Australians would receive tax credits for cycling, walking and running under a proposal to foster a healthier population.
The Health and Wellness Rebate recommendation comes out of a think tank that looked at a vision for Australia's future population.
Launched in Adelaide last night the report - Australia's population: shaping a vision for our future recommendations - suggests also beefing up immigration, strengthening rail networks and speeding up the uptake of renewable energies.
Under the Health and Wellness scheme, Australians would receive tax credits on the basis of objective evidence of their physical activity across the year.
"Such schemes have not been viable in the past because reliable non-intrusive objective monitoring of behavioural activity has not been possible," the report says.
Kristin Alford, co-chair of the Think Tank, says there should be national discussion on the ideas that came out of the workshop with 60 researchers earlier this year.
"Population is a critical issue for Australia, Dr Alford says in a statement.
"The Think Tank identified the need for a national grass roots discussion to inform future government policy, including on productivity, diversity in education, health and wellbeing, urban planning and use of resources."
Rural and regional communities are underdeveloped and infrastructure is paid for by mining royalties rather than mining companies, the report says.
Funding it directly from mining companies was a suggestion.
Australia should build family networks with policies that would allow men as well as women to be actively involved in childcare responsibilities, the report online says.
Professor Graeme Hugo, member of the Think Tank committee will speak about a national conversation on population at the Australian Population Association conference in Melbourne on Friday.