Key Points
- The Intergenerational Report will be released by Treasurer Jim Chalmers on Thursday.
- There are warnings Australia's ageing population will place a greater burden on taxpayers.
- The report will show life expectancy for men is forecast to rise to 87 years and for women to 89.5 years by 2062/63.
Australians will live longer and enjoy better health in decades to come - but this will put pressure on government finances and the care system, according to a new report.
The Intergenerational Report (IGR) has not been released yet, but early excerpts have begun to paint a picture of the decades to come.
The government has signalled it's willing to make "difficult" budget decisions to deal with the potential pressures, amid warnings the ageing population will place a greater burden on taxpayers.
What is the Intergenerational Report?
The 2023 Intergenerational Report will be released on Thursday and will be the fifth of its kind.
The first was released in Australia in 2002 when Peter Costello was Treasurer.
The reports examine factors impacting the workforce and productivity and make projections about the next 40 years.
They scrutinise the long-term sustainability of policies and make forecasts about how demographic, technological and other structural trends may impact the economy.
The 2023 IGR will forecast up to 2062-63.
What do we know about the report?
The five main spending pressures – health, aged care, NDIS, defence and interest payments on debt - are projected to grow from one-third to one-half of total Commonwealth government spending.
Health spending is expected to increase the most.
The IGR will show life expectancy is forecast to reach 87 for men and 89.5 for women.
The number of people 65 and over is projected to more than double, while the number 85 and over is projected to more than triple.
The population is projected to hit 40.5 million in the same period.
As the population ages, the care economy could soar from about eight per cent of gross domestic product to about 15 per cent in 2062/63.
The report will also show that in the decade to 2020, the nation experienced the slowest productivity growth in 60 years.
The prospect of rising care costs has sparked questions over potential costs to taxpayers.
Treasurer Jim Chalmers said the federal government was aware of changes in the economy and society, and is willing to make difficult decisions.
He said the IGR is about making changes in the economy and society "work for us and not against us."
"We've shown and demonstrated a willingness and an ability to make difficult decisions to put the budget on a more sustainable footing," he told reporters in Canberra.
Chalmers said the government believed the "most fertile ground" for tax reform included multinationals, high-balance superannuation compliance, cigarettes and changes to the petroleum resource rent tax.
But despite calls from the Business Council of Australia, the government had no plans or intention to raise the GST from its current rate of 10 per cent.
The government had also found $40 billion in savings across two budgets and banked much of its upward revisions to revenue to get the bottom line in better shape.
How will Australia meet rising care needs?
Health Services Union national president Gerard Hayes said guaranteeing the long-term sustainability of the aged care system would be best done by a Medicare-style levy.
"We need a strong baseline of care for people who have earned low and modest incomes," he said.
Treasurer Jim Chalmers will release the Intergenerational Report on Thursday. Source: AAP / Mick Tsikas
An aged care task force is already looking at the sector's financial sustainability and ensuring older Australians have access to safe and dignified care.
What else will be in the Intergenerational Report?
While net overseas migration is cumulative net overseas migration won't catch up to pre-pandemic levels until 2029/30, based on current forecasts.
The level of net overseas migration is assumed to remain fixed at 235,000 persons over the long term.
The average annual population growth rate is projected to slow to 1.1 per cent in the next 40 years, compared to 1.4 per cent in the past 40 years.
