National and State population forecasts 

Why national forecasts matter

As specialists in micro-geographic population forecasts, you may be wondering why we're publishing National and State level population forecasts?

Our Small Area Forecast information (SAFi) forecasts give our clients local detail in a regional and national context. In this way, our National and State forecasts do two jobs. Firstly, it provides a 'constraint' for our forecasts at lower levels of geography (regions, and local area forecasts). National forecasts are apportioned to the states, and local forecasts add up to the national total.

Secondly, by understanding what's driving population change at a national level, we can develop better forecasts for local areas. For example, overseas migration is a significant driver of population change in Australia, but it doesn't affect all areas equally; instead, this source of population growth affects CBDs and growth areas more than regional areas.

In this way our forecasts quantify each area's share of the forecast change in national population, providing a realistic and trusted population forecast for service and infrastructure planning.

Update frequency

Each year we review these 'top-down' assumptions with the most current information available, such as the latest ABS ERP (often released in December each year). We also review other factors such as economic activity across the country, and major strategic policy changes. 

This National and State forecast was published on the 17th of May 2023, following the Federal budget announcement. The forecasts are 2021 Census based and now incorporate  Net Overseas Migration Assumptions from 2021-22 through to 2026-27 assumptions aligning with Treasury 2023-24 Budget Paper. 

Read on to learn more about Australia’s growing population over the next 25 years.

This short video explains the process and assumptions behind each forecast we publish.

Forecast assumptions: components of population change

Each year we call upon expert demographers and economists in and outside our organisation to determine .id’s view of population growth and set assumptions about the components of population change.

Below is some commentary of the assumptions built into our forecasts.

Births and fertility

The total fertility rate is a measure of the number of children a female would bear during her lifetime if she experienced current age-specific fertility rates at each age of her reproductive life. 

In calendar year 2021, based on preliminary births data published by ABS there appears to have been a baby bump, with both the fertility rate and births increasing in the middle of the pandemic (see Births, Australia and Total fertility rates (TFR) charts below).  This is contradictory to the previously accepted wisdom that people differ major life events, such as having a child, during times of economic uncertainty such as occurs with a pandemic. .id had previously assumed that the fertility rate would decline during the pandemic and that there would be an increase in fertility rates when the pandemic ended. 

The fertility rates in our latest forecasts align with the view of the Federal Treasury’s Centre for Population, assuming a slow decline in the fertility rate until it reaches 1.62 babies per woman in 2030-31.

This assumption is informed by a paper prepared by Professor Peter McDonald, who concluded;

• Australia’s fertility rates are not expected to return to historically high levels but instead are expected to fall to and then stabilise at 1.62 babies per woman just after 2030.
• Future teenage fertility is expected to continue to fall as women remain in education longer, attitudes towards early childbearing become even less positive, and access to family planning and birth control increases;
• increasing levels of education for women is inversely correlated with the number of children they have, so the increases in the average level of educational attainment for women in their 20s is expected to result in a falling then stabilising birth rate for women in that cohort
• Fertility rates for women in their late 30s appear to have stabilised, and are not expected to change in future; and
• There will be small increases in the fertility rates of women in their 40s as improvements to technology and healthy living help to extend the age at which delayed births can be recuperated.

.id’s assumption is that the Total Fertility Rate (TFR) will decline to a longer-term rate of 1.62. And while the fertility rate might be decreasing, due to the growing base population, the number of births per year continues to rise. 

Overseas migration 

Overseas migration is a significant driver of population growth in Australia. With Australia's international borders re-opened, there has been a significant rebound in migration.  Figures from FY 2021-22 saw overseas migration at a historic highs with 400,000 people arriving in net terms. We believe this to be a 'catch-up' as people who were restricted to come during covid lock-downs, such as students and backpackers are able to enter Australia again.   

Our latest forecasts see a return to our long-term pre-covid levels of 235,000 persons per annum.

At the State and Territory level,  an assumption about the share of Net Overseas Migration (NOM) expected to go to each state and territory is required. This view is formed by the historical patterns and shares of migration, as well as how changing economic conditions may influence the distribution of population throughout Australia.  .id’s assumptions regarding state / territory shares of NOM differ from those used by Treasury. The chart below shows the return of Victoria and NSW taking the main share of overseas migrants. 

Interstate Migration assumptions

A key consideration in our forecasts is to make assumptions about migration patterns between States - interstate migration.

The pandemic had a significant impact on the volume, source and destination of interstate migration. Lockdowns resulted in less movement overall, while out-migration from Victoria and New South Wales reached 40-year highs.

Queensland was the chief beneficiary of migration from Victoria and New South Wales, with the December 2020 quarter representing the highest quarter of Net Interstate Migration (NIM) to Queensland since 1981. The first two quarters of 2023 have seen these trends begin to abate and move back towards longer-term movements. 

It is assumed that over the next two years, NIM trends move back to something closer to historic trends. In the longer term, NIM trends have been updated from our previous forecasts reflecting the anticipated economic performance of the states. The significant assumptions we've revised in this forecast are;:

• increasing rates of inter-state migration loss in New South Wales
• lower rates of gain in Victoria
• increases to NIM gains in Queensland and Western Australia,
• lower rates of NIM loss in South Australia

How do we compare to other National forecasts

While our specialisation is micro-geographic population forecasting, our national forecasts are an important constraint that is used as we progress to lower levels of geography. 

We use the current ERP release from the Australian Bureau of Statistics and align our assumptions with the Centre for Population, to develop a national forecast that is consistent with government policy. We may differ from the Centre of Population based on our view of interstate migration and economic role and function of place.  Our view is informed by a panel of experts in demographics, economics and population forecasting from across .id and PEXA. 

Analysis and commentary provided by our panel of experts from across .id and PEXA.

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Your questions answered

Do you have a question about our forecasts or our assumptions that underpin them? You can submit a question to our team by emailing locationdecisions@id.com.au

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