Australians living longer and in better health, but it comes at a cost
The Federal Government’s Intergenerational Report flags changes to employment and taxation as the number of older Australians is set to double
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Australians are set to live longer and be in better health into their later years, but that means future generations will need to shoulder a bigger tax burden to pay for it.
Those are some of the major findings of the government’s much-anticipated Intergenerational Report, to be released on Thursday by Treasurer Jim Chalmers.
The report, the fifth of its kind produced over the past 20 years, makes key social and economic forecasts about the next four decades – and what needs to be done to sustain those changes.
It will show life expectancy is set to rise to 87 years for men and 89.5 years for women by 2062-63.
The proportion of the population aged over 65 is forecast to double, while the number of people over 85 is set to triple, which the report concedes is “an ongoing economic and fiscal challenge”.
The economic consequences of those changes will be significant, with health spending expected to increase sharply, Dr Chalmers said.
Four other main expenditure areas of the Commonwealth budget, being aged care, the National Disability Insurance Scheme, interest on debt, and defence – will leap from one-third of total government spend to one half.
In particular, the so-called ‘care economy’ will almost double from eight per cent of GDP to about 15 per cent in 2062-63.
“Whether it’s health care, aged care, disabilities or early childhood education – we’ll need more well-trained workers to meet the growing demand for quality care over the next 40 years,” Dr Chalmers said.
“The care sector is where the lion’s share of opportunities in our economy will be created.”
Productivity, which has slumped for several tears now, is expected to remain flat and the report has revised down growth “from its 30-year average of around 1.5% to the recent 20-year average of around 1.2%”.
“Placing more weight on recent history better reflects headwinds to productivity growth, such as continued structural change towards service industries, the costs of climate change, and diminishing returns from past reforms,” it reads.
“This downgrade is consistent with forecasts in other advanced economies.”
Australia’s population in 40 years’ time is projected to hit 40 million, although the rate of growth will slow. The economy will rely more greatly on migration to meet skills shortages.
Dr Chalmers said the Intergenerational Report is a warning of the need to ensure the coming changes “work for us and not against us”.
“We’ve shown and demonstrated a willingness and an ability to make difficult decisions to put the budget on a more sustainable footing,” he said.
The report’s findings will spark renewed debate about the need for broad-based tax reform, forecasting a growing reliance on income tax as other revenue – like company tax and the GST – plateaus in the next decade.
One section of the report reads: “Structural changes to the economy are projected to put pressure on the revenue base over the coming decades.”
But rather than raising the GST, Dr Chalmers has flagged tax reform targeting multinationals, the petroleum resource rent tax, high-balance superannuation and cigarettes as possible areas of focus.
Ahead of the report’s release, the Business Council of Australia this week unveiled its national plan to grow productivity and increase competitiveness via a package of reforms.
“If we want sustained wages growth and to maintain full employment, the nation needs a reinvigorated economic growth agenda driven by large-scale investment, higher productivity and greater innovation,’’ the group’s president Tim Reed said.
“Our [plan] outlines how to deliver that agenda – putting forward the big ideas to dramatically alter Australia’s economic trajectory to deliver higher living standards.’’
Among its proposed policies are calls for microeconomic reform, a 10-year net zero roadmap and an overhaul of taxation.
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Gold miners are emerging as a compelling way to navigate market uncertainty, with analysts pointing to strong cash flows, attractive valuations and rising profit margins. As gold prices stabilize above US$4,000 an ounce, mining stocks could offer investors both downside protection and long-term upside.
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Gold is one of the market’s go-to hedges in rocky times. Don’t forget that gold miners’ stocks are too.
The stock market’s gains in 2026 belie the rocky macroeconomic picture: elevated inflation, heightened geopolitical tensions, and jitters about the artificial-intelligence trade. That backdrop, in theory, should be the time for gold to shine. Instead, the price of the yellow metal has tumbled more than 5% so far, after last year’s blistering 65% rally. In part, the U.S. dollar’s recovery has stymied gold, which benefited from the greenback’s weakness in 2025.
Even with the precious metal’s recent weakness, gold mining stocks could be the best way to profit from this year’s uncertainty.
Gold miners “are a valuable hedge against macro risks that would likely be damaging for equities,” BCA Research’s Noah Weisberger and Rishabh Shah wrote this week.
Concerns about the Federal Reserve’s next moves to tackle inflation, the increasingly crowded AI trade, and steep valuations for tech stocks are just some of the drivers that could help gold’s price get on even footing— and lead to even bigger gains for miner stocks.
These stocks’ prices tend to outpace gold’s moves, because the companies have fixed operational costs. So when gold’s price rallies, their profit margins soar, and vice versa. For instance, the VanEck Gold Miners GDX +7.39% exchange-traded fund has fallen 11% this year as the metal has slumped.
Now, gold’s price just needs to stabilize to help miners’ stocks take off, and that seems to be happening. The precious metal has recently found support above the $4,000 level, and has stuck in a narrow range since the end of June. But its price rose ever so slightly in July, ending a four-month losing streak for the metal. Technical analysis also suggests that gold is due for a comeback.
Barron’s recently wrote that the pullbacks for both gold miners and the metal itself are overdone. Senior technical analyst Doug Busch noted that the VanEck ETF is on the “verge of a breakout” and has the potential to hit $11o in early 2027, up more than 40% from its current price.
Gold miners also have more than their role as a market hedge going for them. Their fundamentals are solid, too, says Chris Mancini, portfolio co-manager of the Gabelli Gold Fund.
“Precious metals miners are generating substantial amounts of free cash flow given profit margins of over $2,000 per ounce, and are returning this cash to shareholders through buybacks and dividends,” he said in an email.
“Buying the miners is a cheap way to get exposure to the price of gold,” he added. His fund owns Newmont NEM +6.71%, a Barron’s stock pick last year, and Agnico Eagle Mines as top holdings, as well as miners Northern Star Resources, Endeavour Mining, and Kinross Gold K+8.59%.
Miners are better businesses than they used to be, the BCA team added.
“Capex is more disciplined, margins are high and rising…and they are largely independent of the AI story,” Weisberger, BCA’s head of equities, and Shah, a senior analyst, wrote.
That last part is key. AI is disrupting the software industry and many other services and information-oriented businesses, and investors have piled into AI stocks. But ChatGPT, Claude, Grok, and other large-language models aren’t going to replace the need to mine for metals.
“Equity portfolios can benefit from exposure to quality that is uncorrelated to AI risk, and gold miners fit the bill,” the BCA team said.
They recommend that investors buy the VanEck Gold Miners ETF, which owns top miners such as Agnico, Barrick Mining ABX +7.24%, and Newmont.
An important bonus for big gold miners’ stocks is that their valuations are attractive after the gold’s pullback, too. The VanEck ETF is now trading at just a little more than nine times next year’s earnings estimates. That’s a big discount to its five-year average price-to-earnings ratio of 14, according to FactSet.
What’s more, the ETF is currently valued at a more than 50% discount to the S&P 500 SPX -0.17%, which is trading for about 19 times earnings estimates for 2027. Mining stocks have typically traded at just a 25% discount to the broader market over the past five years. So there is significant upside for the group if valuations move back toward normal levels.
One factor that complicates mining stocks as a market hedge, of course, is if stocks bounce back, which has been the case so far in August.
But both the market and economic outlooks remain cloudy, and investors remain nervous about the Fed’s next moves and AI stocks. Gold miners should do just fine, even if the anxious mood on Wall Street persists.
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