Australia forecasts deaths to exceed births by 2060s, warns of ageing population

Australia's Treasury projects deaths will outnumber births for the first time in the 2060s, as population growth slows to 0.9 per cent annually. The Intergenerational Report warns of an ageing population, with immigration cuts and declining fertility driving the shift.

SYDNEY: Australia has forecast that deaths will exceed births for the first time in the 2060s, a demographic shift with far-reaching implications for an economy already grappling with an ageing population, declining birth rates and cuts to immigration. The projection, released on Monday (Sep 21) in the Treasury department's Intergenerational Report, marks the first time this has been forecast in such a report.

For decades, Australia has relied on immigration to offset low birth rates and sustain population growth. But with immigration now slowing, the country is starting to follow a path already taken by advanced economies including Japan, Germany and South Korea, where deaths have already outnumbered births. The Treasury now expects population growth to slow to 0.9 per cent a year over the next four decades, down from an average of 1.4 per cent over the past 40 years, as fertility rates decline and net overseas migration continues to fall before stabilising.

"Australia's population will age more quickly and grow more slowly than projected," the Treasury said in the report. "Deaths are projected to outnumber births by the 2060s – the first time this has been forecast in an IGR – at which point natural increase will no longer be a driver of population growth."

The report identified artificial intelligence, geopolitical fragmentation, the energy transition, an ageing population and a shift to a service-based economy as the five most consequential transformations facing the country's economic outlook over the next four decades. It also warned that an ageing population would boost demand for care services, with regions home to older populations facing greater labour shortages in healthcare and aged care, sectors that rely heavily on migrant workers.

The left-leaning Labor government tightened immigration rules last week, as Prime Minister Anthony Albanese seeks to fend off a surge in support for the right-wing populist One Nation party, which has pledged to sharply curb immigration. Albanese's approval rating slipped this week to its lowest level since he became prime minister in 2022.

The report also flagged tax cuts in future budgets as Labor doles out more cost-of-living relief to Australians grappling with elevated inflation, higher mortgage rates and expensive housing.