Hard decisions to be made as Australian population ages

But an ageing population will also increase demand for care and support services.

Dr Chalmers said the federal government was well aware of the big shifts in the economy and society.

"We've shown and demonstrated a willingness and an ability to make difficult decisions to put the budget on a more sustainable footing," he told reporters in Canberra.

The treasurer said the government believed the "most fertile ground" for tax reform included multinationals, high-balance superannuation compliance, cigarettes and changes to the petroleum resource rent tax.

But despite calls from the Business Council of Australia, the government had no plans or intention to raise the GST from its current rate of 10 per cent.

As well, the government had found $40 billion in savings across two budgets and banked much of its upward revisions to revenue to get the bottom line in better shape.

The report will also show that in the decade to 2020, the nation experienced the slowest productivity growth in 60 years.

Dr Chalmers said it was important for people to understand the link between making the economy more productive and lifting living standards.

The report will show life expectancy for men is forecast to rise to 87 years and for women to 89.5 years by 2062/63.

The number of people 65 and over is projected to more than double and those aged 85 and over to more than triple.

Australia's population is projected to hit 40.5 million in the same period.

The care economy could soar from about eight per cent of gross domestic product to about 15 per cent in 2062/63.

The sector will create new and meaningful jobs over the coming decades, with the major policy challenge to meet "increased demand while ensuring the sustainable delivery of quality care". 

Health Services Union national president Gerard Hayes said guaranteeing the long-term sustainability of the aged care system would be best done by a Medicare-style levy.

"We need a strong baseline of care for people who have earned low and modest incomes," he said.

"Otherwise we will widen the gap between the haves and have-nots."

Dr Chalmers said the growth in the care economy will be one of the "most prominent shifts in our society over the next 40 years".

An aged care task force is already looking at the sector's financial sustainability and ensuring older Australians have access to safe and dignified care.

While net overseas migration is bouncing back after COVID-19, cumulative net overseas migration won't catch up to pre-pandemic levels until 2029/30, based on current forecasts.

The level of net overseas migration is assumed to remain fixed at 235,000 persons over the long term.

The average annual population growth rate is projected to slow to 1.1 per cent in the next 40 years, compared to 1.4 per cent in the past 40 years.