Australia's population is set to shrink in terms of natural increase, as the Treasury’s 2026 Intergenerational Report projects a 0.9% annual growth over the next four decades, down from the 1.4% average that defined the previous 40 years.
The report, released Monday, also warns that net overseas migration will fall before stabilising, a trend that will compound the decline in birth rates that have hovered around 1.8 children per woman for the past decade.
Chalmers said the projected rise in the number of Australians aged 85 and older – a threefold increase by 2066 – will strain health and aged‑care services, especially in regional hubs where migrant staff are a key workforce component.
Political fallout is already visible: Labour’s new immigration restrictions, introduced last week, come amid a surge of support for One Nation’s hard‑line stance, while Prime Minister Albanese’s approval rating slipped to its lowest since 2022.
The Treasury’s five‑fold scenario, citing AI, geopolitical shifts, the energy transition, ageing, and industrial changes, hints that future budgets may contain further tax cuts and that households will grapple with rising living costs, mortgages, and housing prices.
Health‑care recruiters warn that without a substantial influx of migrant workers, rural facilities could face critical staffing shortages by the 2030s, a risk that echoes the demographic warning.