The Hon. PENNY SHARPE: I address my question to the Treasurer. Can the Treasurer provide information to the House about the Federal Government's projections of a national population of 35 million people by 2049 and specifically provide information about its implications for New South Wales?

The Hon. ERIC ROOZENDAAL: I thank the honourable member for her question and her interest in this very important matter. On 18 September the Federal Treasurer, Wayne Swan, announced that the upcoming intergenerational report predicts the Australian population will grow from 21.5 million to 35 million by 2049. This is a revision of the previous projection of 28.5 million. This morning the Washington-based Population Reference Bureau said that Australia is poised to be the world's fastest-growing industrialised nation by mid- century, faster than India, the United States of America and Indonesia.

I am advised that the increase is due largely to higher immigration and higher fertility levels. I am further advised that the Australian fertility rate has increased from 1.79 births per female in 2005 to 1.93 in 2007 and that in New South Wales the fertility rate has also increased from 1.79 to 1.84. Australian net overseas migration has significantly increased, rising from 205,000 in 2006-07 to 278,000 in 2008-09. Almost 30 per cent of all overseas migrants settled in New South Wales. This means that around 82,000 migrants are settling in New South Wales every year or, to put it another way, 1,600 additional residents every week in New South Wales. As the son of a refugee from Nazi Europe, I am a strong and unashamed supporter of immigration. It has shaped, built and powered this great nation and sustained New South Wales.

The data released by Wayne Swan has serious implications for the State of New South Wales. This week I have asked the New South Wales Treasury's Fiscal Strategy Branch to begin a preliminary examination of the Federal population projections and how it relates to New South Wales. New South Wales Treasury has advised that the New South Wales population is expected to reach almost 10 million people by 2049 from its current population of 7 million. As for Sydney, it will grow to 6.7 million by mid-century, from 4.4 million currently.

Our ever-increasing and ever-ageing population poses challenges that must be confronted and addressed. Australians now have the longest life expectancy in the English-speaking world due to low levels of smoking and drinking, a healthy lifestyle, and medical advances and technological advances. By 2049 the proportion of Australians aged 65 or over will increase from 13 per cent to 22 per cent, and those aged 85 or over will rise to 5 per cent. A healthy, long life expectancy is something to be welcomed, but we must recognise that it comes with additional cost pressures on the community and on the New South Wales State Government. The New South Wales Long Term Fiscal Pressures Report in the 2006-07 Budget examined this issue in detail. The report identified a fiscal gap of 3.4 per cent of gross State product by 2044. This figure has been revised to 4.3 per cent as a result of the impact of subsequent budgets.

Demographic factors account for around 40 per cent of the total fiscal gap by 2044. This is partly the result of a dramatic increase in the health share of the overall budget, which is expected to increase from 26 per cent in 2004-05 to 37 per cent by 2043-44. This growth is expected to be driven primarily by the ageing population. Australia and New South Wales are set for massive demographic changes over the next 40 years. The New South Wales Government stands ready to meet those challenges. That is why we are investing $62.9 billion over the next four years in long-term lasting infrastructure, which will support 160,000 jobs. The Rees Government will continue to deliver essential front-line services to respond to our changing society. [Time expired.]