The 2021 Intergenerational Report (IGR) looks forward 40 years to project future trends in Australian economic and fiscal sustainability. The IGR is released every five years as required by the Charter of Budget Honesty. Its long-range vision contrasts with our annual government budget framework and the medium-term expenditure framework that the budget usually applies. As the IGR itself says, the future will certainly not look like its projections – forecasting is subject to massive uncertainty, and based on assumptions that may not come true. But, we can be certain of some things. In particular, by ignoring why women are having fewer babies and failing to count the cost of care, the IGR only tells us half the story about future economic and fiscal risks.

Key points:

• The 2021 IGR assumes a dramatically lower fertility rate, below 1.6, than the 2015 IGR, which assumed a fertility rate of 1.9. The lower rate reflects current reality and is in line with comparable countries. It is significantly below the population 'replacement' rate of 2.1 and governments are starting to wake up to the implications of declining fertility.
• A key consequence is ageing of the population. The IGR presents the old-age dependency ratio, which is declining as the ratio of working age people to those aged 65 or over falls. But the IGR fails to recognise the cost and value of care for children. The IGF also fails to recognise both private and public costs of care, in money and time, for all dependents.
• By seeing only half the picture, the IGR ignores obvious strategies to support fiscal and economic wellbeing in a fair way. Current tax and transfer policy settings fail to share the cost of childcare, or to alleviate the economic burden on families, especially women.