Australia faces five major transformations over the next 40 years: rapid advances in artificial intelligence, growing geopolitical tensions, the energy transition, an ageing population and a shifting economy increasingly focused on services. The 2026 Intergenerational Report examines how these changes will shape Australia’s economy, society and future living standards.
The report projects that Australia’s economy will more than double in real terms by 2065–66, with income per person rising by 55%. However, annual economic growth is expected to slow to 2%, increasing the importance of productivity, innovation and a competitive workforce.
Key challenges include population ageing, falling fertility rates, housing affordability, cost-of-living pressures and growing demands on government spending. While Australia’s fiscal position has improved since 2023, long-term budget pressures remain.
The report highlights Australia’s strengths, including a skilled workforce, a resilient economy, renewable energy potential and a strong superannuation system. Realising these advantages will require sustained reform and investment in productivity, essential services, housing and economic resilience.
The central message is clear: Australia must prepare for accelerating change today to protect living standards, strengthen economic resilience and create better opportunities for current and future generations.