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Finance Minister Katy Gallagher says the Intergenerational Report due to be handed down by Treasurer Jim Chalmers on Monday will be “one of optimism” about Australia’s economic strengths in the face of long-term challenges. Chalmers said on Sunday that elements of the document were “confronting”. Gallagher was asked on ABC Radio National to elaborate on what parts of the report could be seen that way. Gallagher said population would be lower than the last report forecast and that fertility rates would be “revised back”.

The 2026 Intergenerational Report will show the total fertility rate is projected to fall from 1.48 births per woman today to 1.34 by 2065-66, below the so-called “replacement rate” of 2.1 required to keep the population stable without migration. “Life expectancy will be raised up. The fiscal story is one of an improving fiscal situation in terms of our budget, so you know the budget will be stronger, debt will be a bit lower,” she said.

“But it also points out that some of those pressures that are hitting the budget, particularly in the care economy, in aged care, and people living longer, which is a good thing, comes with costs that the budget has to meet.” Despite falling fertility rates, Gallagher said the government would not be considering a new baby bonus, like the Howard-era policies. “Our government doesn’t get into promoting choices for individual families, but we recognise that you know people making those choices should be supported,” she said.

“The kind of approach we’ve been taking is how do we make those choices a bit available for people if they want to have children how do we support that ... that can be through our investments in early education and care; our three-day guarantee, extending paid parental leave, ensuring that dads or second parents can take it, putting super on that, so that people don’t have that economic hit when they have children.”