Australia’s economic growth will be significantly slower over the next 40 years, due to an ageing population and lower population growth, putting pressure on governments to reform taxes, show budget discipline, and lift productivity, workforce participation and migration rates.

The latest intergenerational report forecasts annual average growth of 2.2 per cent over the next 40 years, which would be the lowest since World War II, and 0.9 percentage points lower than the average annual growth of the past 40 years.