The latest intergenerational report (IGR) emerges at a somewhat embarrassing time, both for the government and for the whole political class, as well as for the media, which has spent the last 12 months amplifying hostility to migration.
As always with these reports — which are often badly wrong in their forecasts, but usually in ways that are very useful for public policy — there’s a grim inevitability about the numbers.
The most fundamental number is one that successive reports, right from the first report in the Howard years, have gotten badly wrong: our fertility rate.
In report after report, including the last one in 2023, Treasury under successive governments has boldly predicted that Australia would somehow defy the global experience of declining fertility and maintain its fertility rate.
But in this year’s report, Treasury has finally tapped the mat and admitted its optimism was wildly misplaced: “The total fertility rate is expected to fall to 1.34 children per woman by 2065–66, lower than the previous assumption of 1.62 children per woman.” Treasury even, to its credit, provides a nice graph on page 80 of how off its previous forecasts have been.
It hardly had a choice: our current fertility rate is 1.48.
Maintaining previous forecasts would mean Australia achieving the improbable — indeed, wildly outlandish — feat of engineering a long-term increase in fertility, which no-one anywhere has managed.
If you want higher fertility, forget another Baby Bonus (which would be inordinately expensive anyway).
You would have to adopt the Taliban’s education policy and ban women from education; you’d have to dramatically cut the price of housing, substantially increase economic and financial certainty for young couples, make sure young people don’t enter adulthood packing a monster tuition debt, and maybe get rid of phones as well.
While there might be some people on the right who are up for banning women from education, it’s unlikely there are too many takers in the major parties for any of the other requirements.
Lower fertility means, all things being equal, a lower population and fewer workers.
And for the first time, an IGR predicts that by the 2060s there’ll be more deaths than births among Australians.
That might make even the ardent haters of migration in One Nation, the media and the Crikey readership pause: this isn’t just about our workforce — do they want a steadily shrinking country? (M’colleague Jason Murphy has an excellent exploration of the implications for migration in Crikey today).
And that workforce will need to change.
The report notes the economy will shift more toward services as the population ages, a line that’s not really convincing coming from a government that fetishises manufacturing and A Future Made In Australia.
But older people need carers;....
