This report builds on the 2015 Intergenerational Report by providing a detailed analysis of the impacts of an ageing population on revenue and spending over the next decade.
Since 2011 – when the first of the baby boomer generation turned 65 – the share of the population of retirement age has increased significantly and the share of the population of prime working age has begun to fall. This flows through to the budget in the form of a reduction in revenue, due to lower labour force participation, and an increase in spending, reflecting greater demand for government programs that support older Australians. Over the next decade, the ageing population is projected to subtract 0.4 percentage points from the annual real growth in revenue and add 0.3 percentage points to the annual real growth in spending. In real dollar terms, this equates to an annual cost to the budget of around $36 billion by 2028–29. This is larger than the projected cost of Medicare in that same year.
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Date issued: 01 April 2019
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