AUSTRALIA'S population will increase by more than half to 35 million by the middle of the century, outstripping by 7 million official estimates released only two years ago.

The proportion of those aged over 65 will be lower than that estimated two years ago in the last intergenerational report released by the Howard government, but will still be a lot higher than it is today.

The Treasurer, Wayne Swan, will unveil the revised estimates in a speech today stressing the need to prepare the economy for a growing and increasingly ageing population, including policies that will require older people to keep contributing.

He will also launch the University of NSW's Longevity Index, which will be updated and published every quarter, enabling people to continually adjust their calculations of how much money they need to retire.

It will be the first Australian measure to track changes in the expected lifetime of the population as a whole and of different age and gender groups.