Chalmers defends housing reforms as report lays bare generational divide

Australia's latest Intergenerational Report shows younger generations are working longer and finding it harder to build wealth and buy a home than those before them.

Falling fertility and an aging population are also expected to reshape the economy and put greater pressure on government spending in the next 40 years.

Treasurer Jim Chalmers says the government is tackling these challenges through changes to negative gearing changes and measures to boost Australia's workforce, skills and productivity.

The latest Intergenerational Report released on Monday by Treasurer Jim Chalmers has laid out how an aging population and falling birth rate would reshape Australia's economy in the next 40 years.

The economy is expected to more than double in size in the next 40 years, with living standards continuing to rise, and the long-term budget outlook has had "significant" improvements since 2023.

Handing down the report, Mr Chalmers said the global and generational risks faced by Australia were "serious" but argued the country was well-placed to deal with them.

Finance Minister Katy Gallagher said the government would not go into "promoting choices for individual families" but recognised Australians who did have children should be supported.

The average real household net worth rose from $0.5 million in 1993-94 to more than $1.3 million in 2019-20, but much of this wealth growth was concentrated among older households.

Treasury said population growth and smaller households have increased demand for housing, while weak construction and productivity has constrained the supply response.

Older Australians are also working more than previous generations, with participation among people aged over 65 rising 9.5 per cent since the 2002 Intergenerational Report.