Australia’s 2026 Intergenerational Report relies on productivity growth accelerating to 1.2% a year from an average 0.3% over the past decade, a rebound independent economists have criticized as implausible. Treasurer Jim Chalmers released the 40-year blueprint on Monday at the Australian National University. Under the baseline, real economic output would more than double over four decades, per-capita income would rise 55%, and government spending would reach 27.7% of GDP by 2065-66. Health and aged care costs would nearly double to 9.7% of GDP from 5.5% today. A downside case with 0.8% annual productivity growth would leave gross national income per person at A$129,800 instead of A$149,500, producing an annual gap of about A$20,000 by 2066. The deficit would reach 4.2% of GDP and gross debt 55.9%, compared with 1.8% and 27.4% respectively under the baseline. HSBC chief economist Paul Bloxham and independent economist Chris Richardson questioned whether artificial intelligence can overcome shortages of housing and cheap energy. Treasury said two-thirds of Australian businesses have adopted AI, though fewer than 10% consider its use significant, and noted Australia’s use of Anthropic’s Claude is more than four times its population share. The report also projects rising personal income taxes, declining fuel and tobacco excise revenue, greater health, defence, debt-interest and disability spending, and a smaller education burden. A 1.6% productivity scenario would eliminate the deficit and allow the federal government to repay almost all gross debt, while average net overseas migration of 285,000 instead of 235,000 would reduce debt to 22.9% of GDP by 2065-66.