Economist Nicki Hutley has argued that Australia’s response to slower population growth should focus on productivity and workforce participation rather than policies aimed at increasing birth rates.
Writing in The Guardian, Hutley examined the 2026 Intergenerational Report, which projects Australia’s population growth will average 0.9{0931a9b6576c5d87fe846c236d3725957ace4ff7894c2ecd00b9029ccfe6a5f9} a year over the next 40 years, compared with 1.4{0931a9b6576c5d87fe846c236d3725957ace4ff7894c2ecd00b9029ccfe6a5f9} over the previous four decades.
Treasury’s report projects that deaths will outnumber births for the first time in the 2060s, while migration continues to contribute to population growth. The government’s report also projects average economic growth of about 2{0931a9b6576c5d87fe846c236d3725957ace4ff7894c2ecd00b9029ccfe6a5f9} a year over the long term.
Hutley argues that population growth can increase the size of the economy without necessarily increasing output per person. She instead points to workforce participation and productivity as the factors that can support growth in living standards.
The 2026 Intergenerational Report projects the participation rate will rise over the next 15 years, supported mainly by more women and older workers, before declining as the population ages. Treasury also uses a long-term productivity growth assumption of 1.2{0931a9b6576c5d87fe846c236d3725957ace4ff7894c2ecd00b9029ccfe6a5f9} a year.
Artificial intelligence is a major feature of the report. Treasury says AI could contribute to long-term productivity growth, although the timing and scale of its economic effects remain uncertain.
Hutley also argues that policies designed specifically to encourage people to have more children would be unlikely to address the broader economic challenge. Her comments are an opinion on how governments should respond to the demographic projections, rather than a recommendation contained in the Intergenerational Report itself.
Australia By Aussie previously examined the 2026 Intergenerational Report and its projections for population, housing, health and the economy in What Australia could look like in 2066.
The 2026 Intergenerational Report was released by the Australian Treasury on 21 September and looks ahead to 2065–66. The report is the seventh Intergenerational Report and covers long-term economic and budget trends.
Source: The Guardian and Australian Treasury.
