Australia faces a major challenge of an ageing population, made worse by the lingering effects of the COVID-19 pandemic, Josh Frydenberg has warned.
Releasing the 2021 Intergenerational Report, the treasurer said the economy will be smaller and the population will be older than it otherwise would have been with flow-on implications for economic and fiscal outcomes.
The report shows Australia faces 40 years of budget deficits, relatively high levels of debt and slower economic growth than had been previously experienced.
"The fact that we are living longer is to be welcomed but the impacts on our economy and our budget are profound," Mr Frydenberg said, launching the report at a Committee for Economic Development of Australia (CEDA) event on Monday.
The five-yearly IGR provides a guide to how the economy will look over the next 40 years and what it means for the budget.
It is the fifth in the series, which was first introduced by former Liberal treasurer Peter Costello in 2002.