Smaller, older, sicker: Australia’s latest population forecast shows pandemic’s impact

Australia's population is on track to be smaller than forecast and older on average due to the impacts of the pandemic and the global Covid shutdown, new data from the Centre for Population shows.

The country is now predicted to reach a population of 30 million in 2032-33, later than previously expected due to reduced immigration levels caused by the pandemic pause.

The last intergenerational report, released by Josh Frydenberg in 2021, predicted Australia would hit the 30 million milestone in 2030-31. The latest Centre for Population report, which will be released in full on Friday, has revised that.

Australia's population is predicted to be 4% or 1.2 million people smaller than previously forecast in 2032-33 because of slowed migration.

The ageing population means Australia is reliant on migration to grow, as migrants tend to be younger and higher skilled, which boosts the nation's productivity. Australia's fertility rate is also too low to replace the number of people who die each year.

The slowing rate of growth comes after Australia hit the 24 million mark in 2019-20, 20 years earlier than had been predicted in the 2002 intergenerational report, because of a change to migration policy settings under the Howard government.

The population reached 26 million in June 2022 after growing by just 1.1% in a year, significantly slower than the 1.6% pre-pandemic average.

Even with migration levels restored to pre-pandemic levels, Australia's population will not grow as fast as it did before the Covid shutdown. It is expected to take until 2060-61 for Australia's population to reach 39 million - a milestone again predicated on migration. When that happens, the median age of Australia's population is expected to increase from the 2020-21 average of 38.2 to 42.8.

With baby boomers, now aged between 55 and 74, rapidly transitioning out of the workforce, and the latest census data finding 50.4% of the 5.4 million boomers (21.5% of the current population) are already reporting a long-term health condition, the government's focus is shifting to the impact on health and associated support services.

The treasurer, Jim Chalmers, said "well-considered and well-managed" migration would play a "critical" role in the nation's future economic development.

"This matters at multiple levels - the global scramble for talent, the filling of genuine skills shortages, and making sure migrant workers aren't exploited," he said.

"As the economy recovers from the worst of the pandemic, crippling skills and labour shortages are holding our businesses and our economy back."

Australia has some way to go to restore its reputation as an attractive place for migrants to consider. The pandemic policies, which impacted international students and left people on temporary visas without any economic support, meant about 500,000 migrants left Australia.

While numbers are slowly rebounding, one of the key takeaways from the government's jobs and skills summit was the need to provide migrants with a reason to consider Australia - which included more paths to permanent residency.

A review of Australia's migration system is due to report back in the first quarter of this year.