Politicians are frequently accused of short-termism, so Australia’s intergenerational report (IGR) is unusual in projecting the big trends affecting the economy, and in particular the federal budget, over a 40-year horizon.

The former treasurer Peter Costello introduced the concept of the IGR, now in its seventh edition, shortly after the millennium. The idea was to garner support for budget reforms given the challenges that were coming with an ageing population and a shrinking number of workers needed to support them. Oh, for the good old days when the “boomer bulge” appeared to be the most significant budgetary problem that we faced.

With each new IGR, the challenges have been mounting – not just for Australia, but for the whole world. I’m certainly finding it harder and harder to keep my usually optimistic frame of mind in the face of geopolitical fragmentation, rising trade tensions, apocalyptic predictions on AI, fading productivity, the climate crisis and demographic change.

In one respect in particular, the 2026 IGR’s projections represent a watershed moment. Women are projected to continue to have fewer babies over the next 40 years such that population growth is expected to slow to just 0.9% over four decades, compared........

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