Australia in 50 years’ time: older, more tech savvy and blurring work-lifestyle

Sydney and Melbourne are forecast to hit nearly 8 million in the latest ABS survey, but it’s those born between 1981 and 1996 that are changing the way we live.

The most recent half-century outlook places the Australian population at 39 million in 2071, up from 27 million today. Picture: NCA Newswire / Nicki Connolly

Last month, the Australian Bureau of Statistics released the latest version of a regular five-yearly report that projects the Australian population 50 years into the 21st century. Earlier iterations dared to look further to the year 2101.

The most recent half-century outlook places the Australian population at 39 million in 2071, up from 27 million today.

The reason this outlook is important is because it provides a post-pandemic assessment of a future Australia. It’s a bit like looking through the Hubble Space Telescope at a distant galaxy and sighting celestial giants (cities, states) that are unimaginable in today’s earthly world.

The projection cited above, 39 million, isn’t especially ambitious given that it is based on a medium series of assumptions including a net overseas migration figure of 225,000 a year. It assumes a modest diminution in fertility to 1.6 births per woman as well as a slowdown in the rate of increase in life expectancy.

In August 2000 a version of this report – daringly, I think – produced projections 100 years into the future. When Australia had barely 19 million residents the outlook for 2101 was 26 million, assuming a net overseas migration figure of 90,000 a year. We actually ticked over 26 million last year.

The reason for our faster-than-projected rate of growth early in the 21st century is twofold: we lifted net overseas migration (which includes foreign students based in Australia for 12-plus months) and, for the better part of a decade, we lifted the birthrate during the so-called one-for-the-country era. In summary, things don’t always work out as assumed in these projections.

And so while it may be fun to muse over what our nation may look like 100 years or even 50 years hence, the more practical application of these projections lies in the next 10 years.

The decade ahead

The 2023-33 outlook assumes net overseas migration trending down from a post-pandemic peak (or near peak) of 454,000 in the year to March this year to an assumed average of 225,000 a year from the year to June 2032 onwards. In other words, by December this year it is likely that we will have passed peak net overseas migration.

This projected slowdown in immigration should help ease the housing shortage; however, it is instructive that the ABS’s medium net-overseas-migration assumption has jumped 150 per cent from 90,000 a year in the late 1990s to 225,000 a year a quarter of a century later.

This prompts important questions such as: has our capacity to deliver housing also jumped 150 per cent across this period? And shouldn’t our intake be (even roughly) correlated to our ability to accommodate new arrivals?

I have extracted a 10-year outlook from the recently released 50-year projections. (I’ll get to the long-term view later.)

In graphic one, I show net change in the Australian population by single year of age between 2023 (population 26.5 million) and 2033 (population 30.3 million). Across this decade the rate of growth decelerates from 522,000 in the year to June this year to 311,000 in the year to June 2033.

The real insight offered by this projection is the positiveness and the lumpiness of the outlook. There will be more Australians in every year of the life cycle in 2033 than in 2023. So, more consumer demand across the board can be expected.

But there are also spikes in the outlook caused by an age-skew to the immigration program (which is focused on 20-something students) and by an echo of the baby boom (1946-64) that is now forming a mountain of 40-something millennials (1984-2002). Iterations of the baby-boom generation as well as of older Gen-Xers (1965-83) will litter life’s later years.

There’s even a surge in the (three-year-old) kid population in 2033 tied not so much to a predicted passion for procreation in 2030 but to a surge in the cohorts most likely to have children.

Compare the decade ahead in Australia with the same decade in Japan (see graphic two) where the population is projected to contract by 0.5 per cent a year across the coming decade from 123 million this year to 116 million in 2033.

Imagine the difficulty of delivering services to more and more old people in a nation with fewer and fewer young people.

Within Australia the projections across the decade to come suggest there will be a heightened demand for childcare, a requirement for student-targeted apartment accommodation, a retirement/lifestyle focus for baby boomers and older Xers, and an urgent need for assisted living accommodation and for more aged-care workers to support the frail elderly.

However, the most dramatic shift exposed by the new projections is the imminent formation of a “millennial mountain” aged in the mid-40s. Here is an inflection point where millennials transition from 30-something singles and couples predisposed to inner-city living to 40-something couples with kids in search of their “forever home” in lifestyle suburbs.

Australians peak in their full-time income-earning capacity at age 43, according to the 2021 census. In the coming decade millennials will pass through peak income and many will, I think, experience a shift in priorities: less demand for minimalist apartments, greater demand for lifestyle homes with front garden, backyard and a Zoom room.

This is an important shift because it has the capacity to challenge the established planning orthodoxy that encourages densification of the inner city and, more recently, middle suburbia via the “missing middle” narrative.

However, my question is this: will peak income-earing millennial families with pre-teen kids gravitate to “density accommodation” in middle suburbia or will they pursue a larger lifestyle home on and beyond the city’s edge?

More Australians pushing into their 40s during the coming decade will drive demand not just for family-type housing but also for cars, appliances, white goods, (family) holidays and no doubt for finance too.

The decade ahead will be largely shaped by an echo of the baby boom passing through the peak-earning and peak-spending time in the life cycle.

Cohort peaks over 100 years

Another way to view the most recent 50-year projections is to consider net annual change not just into the future but also across the past half century.

In graphic three, I show net growth in the 15-64 cohort every year between 1971 and 2071. This is the cohort from which the Australian workforce is (mostly) drawn. It is also the cohort that pays most income tax and forms the bedrock of consumer spending. I would also argue that it is this cohort that sets the cultural agenda.

The effects of the pandemic are evident as foreign students and seasonal workers “went home” in the year to June 2021, and again as these cohorts (and more) flooded back into Australia in the year to June 2023 (in red).

During the past 50 years this 15-64 demographic piston added 168,000 net extra workers (and others) every year via immigration and natural growth.

Over the next 50 years this cohort, underpinned by higher net overseas migration, delivers 136,000 net extra workers (and others) every year. And this includes the half-decade or so of elevated immigration levels in the post-pandemic 2020s.

Higher immigration levels will deliver fewer net extra workers because the growing workforce at the youth end is being offset by ageing (and retiring) baby-boomer workers at the older end. This so-called baby bust has been in effect since 2011 when the first baby boomer born in 1946 tripped across the 65 retirement line.

An imminent surge in the 65-plus population is evident in graphic four, which shows older Aussie expats “coming home” in the year to June 2020. However, it is also clear the period 2023 to 2029 will deliver the greatest net increase in demand for 65-plus services (including the Age Pension) in 100 years. What a time to be Treasurer!

Another 100-year perspective is offered in graphic five, which shows net annual change in the 85-plus population between 1971 and 2071. Demand for, say, healthcare and assisted-living accommodation for the frail elderly has been relatively modest over the past 50 years. However, this demand ramps up exponentially, indeed worryingly, from 2023 onwards, according to the most recent projections, peaking at 62,000 net extra Australians aged 85-plus in the year to June 2032. In the year to June 1972 this “market” grew by less than 3000.

The aged and disabled care worker was the fastest growing job on the Australian continent between the last two censuses, up 95,000 across five years to 280,000 in 2021.

Indeed, I suspect aged-care worker will be our fastest growing occupation across the balance of the 2020s based on these projections. A business to be in, based on this data, is the sourcing, training and accreditation of aged-care workers.

The imminent surge in the 85-plus population also raises the prospect of a loneliness epidemic afflicting older Australians who lose their life partner and/or connection with their family.

Capital cities surge, lifestyle regions rise

The 50-year projections deliver a tailored outlook for each state, territory and capital city. In graphic six I have accessed historic datasets to show the population of each capital city across 100 years.

Based on medium immigration and other assumptions, by 2071 Melbourne and Sydney will reach eight million and 7.3 million respectively. The regions are expected to grow faster (in percentage terms) than the collective capital cities across the projection decades.

At an aggregate level Australia is projected to add 13 million over the 50 years to 2071 comprising eight million added to the capitals and five million added to the regions (mostly in lifestyle zones). This outlook is similar to the past 50 years. Australia added 13 million between 1971 and 2021 with nine million added to the capitals and four million to the regions.

A future Australia will be older, more technology enabled and more inclined to blur work with lifestyle.

A future Australia will have more diverse household and family structures including multi-generational households (as evidenced by the 2021 census). The lifestyle regions especially will be buzzing with new residents over the projection period.

But there will be a divide within the regions between the near-capital lifestyle zones including places such as the Gold Coast, the NSW South Coast, Victoria’s Surf Coast, the Fleurieu Peninsula, the Mandurah-to-Margaret River strip and the nation’s interior, and the rural and remote heartland west of the Great Divide.

The past 50 years have delivered and finessed city living including suburbia in all its forms as well as an inner-city apartmentia supported by a new generation of (millennial) knowledge workers tied to CBD-based jobs.

But all that changes in the post-pandemic Zoom-enabled family-focused late 2020s and beyond.

We have learnt how to work from home. Baby boomers are retreating from the workforce. Millennials are moving to a different stage of the life cycle. A pandemic has played havoc with our immigration flows and workforce structure. Even the ethnic composition of our net overseas immigration program has shifted: more subcontinent, less north Asia.

New population projections published by the UN Population Division late last year imagined a world peaking at more than 10 billion by the mid-2080s, up two billion or 25 per cent from today’s total. Surely this means that net-food-exporter Australia should be planning to lift food exports by no less than, say, 40 per cent across this period.

What is the infrastructure, the corporate assets, the trade support we need to ensure that Australia helps meet global demand for food in the decades to come?

The most recent 50-year projections imagine an Australia at a time that is close to the time of peak humanity.

We should be using this document, this time of thinking about the future, to boldly consider the kind of Australia we believe will deliver the best quality of life – including prosperity, sustainability and social harmony – for the Australian people in the decades to come.

Now is the time for some really big thinking about the future of this land, this Australia.

Bernard Salt is founder and executive director of The Demographics Group. Data in collaboration with Sarah Read; graphic concepts by Fiona Evans.