I was expecting the download to be up to 60Gb based on TWAB updates etc. but mine is finished at 29.1Gb, is that correct?
Is the game launch update going to be 40Gb or should the download now be larger?
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I started installing today and it shows 34.9gb
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That would have been due to the PS4's weird downloading system. The PS4 requires that you have twice the space necessary before starting the download. So if the total size is 30GB, then the PS4 won't let you start the download unless you have 60GB of HDD space. Bungie's TWAB was likely simplifying the requirements across all users (after all, extra free space isn't a bad thing).
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Roughly 29 is correct. There will be an update before release, but we don't know the size yet.