More Australians will be dying than being born in 40 years as major report predicts future of lower growth

According to the government's seventh intergenerational report (IGR), more Australians will die than be born by the 2060s due to lower economic growth and a rapidly aging population. The country is on the brink of an uncertain age of artificial intelligence (AI), which will have a significant impact on the economy and society over the next four decades.

Jim Chalmers, the treasurer, emphasized the challenges and opportunities presented by these global and generational risks in his speech at the Australian National University. Australia's population is expected to continue aging as people have fewer children, leading to more deaths than births for the first time in the coming decades.

Despite the shrinking working-age population, living standards are still projected to improve, albeit at a slower pace than before. The IGR predicts that the economy has entered a new normal of lower growth, with real GDP per person expanding by about 1.2% over the next 40 years, down from 1.5% in the previous four decades. Productivity growth is crucial for achieving the government's long-term labor productivity growth assumption, and the report emphasizes the pivotal role of AI in driving this growth.

The IGR projects an ongoing budget deficit over the next decades, with government payments as a share of GDP expected to rise by 1.1 percentage points to 27.4% by the mid-2060s. Key challenges for the next 40 years include the AI revolution, geopolitical fragmentation, and the energy transition, among others.