Australia’s life expectancy is forecast to rise significantly over the next four decades, with more people living into their 90s. Treasury says the trend reflects universal healthcare and medical advances, but an ageing population and smaller households will create continuing pressure on government finances and public services.

By 2065–66, life expectancy is projected to reach almost 90 years for women, up from about 86 currently, and 86 for men, up from 82. Australia’s population is expected to reach 39.3 million—1.8 million below the previous forecast—because fertility rates are falling and population growth is expected to slow to 0.9% annually. Government debt is forecast to be around $500bn lower than previously predicted, although much of the economic outlook depends on artificial intelligence, which Treasury describes as a defining influence carrying substantial risks.