Australia is facing a profound demographic shift as new official figures project the national birth rate will fall to a historic low. The data signals sweeping changes for the nation's economy, public services, and society over the coming decades.
Fertility Falls Below Replacement
The 2025 Population Statement, released by the Centre for Population, forecasts the fertility rate will drop to just 1.42 children per woman in 2025-26. This marks a new record low. A slight recovery to 1.62 is anticipated by 2031-32, but both figures remain critically below the replacement rate of 2.1. Australia has not reached this replacement level for almost fifty years.
Nick Latimer, the Centre's executive director, emphasised the significance of the trend for long-term planning. 'Population changes over the next 40 years will be a major influence on Australia's economy and society,' he stated. The report includes, for the first time, detailed analysis of fertility intentions and the growing role of medically assisted reproduction.
Migration Volatility and Ageing Society
Population growth is cooling sharply, influenced by both falling birth rates and volatile migration patterns post-pandemic. While Australia's population recently passed 27.5 million, fresh forecasts now predict it will reach 31.5 million by 2035-36—approximately 150,000 fewer than last year's projection.
Net overseas migration remains uncertain. Recent data shows it was 306,000 for 2024-25, just below the Statement's estimate of 310,000. 'Forecasting net overseas migration has been challenging since the Covid pandemic,' Mr Latimer warned, noting significant uncertainty persists.
Concurrently, Australia's population is ageing. By 2035-36, life expectancy is projected to rise to 87.1 years for women and 83.4 for men, with the median age increasing to 40.2. Treasurer Jim Chalmers highlighted the budgetary pressure this creates, stating 'Population ageing will continue to drive demand for health care services and aged care.'
Policy Responses and Regional Divergence
In response to the declining birth rate, the government has pledged support for families. Mr Chalmers outlined policies aimed at easing pressure, including building a universal early education and care system and expanding paid parental leave. 'The Government is rolling out policies... to make it easier for people to have children if they want to,' he said.
On migration, the Treasurer noted the Albanese Government's Migration Strategy aims to stabilise the system, with migration in 2024-25 falling to roughly half its post-Covid peak. Population growth will vary dramatically across states, with Western Australia leading at 1.8% growth, while Tasmania is set for just 0.1%.
Urbanisation is also set to accelerate. Long-range forecasts suggest 72% of Australians will live in capital cities by 2065-66, up from 68% today. Sydney and Melbourne are each projected to reach 8 million residents by 2050, surpassing that mark in the late 2050s.
