The Australian government’s fifth intergenerational report was unveiled on Sunday night, showing that the COVID-19 pandemic will have long-lasting effects on Australia’s growth.

Treasurer Josh Frydenberg said that the pandemic will significantly affect Australia in the future. In statements made ahead of the release of the report, he said “our population will be smaller than initially thought because of what the consequences of the pandemic has led to”.

“Namely the closed borders and the fact that migration has fallen, and population growth has fallen to its lowest level in 100 years,” he said.

“We also have an aging population which is also going to put particular pressures on both the expenditure and the revenue side.

“But when you look at our debt levels, they still remain low by international standards – about half of what it is in the United Kingdom and the United States and less than a third of what it is in Japan.

“That being said, we continue to extol the importance of being fiscally disciplined.

“What the report does show is that the economy continues to grow despite the challenges we face.”

READ MORE: Australia begins to open: Life is returning at three-quarter throttle with most recent easing of COVID rules

The COVID-19 pandemic will lead to fewer migrants and less births through to 2061.

The closure of Australia’s border to foreigners in March 2020 and subsequent message in April by Australia’s Prime Minister Scott Morrison telling visa holders and international students that the time had come for them to “go home” has resulted in the shrinkage of the population for the first time since 1916 during WWI.

The pandemic has followed two decades of population growth with net annual immigration of more than 200,000 a year.

The much lower projections in the report will mean indefinite budget deficits with no surplus projected for 40 years, only 2.7 Australians of traditional working age for each Australian over 65 (down from four) and average annual economic growth of 2.6 per cent, down from 3 per cent.

READ MORE: This year’s Budget “banking on” Australia opening its borders in 2022

The 2015 intergenerational report had predicted that the population would be almost 40 million by 2054-2055, however this year’s update projects 38.8 million by 2060-61. Hence, in 2060-2061, 23 per cent of the population is projected to be over 65 from 16 per cent at present and 13 per cent in 2002.