Older Australians will make up one-fifth of the population by 2063.
While this could be a sign of an economy past its prime, the treasurer says it's an opportunity for the care sector.
The sixth Intergenerational Report released on Thursday examines the social, economic and demographic issues the country will face over the next 40 years.
The report revealed the number of Australians aged 65 and over will more than double in the next four decades, the population older than 80 will more than triple and centenarians are expected to increase six-fold.
The government already subsidises a range of aged care services including home-based support and 24-hour care and accommodation through residential aged care.
To meet future demand, the care and support workforce will need to double while the government spends roughly 40 per cent more as health, aged care, and NDIS payments increase from 6.2 per cent to 10.7 per cent of GDP.
Though the ageing population could be viewed as an expense to be managed, Treasurer Jim Chalmers sees it as an opportunity.
"The better way is to focus on what we can do to make sure the investments we're going to make in our workforce and in the whole infrastructure of care," he said in a speech to the National Press Club.
"(Delivering) quality outcomes and quality careers and, in the words of my friend Everald Compton, 'turn grey into gold'."
A thriving care sector will allow more women to work by reducing their informal care obligations to their loved ones, knocking down barriers to entry.
As a result, women will be afforded financial independence and economic security.
An extra two million carers will be needed by 2063 to meet demand.
These future job opportunities will push Australians away from production and manufacturing jobs towards careers in the service sector that can lead offer better pay for individuals while increasing national prosperity.
However, director of the Care Economy Research Institute Irene Blackberry says the sector will needs reform to effectively meet demand.
"The care economy, as it exists, is an unwieldy and expensive mix of multiple bodies and organisations with too much duplication and little communication between silos," Professor Blackberry said.
Innovation was needed to make the sector more cohesive and efficient, she said.
