Intergenerational Report 2007

The Treasurer released Australia’s second Intergenerational Report (IGR2) on the 2 April 2007.

Under the Charter of Budget Honesty Act 1998 an IGR is required every five years. The first Intergenerational Report (IGR1) was released as part of the 2002-03 Budget.

The reports focus on the implications of demographic change for economic growth and assess the financial implications of continuing current policies and trends over the next four decades.

IGR2 shows that the Australian Government’s long-term fiscal sustainability has improved since IGR1.  We face the future from sound foundations as a result of strong policy frameworks, robust economic growth and a strong fiscal position.

However, demographic and other factors will continue to pose substantial challenges over the next 40 years. The projections in IGR2 show:

• the population will continue to increase in size but with a higher proportion of older people;
• economic growth per person will slow as the proportion of the population of traditional working age falls; and
• substantial fiscal pressures will emerge due to projected increases in spending, particularly in the areas of health, age pensions and aged care.