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Australia’s Demographic Turning Point: Deaths Projected to Outnumber Births by the 2060s
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Core Findings of the 2026 Intergenerational Report
The Treasury’s seventh Intergenerational Report (IGR) projects that, for the first time, deaths will exceed births in Australia during the 2060s. Fertility is expected to fall from ? 1.5 children per woman to 1.34 by 2065-66—well below the replacement level of 2.1. Net overseas migration (NOM) is assumed to average 235,000 people per year, keeping the total population on a trajectory toward ? 39 million by 2065-66 despite the falling birth rate.
Background & Context
Since the first IGR in 2002, Australia’s fertility rate has remained under 2.1. The 2026 edition lowers the long-run fertility assumption from 1.62 to 1.34, reflecting delayed family formation, higher education participation and housing-affordability pressures. The report notes that Australia’s reliance on migration to sustain growth exceeds that of comparable economies such as Germany, Italy and South Korea, where deaths already outnumber births.
Data & Statistics
- Fertility: Current ? 1.5 -> 1.34 by 2065-66 (replacement 2.1).
- Population: ? 28.1 million now; projected ? 39 million by 2065-66.
- Dependency Ratio: 27.4 people aged 65+ per 100 working-age Australians in 2025-26; projected 40 by the mid-2060s (rising to 43 under a lower-migration scenario).
- Real GDP per Person: $99,200 today -> $157,300 in 40 years (baseline). A scenario with 50,000 fewer migrants per year reduces per-person GDP by about $400 in 2065-66.
- Budget Pressures: Underlying cash deficit 1.8 % of GDP (baseline) versus 2.4 % under lower migration; gross debt as a share of GDP rises to 32.2 % in the latter case.
- Health Spending: Projected to rise from 4 % to 6.2 % of GDP, with public hospital funding accounting for over 60 % of additional Commonwealth health outlays.
- Fuel Excise: Projected to fall to 0.1 % of GDP by 2065-66, prompting discussion of an EV road-user charge.
Official Statements & Responses
Treasurer Jim Chalmers called the shift a “serious risk” but said AI, the energy transition and a younger migrant workforce provide “demographic resilience.”
Finance Minister Katy Gallagher said Australians who have children should receive support, echoing the Treasury’s view that policy can help families navigate the economic pressures identified in the report.
Criticism & Opposition
Matt Canavan, leader of the Nationals, argued that reviving the “baby bonus” would be ineffective, suggesting assistance be tied to personal effort and work-related contributions.
Opposition parties, including One Nation, have pledged to lower the long-term NOM target below the Treasury’s baseline of 235,000 people per year, contending that a smaller migrant intake would better align with domestic labour-market needs.
Why It Matters
The rising dependency ratio means fewer workers will fund a growing demand for health, aged-care and pension services. Higher health-care spending and a widening debt-to-GDP ratio could constrain fiscal flexibility, while slower per-capita income growth may affect living-standard improvements. Migration remains a key lever for maintaining a viable labour force, but political pressure to tighten immigration rules could amplify workforce shortages, especially in health-care sectors that already rely heavily on migrant workers.
Conflicting Reports & Gaps
- Population Outlook: Some sources cite a projected total of 39 million by 2065-66, while others specify 39.3 million. Both figures derive from the same baseline migration assumptions but differ in rounding.
- Dependency Ratio Figures: The Guardian notes a rise to 40 by the mid-2060s, whereas its conclusion section cites 43 under a lower-migration scenario. Both numbers are presented as scenario-specific outcomes.
Verbatim Quotes
- “For the first time, deaths are projected to outnumber births by the 2060s,” — Treasurer Jim Chalmers.