths than births by the 2060s as the nation's fertility rate falls to a new low, the latest Intergenerational Report (IGR) has forecast.

However, Australia's population is still projected to grow to 39.3 million by 2065-66, driven by net overseas migration (NOM), giving the country what the report describes as greater "demographic resilience" than nations such as Germany, Italy and South Korea, where deaths already outnumber births.

Other forecasts include Australia's economy growing by an annual average of 2 per cent over the next 40 years, per capita income being 55 per cent higher, and life expectancy reaching 89.5 years for women and 86.1 years for men by 2065-66.

Published by the federal government every three years since 2002, the IGR outlines Australia's economic and budgetary outlook over the next 40 years.

The forecasts in the reports are predictions, some of which have fallen far off the mark, such as the first report projecting that Australia's population would reach 25 million in 2042 — a milestone reached 24 years earlier in 2018.

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The latest report, published on Monday, predicts the most "consequential transformations" over the next 40 years include artificial intelligence, geopolitical fragmentation, the energy transition, population ageing and Australia moving further towards a services-based economy.

Australia's population growth is expected to fall from an average of 1.4 per cent over the past 40 years to 0.9 per cent per year through to 2065–66.

For the first time in an IGR, deaths are projected to outnumber deaths by the 2060s.

But Australia's population is expected to continue to grow, reaching 39.3 million by 2065-66, largely driven by overseas migration.

The IGR assumes a long-term NOM rate of 235,000 per year; however, the Opposition and One Nation have promised a far lower number if they are in power.

The median age is projected to rise from 38.6 in 2025-26 to 45 by 2062-63. The number of Australians aged 65 and over will almost double, while the number of those aged 85 and over will almost triple.

Australia's fertility rate is projected to decline to 1.34 children per woman by 2065–66 — down from the 2023 IGR assumption of 1.62 — due to delayed family formation and smaller family sizes.

Fertility rates have now been below the replacement level of 2.1 children per woman for more than 50 years.