Intergeneration report forecasts care economy workforce could double to meet needs of ageing Australians

Treasurer Jim Chalmers will release the full report, which looks at how Australia's society and economy will shape up over the next 40 years, at the National Press Club on Thursday.

Aged care has been forecast as one of the five areas where government spending will spike over the next four decades, along with health, the NDIS, defence and interest payments on debt.

Currently, the government funnels a third of its total spend into those sectors, but that's expected to grow to half - or by $140 billion over the next four decades.

The report also forecasts that the country's population will grow at a much slower rate compared to the past 40 years, reaching 40.5 million people in 2062/63.

Migration will help boost population growth but is "expected to fall relative to the size of the population".

At the same time, Australia's ageing population is expected to balloon in size, with the number of over-65s projected to more than double and over-85s more than triple.

That's expected to create "ongoing economic and fiscal" challenges but also significant job growth within the care economy.

The report shows that the care sector could grow substantially over the next 40 years, from around 8 to 15 per cent of gross domestic product.

"Were employment to grow in line with the sector's GDP share, then this would continue strong growth in care employment, with the number of care workers having more than doubled over the last 20 years and estimated to double again over the next 40 years," the report states.

It also points to the former National Skills Commission, which forecast that the demand for just aged care workers is set to double by 2050.

Dr Chalmers said the report will highlight how growth in the care economy is expected to form "one of the most prominent shifts in our society" over coming decades.

"The care sector is where the lion's share of opportunities in our economy will be created and we want to make sure we grab this opportunity with both hands," he said.

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The report will also look at opportunities for productivity growth.

From 2010 to 2020, the nation saw the slowest productivity growth in more than half a century, the report found.

Dr Chalmers said the report will "make the critical point" that future productivity will depend on how the government and the community "respond to the big shifts impacting our economy". That includes areas such as climate change, the care economy and digital technology.

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