Australians Living Longer, But Nation Faces Increased Costs

Australians are projected to live into their mid-to-late eighties in the coming generations, but the nation must align its health policies to effectively manage the associated costs and ensure these extended years are lived in good health. This projection comes from Treasury's latest Intergenerational Report, which forecasts the impact of government policies up to 40 years into the future.

An extract released indicates that life expectancy at birth for women is expected to approach 90 years by 2065/66, an increase from the current approximately 86 years. For men, life expectancy is predicted to rise to 86 years within the next four decades, up from the current 82 years, maintaining Australia's standing as having one of the highest life expectancies globally.

Dr. Danielle McMullen, President of the Australian Medical Association, acknowledged the rise as a positive outcome of policy efforts but cautioned about the challenge of ensuring these additional years are healthy ones. "Over the last few generations we're living longer, but we're also living more years in ill health with chronic disease or mental illness," she stated, emphasizing the need to focus on preventative health measures and early interventions to combat chronic ailments later in life.

Treasurer Jim Chalmers highlighted that the report supports further investment in Medicare, the Pharmaceutical Benefits Scheme, and the expansion of urgent care clinics. However, he also noted that a growing and aging population presents significant long-term budget pressures. "There are elements of the intergenerational report which are confronting, but it's not a pessimistic report... because Australians are genuinely better placed and better prepared for all of this accelerating change that we are seeing," Chalmers said.

Treasury forecasts suggest a slight decrease in Australia's projected population by the mid-2060s compared to the 2023 Intergenerational Report. Annual population growth is expected to slow from 1.4 percent over the past 40 years to 0.9 percent annually over the next four decades. The nation's population is now predicted to reach 39.3 million by 2065/66, 1.8 million fewer than previously forecast. This slowdown is largely attributed to declining fertility rates, with women having fewer children, often later in life.

Chalmers indicated that government policies, including subsidized childcare, increased paid parental leave, and higher mandatory superannuation contributions, aim to support individuals who choose to have children. Opposition Leader Angus Taylor expressed concern about the affordability of raising children for young families, though the Coalition has no plans to reinstate previous 'baby bonus' policies.

While future government debt is projected to be halved compared to the 2023 report, much of this fiscal improvement is contingent on advancements in emerging technologies, such as artificial intelligence, which are expected to drive significant productivity gains across various sectors. "Overwhelmingly, the fiscal story is a little bit better; but still, lots, lots more work to do to manage some of these pressures and risks," Chalmers commented.