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Jim Chalmers (ABC News/Nick Haggarty)

Health, aged care, disability, defence and interest payments on debt will account for half of Commonwealth spending in 40 years’ time, according to an expert from the Intergenerational Report, to be released this week. Source: ABC News.

Those areas currently account for one-third of total spend, but the expert revealed that by 2062-63, spend on those five categories was expected to rise by about $140 billion or 5.6 per cent of GDP.

An ageing and growing population is also forecast to contribute to driving up how much the federal Government spends on health and aged care, with Australia’s ageing population estimated to account for about 40 per cent of the increase.

The report expert revealed that as the population ages, income support payments to individuals and families, and education payments, were forecast to grow in real per capita terms, but decline as a share of GDP, which was consistent with the 2021 report.

Over the next decade, NDIS and interest on government debt are set to be the fastest growing categories, but towards the end of the 40-year projections, the spend on health and aged care will grow quickest.

In April, the national cabinet unveiled a plan to save $50 billion over the next decade by reducing the growth target for NDIS from 14 per cent to eight by 2026.

In the May budget, the Government then confirmed it would seek to significantly reduce the growth of the NDIS, leading to more than $74 billion in savings, including $15.3 billion in the four years from 2023-24.

The updated figures are expected to spark debate about where funding can be reined in and how else the federal Government can collect money through tax reform.

Treasurer Jim Chalmers, who will release the report in full on Thursday, said the report showed the pressure on the budget would intensify.


Intergenerational report projects government spending will rise by $140 billion, 5.6 per cent of GDP  (By Evelyn Manfield, ABC News)