Jim Chalmers’ Intergenerational Report Says AI Revolution Will Reshape Australia’s Economy Through 2066

AI in 40-Year Outlook

Australia’s 2026 Intergenerational Report, released by Treasurer Jim Chalmers on Monday, placed artificial intelligence among five major transitions expected to reshape the economy through 2065 to 2066 while leaving digital assets absent from the report’s five headline themes. Treasurer Jim Chalmers described the “AI revolution” as “the biggest economic transformation of our lifetime,” and he said it would become a defining influence on Australia’s economy over the next four decades. The Intergenerational Report projected Australia’s economy in 2066 would be more than twice as large and the average Australian would enjoy 55 per cent higher income.

The report also projected the federal deficit would blow out from one per cent of GDP to 1.8 per cent, while gross debt would ease from 33.1 per cent of GDP to 27.4 per cent. The report’s long-run productivity assumption of 1.2% a year underpinned its outlook, including the expectation that productivity growth would bounce back from the 0.3 per cent average over the past decade to 1.2 per cent within five years.

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Crypto Omitted, Infrastructure Missing

Coinbase Australia country director John O’Loghlen criticized the omission of crypto from the Intergenerational Report’s five-transition framework, arguing that future AI agents will require “financial infrastructure those agents will need.”

O’Loghlen said the Intergenerational Report “completely misses the financial infrastructure autonomous agents could use when making payments or conducting transactions.”

Treasury’s separate Financial Innovation Strategy, released on Sept. 3, explicitly addressed digital assets, stablecoins, tokenization, digital money and AI-enabled financial services.

Treasury’s strategy linked agentic systems to payment infrastructure by stating that advances in agentic systems could increase automated and machine-to-machine transactions, creating demand for “real-time, interoperable and programmable payment systems.”

Treasury also stated that it has legislated a licensing framework for digital asset platforms and tokenized custody platforms, scheduled to begin on April 9, 2027.

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Budget, Data, and Policy Stakes

The Intergenerational Report’s projections were challenged by economists who questioned the productivity rebound, with HSBC chief economist Paul Bloxham arguing the assumption that productivity would bounce back so quickly was not justified by evidence. Deloitte Access Economics partner Stephen Smith said the difference between productivity assumptions could produce “an economy that is smaller, poorer and more indebted,” and he added that “AI is an opportunity but can't just be taken for granted.” The Canberra Times reported that the report flagged ways to shape the AI revolution, including improving access to “relevant, high-quality data” held by government agencies with protections for privacy and security.

The report also said governments could influence product markets through procurement choices, and it argued that “Governments may also influence the competitiveness of product markets through their procurement choices.” The Intergenerational Report warned that AI’s positive effects on productivity and economic growth would “generally strengthen the budget,” while also noting that productivity gains could be partially offset if they led to lower prices rather than higher incomes and if labour market changes increased demand for government support.

Reporting for this sectionhttpsThe Canberra Times