Australia is facing a profound demographic shift as new official projections reveal the nation's birth rate is on course to plummet to a historic low. The trend, which sees fewer couples choosing to have children, is set to reshape the country's economy, housing market, and public services for decades to come.
Fertility Falls Below Replacement
The government's 2025 Population Statement, released by the Centre for Population, forecasts that 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 starkly below the replacement level of 2.1 children needed to maintain a stable population without migration. Australia has not reached this replacement rate for almost fifty years.
Nick Latimer, Executive Director of the Centre for Population, emphasised the significance of the findings 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, a 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 in the wake of the Covid-19 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 people than projected last year.
Net overseas migration remains uncertain. Latest data shows it was 306,000 for 2024-25, just below the Statement's estimate of 310,000. Treasurer Jim Chalmers noted this figure is close to half the post-Covid peak, attributing the drop to fewer temporary arrivals. He said the government's Migration Strategy aims to stabilise the system in the national interest.
Concurrently, Australia's population is ageing at an accelerated pace. 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. 'Population ageing will continue to drive demand for health care services and aged care, placing greater pressure on the budget,' Chalmers warned.
Regional Divergence and Policy Response
The demographic changes will not be felt evenly across the nation. Population growth is expected to vary dramatically between states:
- Western Australia is set to lead with 1.8% growth.
- Tasmania will see minimal growth of just 0.1%.
Urbanisation is also predicted to accelerate, with 72% of Australians expected to live in capital cities by 2065-66, up from 68% today. Long-range forecasts suggest Sydney and Melbourne could each reach 8 million residents by 2050, surpassing that mark in the late 2050s.
In response to the declining birth rate, Treasurer Chalmers outlined policies intended to support families. 'The Government is rolling out policies to ease pressure on families and make it easier for people to have children if they want to,' he said, citing the expansion of paid parental leave and steps towards a universal early education and care system.
