Chalmers' 40-Year Outlook: Geopolitics, AI and a Population First

Treasurer Jim Chalmers has released Treasury's 40-year economic forecast, the Albanese government's second intergenerational report. Guardian Australia

He discussed the report and Labor's policy agenda with Guardian Australia political editor Tom McIlroy and economics editor Patrick Commins in a conversation published on 22 September 2026.

The outlook points to major geopolitical challenges, and separately to major challenges from AI transformation. The language is broad. The detail sits in the Treasury modelling, not the headline description.

On population, the report projects deaths will overtake births in Australia within a few decades, for the first time. Guardian Australia

The broader context here is how these reports work in Canberra. They are not budgets. They do not allocate money. They set the long-run terms of argument about revenue, spending and productivity, and they give a treasurer Treasury-stamped language to describe what future governments must manage. Staffers care less about the year-40 point estimate than the policy permission it creates now. That is why treasurers like them. They outsource the warning.

In my view, the interesting choice is pairing geopolitics with AI. Neither is a standard demographic-and-fiscal variable. Both disrupt supply chains, investment patterns, labour demand and the tax base. That deaths figure is new. It treats natural increase — births minus deaths — as a finite phase rather than a permanent baseline. Putting these risks at the centre of a 40-year view lets Labor talk about structural change without owning a specific near-term forecast. It also makes the usual argument harder. Oppositions can quarrel with a budget line. Quarrelling with a 40-year risk statement looks small.

Looking at what happens next in practice, watch the use, not just the release. These reports live or die in estimates briefs, in Treasury evidence, in ministerial speeches that cite the long run to justify a short-run measure, and in how departments frame regulation and workforce policy. The deaths-overtake-births projection will do particular work. It changes how migration, health, aged care and workforce participation are discussed, because it removes the assumption births will do the heavy lifting. Expect that line to reappear.

My tip for readers tracking this closely is discipline. Ask what baseline the 40-year numbers use, what is assumed about productivity and participation, and where policy is assumed to stand still. These reports are useful when those assumptions are explicit. They mislead when the headline travels without them.

For now, the facts are narrow. A second report. A 40-year horizon. Three headline pressures.

In Canberra terms, the rest is politics. Which suits Canberra just fine.