Australia’s birth rate has fallen to a record low, as the nation faces an ageing population and growing pressure on government spending. The latest Intergenerational Report projects Australia’s population will continue to grow - but increasingly through migration, as fertility rates decline. Now, family advocates are calling for greater investment in childcare and more support for parents, warning the cost of raising children is becoming a broader economic issue.
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TRANSCRIPT
Australia’s population is ageing - and the number of children being born is falling.
The federal government’s seventh Intergenerational Report suggests the population will reach around 39.3 million by 2066.
But population growth is expected to slow, becoming increasingly reliant on overseas migration.
The growing older population and declining fertility rate, as well as higher defence, climate and health costs are also expected to put more pressure on government spending.
The median age is projected to rise from 38 to 45, while the number of Australians aged over 85 is expected to more than triple - from around 625,000 to almost two million [[1.9 million]].
At the same time, the fertility rate has fallen to a record low.
It's been below the replacement level of 2.1 children per woman for more than 50 years.
And advocates say the cost of raising a family is becoming an increasingly important factor.
"A persistently low birth rate, puts pressure on services and public finances that we all depend on.”
The Parenthood estimates raising a child in Australia can cost between $17,800 a year for one child, and more than $36,500 for two or more.
Speaking at the National Press Club, the organisation's chief executive Georgie Dent said childcare and flexible work arrangements should be treated as essential economic infrastructure.
In her address titled "The mother and father of all problems: Australia can’t afford for raising a family to be unaffordable", Ms Dent suggests better paid parental leave policies in Australia would be one step in combating low fertility rates.
She says the budget needed for raising a family has risen by 134 per cent in the time since the baby bonus began in 2004, while household income has gone up by 103 per cent.
“I think if we were to take the steps of introducing a well designed generous and equitable paid parental leave policy, I think once it was embedded it would a little bit like trying to say well now we are going to take away Medicare. I don't think it would land very well. I can say if I was the CEO of The Parenthood at that time, I would be campaigning to ensure that that is not wound back at all, and I think a lot of people would.”
Ms Dent says the financial pressures facing parents extend beyond the cost of childcare - affecting housing, careers, workforce participation and household budgets.
She is calling on the government to directly fund childcare centres, with the aim of increasing places and reducing costs for families.
The argument comes as the Intergenerational Report warns Australia will face significant economic pressures as the population ages.
Economists say that means Australia will have to rely less on population growth - and more on productivity in the coming decades.
Stephen Smith from Deloitte Access Economics says the economy will have to rely less on population growth and labor-force participation.
“What Australia has really relied on for the last sort of two decades or so, and particularly since 2008, is population growth to drive our economic growth. So we've had substantial population growth, uh, but not much productivity growth. As we look over the next 40 years, yeah, what this report shows is that the reverse is gonna be true. We're going to be solely reliant on productivity growth, uh, rather than population growth to drive our overall economy.”
Some politicians have suggested measures such as a return to the Howard-era baby bonus to encourage more Australians to have children.
But family advocates say financial incentives alone are unlikely to address the underlying pressures.
Virginia Tapscott is the Founding Director of Parents Work Collective.
“That flexibility that she's mentioning is great, but it needs to go much much further. Childcare doesn't give you more time, more access to childcare won't give you more time, that is just two parents working more. We are adopting a Nordic system where people are at home with their children say for the first year, and they go back to work full time when they're 65, and they're missing out on those moments.”
Treasurer Jim Chalmers this week remained positive about the country's ability to confront future challenges.
But warned of the dangers of what he claims is accelerating change.
“Living standards will be higher and people will retire with much more super..I do not and will not give people free advice about these very personal decisions that they make.”
Treasury data suggests lower migration barely impacts individual Australian wealth.
Experts warn smaller migrant numbers increase fiscal burdens for retirees.
Treasury forecasts predicts Australian living standards would not collapse if population growth targets are not met in the future, with households revealed to be just a few hundred dollars worse off even with a drastically different size.
The Parenthood argues supporting families is not simply a social policy issue - but one that will affect Australia's future workforce and economy.
Georgie Dent says one third of the country's workforce have depended children.
“Treasury has calculated Australia's motherhood penalty, having children reduces women's earnings by an average of 55 per cent over the first five years of parenthood. And it happens even when the mum was the higher earner before. For men, becoming a father has a lower impact on their earnings.”
Shadow Minister for Families and Social Services, Melissa McIntosh says early childcare centres are very important.
“We have childcare deserts out here in western Sydney, people having to commute out of the area, for a good job but then getting back late and the decision about do I go in the city for a job or do I look after my kids, I can't get there by 6pm when the centre closes, these are big complex issues that the coalition is looking into as we form our families policy.”
The Parenthood strives for three main issues to be addressed.
The first being Paid Parental Leave: A defined pathway to 52 weeks of PPL moving towards replacement wages, with meaningful, non-transferable leave dedicated for fathers and partners.
Secondly, Transitioning from the Child Care Subsidy to a direct service-funding model with base operating grants going directly to providers; with fee controls, proper educator wages, and a National ECEC Commission.
And thirdly, workplaces structured around genuine flexibility, predictable hours, and equal expectations for fathers, alongside reinstating national research into pregnancy and parental discrimination.
The Intergenerational Report makes clear the demographic shift is already underway.
But the question now is how governments respond - as fewer births, an ageing population and rising costs reshape Australia's economic outlook.
