By 2066 the median age is expected to reach 45, up from today’s 38.5, while the old‑age dependency ratio climbs from roughly 29 % to 39 %, meaning 39 seniors for every 100 working‑age adults.

The report warns that an expanding cohort of people over 65 – projected to grow eight times faster than those aged 0‑20 – will drive sharply higher health and aged‑care expenditures, tightening the federal budget and increasing reliance on income tax revenue.

It also notes that individuals aged over 85 cost the Treasury as much as four working‑age Australians contribute, and that the number of 85‑year‑olds is set to triple in the next four decades, raising the risk of higher public debt unless new revenue streams are found.

Skilled migration remains the principal demographic buffer. Former home affairs secretary Mike Pezzullo told News24 that Australia needs a net overseas migration of about 235,000 people each year for the next 40 years to keep the ageing ratio within manageable bounds.

Nevertheless, migration has become a contentious political issue. One Nation proposes capping net overseas migration at 130,000, while the federal government has announced a target of 225,000 arrivals by 2028, a figure already forecast by Treasury.

Pezzullo cautions that a prolonged reduction in migration could exacerbate workforce shortages and fiscal pressure, echoing the report’s conclusion that a smaller share of working‑age Australians will have to support a growing retiree population.

For workers and taxpayers, the demographic trajectory signals tighter labour markets, potential shifts in wage growth and a greater share of tax revenue directed to health and aged‑care services, making migration policy a pivotal factor in future economic stability.