Australia's population will age more quickly but grow more slowly than projected earlier, due primarily to lower fertility rates - a trend common across advanced economies. Deaths are projected to outnumber births by the 2060s - the first time this has been forecast in an Intergenerational Report for 2026.
The 352-page seventh edition of “Intergenerational Report: Australia’s future to 2066” was released by the federal Minister for Treasury The Hon Dr Jim Chalmers on 21 September 2026. The new edition has identified AI, geopolitical fragmentation, the energy transition, ageing population and a service-based economy as the five most consequential transformations over the next four decades.
The report reveals that Australians will continue to have among the longest life expectancies in the world, projected to be 89.5 years for women and 86.1 years for men by 2065–66 and supported by ongoing improvements in health care, healthy lifestyles and medical innovation.
The findings, however, predict that more frequent and severe natural disasters will reduce insurance affordability and increase fiscal expenditure. Over the next 40 years, increasingly frequent and severe natural disasters will pose a significant economic risk. Impacts include the loss of economic activity, infrastructure damage, and higher insurance costs.
“Growing disaster risk is driving higher insurance premiums and reduced insurance affordability and accessibility, particularly in high-risk areas. For example, one modelled outcome reported by the Insurance Council of Australia estimates only 23 per cent of the 242,000 households living in high flood risk areas have flood insurance.
“The costs associated with disaster response, recovery and reconstruction will continue to rise as the severity and frequency of natural disasters increases. Government disaster assistance is primarily provided through the Disaster Recovery Funding Arrangements (DRFA), which would increase under all future climate scenarios.”
Global action to limit temperature increases will help reduce the impact on the DRFA, with the increase in annual expenditure projected to be about 25 percentage points lower in 2066 under the Paris-aligned scenario, compared to the Exceeding 3°C scenario.
Without effective intervention, the rising cost of disasters will place additional fiscal pressure on the budget over time, including through the DRFA and other channels. Investment in disaster risk reduction and resilience will be critical to reduce losses, improve insurance affordability and support faster recovery.