The release of the Intergenerational Report (IGR) this week has resulted in a fresh round of debate about how Australia is going to cope with the growth that is projected to occur in the next few decades.

Among the forecasts produced by Treasury in the Report were data on the pressures Australia’s ageing and growing population is going to put on the country’s resources. It is true that Australia faces some significant challenges in providing for its people over the next generation, but they are far from insurmountable and some of the more alarmist commentary on this issue needs to be put into perspective.

The IGR contained a projection that in 2049 Australia’s population will have grown to 36 million people. It's important here to note that we are not talking about a government policy or a target we are trying to reach, but a projection based on current patterns.

Naturally, the prospect of an additional 14 million people living in our cities, towns and regional areas has caused some concern but there have been some key points in the debate which have been largely ignored.

The first is that people are raising concerns predictions based on the assumption that society in 40 years time will be exactly like it is now. The IGR simply projects forward, based on current knowledge, some of the issues that are most important to us, such the state of the budget and the state of healthcare. What we don't know of course is the technological change that will occur and what that will do to our economy and to our society.

Second is that it is widely projected that declining birth rates will mean the world’s population will stabilise at around nine billion - it's about six and half billion now - in the middle of the century. So whilst there is going to be a period of growth in Australia in the next few decades the notion being bandied about by some that growth will be infinite and we’ll have 100 million people in Australia by the end of the century is simply without foundation.

Policies to reduce population growth are also extremely complex and fraught with obvious problems.

Do we want to stop people having kids? Do we want to have major skill shortages, to have serious shortages of engineers and doctors rather than have some postitions filled by people coming from overseas? Do we want lower productivity and less economic growth?

Yes, Australians want space. But we want a lot of other things too; the right to have children, the ability to access a skilled workforce and a continually improving standard of living being chief among them.

Whether Australia’s population reaches the projections contained in the IGR or not the true challenge we as a Government, and as a nation, face is ensuring that growth is sustainable.

We have been very profligate in how we've managed our environment, our water resources, the development of our cities and how we've managed our economy in general in recent decades. Regardless of what our population is in 2050, for Australians to continue enjoying the quality of life we currently do, that profligacy has to stop.

We need to change the way we do things. The poor planning that resulted in urban problems, the environmental waste and degradation that have caused water shortages, the productivity lapses that have stunted growth, these are the challenges we must tackle.

That is slowly starting to happen but we have a long way to go. The Rudd Government’s focus is on improving our skills and infrastructure, investing in broadband, reforming our regulation and lifting our productivity. These issues will have far greater impact on our overall well-being over the next few decades than fluctuations in the rate of growth of our population.