The Federal Government’s Intergenerational Report 2026 identifies many big-picture challenges facing Australia over the next 40 years but is strangely silent on a critical concern: the impact of the climate crisis on Australians’ health and healthcare.
The report identifies five major transitions shaping Australia’s economy, including the development of artificial intelligence, geopolitical fragmentation, the energy transition, an ageing population, and the evolution of Australia’s industrial base towards services.
Climate Change and Health Impacts
The Potsdam Institute for Climate Impact Research has published its 2026 Planetary Health Check, which found that seven out of nine planetary boundaries — scientifically defined guardrails that ensure the Earth’s health — have now been breached. “The planet’s vital signs are flashing red,” it warns.
This comes as the World Health Organization is urged to formally declare climate change a Public Health Emergency of International Concern (PHEIC), its highest level of alert for a health emergency.
The report projects a possible $2 trillion hit to the economy by 2050 from the climate crisis if Australia has a “disorderly approach” to net zero transition.
The Australian Council of Social Service (ACOSS) argued the report’s social support expenditure forecasts are overly optimistic, considering insufficient income benefits and the essential need for quality aged care, health, disability, childcare, and disaster resilience services.
ACOSS said the current projections for spending on vital social supports are “unrealistically low”, given the inadequacy of income support payments and the clear need for high-quality aged care, health, disability, childcare services, and disaster resilience.
For example, the report says expenditure on the Age and Service Pension is projected to fall from 2.3 percent to 1.8 percent of GDP in 2065-66 despite the ageing population, due to the growing maturity of the superannuation system, which will increasingly fund retirements.
ACOSS also called on the Government to prioritise the following:
- Guarantee the essential care and community services people need and move away from market-based provision that costs more and undermines quality.
- Lift income support for those in the deepest poverty including Jobseeker and Youth Allowances, and index payments to growth in wages so they keep up with community living standards in future.
- Fully legislate and implement the tax reforms announced at Budget, including curbing the capital gains tax discount and negative gearing, closing loopholes used by discretionary trusts, and fringe benefits tax changes for electric vehicles, estimated to raise $93 billion over a decade.
- Introduce a 25 percent tax on gas export revenue ($17 billion annually) and roll back the generous diesel fuel tax credit for mining companies ($4.6 billion annually).
- Further wind back excessively generous superannuation tax concessions, including tax-free investment income after retirement ($10 billion annually)
- Resist further income tax cuts that would erode the revenue base.
Women’s life expectancy at birth is expected to approach 90 by 2065-66, rising from the current 86.
Men’s life expectancy will reach 86 years, up from 82, with the report noting Australia’s migration program has moderated population ageing and supplied key workforce contributions.
Ageing Population
Underlying these ageing trends, the report cites advancements in healthcare treatment and prevention, anticipated to drive continued long-term reductions in mortality rates, reshaping Australia’s disease patterns.
While people have longer and healthier lives, many spend more years managing chronic conditions, which now account for around 90 percent of all deaths, placing increasing pressure on the health and care systems.
Employment in the healthcare and social assistance sectors has grown by 13 percent since 2023 and is projected to grow a further 23 percent by 2035, the report says.
Health expenditure is expected to reach 6.2 percent of GDP by 2065-66, 2.2 percentage points higher than in 2025-26.
Ageing is estimated to account for around one-third of the projected increase in health spending.