Australia's life expectancy to hit 90 for women by 2065, Treasury report predicts

Australian life expectancy is projected to reach historic highs within the next four decades, with women expected to live to nearly 90 years old by the mid-2060s. However, the government warns that this demographic shift will place significant strain on the national budget and healthcare systems, requiring urgent policy adjustments to ensure the added years are spent in good health.

The findings come from the latest Intergenerational Report by the Treasury, which outlines the long-term economic and social impacts of government policies. While the report highlights positive trends in longevity and fiscal management, it also presents a challenging picture regarding the sustainability of public services as the population ages.

Life Expectancy to Reach Record Levels

According to the data released from the report, life expectancy at birth for women in Australia is forecast to rise from approximately 86 years to almost 90 years by 2065/66. Men are expected to see a similar upward trajectory, with their average lifespan increasing from 82 years to 86 years over the same period.

These figures would solidify Australia's position as having one of the highest life expectancies in the world. The increase reflects decades of improvements in medical care, public health initiatives, and general living standards. However, experts caution that living longer does not automatically equate to living healthier, particularly in the context of rising chronic disease rates.

Health Challenges of an Aging Population

Danielle McMullen, the chief of the Australian Medical Association, welcomed the statistical improvements but raised concerns about the quality of life for older Australians. She noted that while people are living longer, they are also spending more years managing chronic conditions and mental health issues.

Dr. McMullen emphasized the need for a shift towards preventative health measures. She argued that earlier and more frequent interactions with healthcare providers could help mitigate the development of chronic ailments later in life. The focus, she suggested, must move beyond simply extending life to ensuring that the additional years are free from debilitating illness.

Budget Pressures and Government Response

Treasurer Jim Chalmers acknowledged that the report contains confronting elements regarding long-term budget pressures. He stated that a growing and aging population will drive up costs for essential services, including Medicare and the Pharmaceutical Benefits Scheme.

Despite these challenges, Chalmers described the report as not being pessimistic, noting that Australians are generally well-prepared for the accelerating changes in demographics and technology. The government is planning to invest further in healthcare infrastructure, including the rollout of urgent care clinics, to manage the increasing demand for services.

"There are elements of the intergenerational report which are confronting, but it's not a pessimistic report," Chalmers said. "Because Australians are genuinely better placed and better prepared for all of this accelerating change that we are seeing."

Slowing Population Growth and Fertility Trends

Contrary to previous forecasts, Australia's population is expected to be slightly lower by the mid-2060s than predicted in the 2023 report. The total population is projected to reach 39.3 million by 2065/66, which is 1.8 million fewer than earlier estimates.

This slowdown in population growth is largely attributed to declining fertility rates. Annual population growth is expected to drop to 0.9 per cent over the next four decades, down from 1.4 per cent in the previous period. A significant factor in this trend is that fewer women are having three or more children, with many choosing to have fewer children later in life.

Chalmers noted that the government aims to support families in making these choices through policies such as subsidizing childcare, increasing paid parental leave, and raising mandatory superannuation contributions. The goal is to make it easier for individuals to balance family life with financial security.

Economic Outlook and Technological Impact

The report suggests that future government debt could be reduced by half a trillion dollars compared to the 2023 forecast. This improvement in the fiscal outlook is heavily reliant on productivity gains driven by emerging technologies, particularly artificial intelligence.

Treasury advice indicates that if Australia keeps pace with the global shift towards AI, the technology could provide significant productivity boosts across both public and private sectors. However, Chalmers cautioned that while the fiscal story is improving, substantial work remains to manage the associated risks and pressures.

Opposition Leader Angus Taylor criticized the government's approach, suggesting that Labor might rely on optimistic productivity assumptions to present a more favorable budget picture. He stated that while young families need confidence in their ability to afford children, the Coalition has no immediate plans to revive previous 'baby bonus' policies.

As Australia navigates these demographic shifts, the balance between investing in health, supporting families, and managing national debt will remain a central focus of political and economic strategy in the coming decades.