Australia's Treasurer Josh Frydenberg has stated that continued investment in technology as well as bringing in skilled migrants to Australia would help boost the country's productivity levels over the next 40 years.
"COVID-19 has significantly accelerated the pace of technology adoption, business digitalisation, and is changing the way we work, we communicate, and we shop. This has the potential to spur a new wave of innovation and productivity growth. And we are positioning Australians to make the most of these opportunities of the future, including by investing more in skills, new energy technology, digital technology, and R&D. These reforms and investments will boost productivity and set Australia up for the future," he said.
The remarks come as Frydenberg presented the 2021 intergenerational report [PDF] on Monday, warning that the federal budget would remain in deficit for the next 40 years until 2060; average economic growth would be 2.6%, down from 3%; and the ratio of working-age people to those over 65 would fall from 4.0 to 2.7 over the next 40 years.
The report also said the COVID-19 pandemic has slowed down both Australia's birth rate and migration levels. As a result, Australia's population is projected to reach 38.8 million in 2060-61, compared to the 2015 intergenerational report that predicted an Australian population of almost 40 million by 2054-55.
The five-yearly released report is intended to assess the long-term sustainability of current government policies and how changes to Australia's population size and age profile could impact economic growth, workforce, and public finances over the next 40 years -- in this case, to 2060.
"While this is sobering prediction, it is significantly smaller than the fiscal gaps projected in most past IGRs," Frydenberg assured.
He boasted that some of the recent policies introduced by the Morrison government have helped soften the blow and at the same time support the goal of Australia becoming a "leading digital economy" by 2030.
"If we want to maintain our living standards, generate higher wages, and create more jobs, Australians has no alternative than pursue economic reform … it is a national imperative … that is why [the Morrison government] tackled the emerging issue of digital platforms to promote competition with changes that lead the world … that is why we announced a new patent box in this year's budget to encourage the commercialisation of innovation in Australia and complement the AU$2 billion R&D tax incentive announced in last year's budget," he said.
"It's also why we've established the Consumer Data Right to give consumers more control over their personal data and boost competition."
Frydenberg also noted the composition of the country's migration program needs to be "right".
"A well targeted, skills-focused migration program can supplement our stock of working-age people, slow the transition to an older population, and improve Australia's economic and fiscal outcomes," he said.
When asked how the federal government planned to bring in additional skilled migrants to fill in the existing skills gap while borders remain closed and an outdated visa migration system was still in place, Frydenberg said there are "a series of initiatives" currently underway to attract individuals and businesses to bring capital to Australia.
"Take Hong Kong, for example, there'll be many opportunities here in Australia for people who may be looking to start afresh. There are initiatives that we have underway. There is an immediate issue with respect to filling the labour force shortages that are currently in the economy today … we're already working with the states and the university to bring in cohorts of international students … I could see opportunities for skilled migrants to come in as well, and that is something that we're thinking through," he told ZDNet.
See also: Aussie tech sector claims skills migration assessment is lagging and inconsistent
The 2021 intergenerational report also identified that health and aged care spending would nearly double, due largely to the country's ageing population, but also due to technology, changing consumer preferences, and rising incomes.
It noted that, for instance, while genomic testing is considered a costly emerging technology, this technology was likely to become more cost-effective.
"Improvements in health technology affect the quantity and price of health services. By enabling interventions that were previously not possible, technology can boost the supply of, and demand for, health services," the report said.