JENI O’DOWD: Australia’s birth rate hits record low as housing and childcare costs reshape family plans

I had my girls back when former treasurer Peter Costello was handing out baby bonuses like free show bags at the Easter Show.

It didn’t make me want to have children; nobody has a baby for a cheque. It definitely helped with expenses. But the Government today isn’t even pretending that’s the answer anymore.

A few years ago, Treasurer Jim Chalmers ruled out reviving anything like the baby bonus, insisting Labor had “found a better way” through childcare investment and paid parental leave. Which is fine, except that better way isn’t working either.

Australia’s birth rate has just hit its lowest point on record: 1.48 babies per woman. We need 2.1 just to replace ourselves.

At the 2022 election, Labor promised cheaper child care, which led to out-of-pocket costs dropping by about 11 per cent.

Then the sector took it straight back. Fees rose 9.8 per cent across 2022-23, the biggest annual jump since the childcare subsidy began in 2018. They rose another 4.6 per cent last year and inflation wasn’t even close.

Housing went the same way. Under the National Housing Accord, Labor pledged 1.2 million new homes by 2029. By the end of March this year, they’d built 307,635. They should have been at 420,000.

And the shortfall is widening. In the first three months of this year, 43,816 homes were completed against a quarterly target of 60,000.

That’s the maths of “we’ll fix it” turning into “we didn’t”.

So how exactly do you encourage more families to have children? In 2004, the answer was the baby bonus. But no one seems to have an answer now.

“If you can have children, it’s a good thing to do; you should have one for the father, one for the mother and one for the country, if you want to fix the ageing demographic,” then treasurer Peter Costello famously said at the time.

Back then, it was a universal $3000 payment, rising to $5000, means-tested from 2009 and gone by 2014. When first announced, Costello said the money would “help families with the cost of raising children, improve rewards from work and help balance work and family responsibilities”.

That $3000 wouldn’t get you far now. Prams run to $1600. Then add another $500 for a car capsule, both essential items.

Nappies cost between $80 and $120 per month, or $1200 per year. That’s the entire baby bonus gone before you’ve bought a single tin of formula, blanket, baby wipe or even a onesie.

No wonder our birth rate has fallen so dramatically. People simply cannot afford to have a baby or expand their family.

Add the cost of living to the cost of raising a child, and it’s shocking. If you can even afford to go out, a chicken parmie at the local pub can cost $35 and a frosty schooner of beer $10.

Coffee’s pushing $7 in some cities. People are doing that maths in their heads: mortgage, child care, groceries, the actual cost of feeding a family, and deciding the sums don’t work.

Australia is not alone, and the international experience is sobering.

South Korea has spent more than $200 billion since 2006 encouraging families to have babies through a mix of cash, child care, IVF and parental leave. It didn’t help much. By 2023, its birth rate fell to 0.72, rising slightly to 0.8 last year.

One Korean property developer was so alarmed it started paying staff $75,000 a child. Its 84-year-old chairman explained that without babies the country would face “workforce decline and a lack of defence manpower necessary for national security”.

He builds apartments and worked out that there won’t be anyone left to live in them.

Hungary has gone the furthest. Since 2010 it has offered zero-interest “baby-expecting” loans, income tax relief for mothers and housing support for married couples.

It now spends 5 per cent of its entire GDP on the problem.

This appeared to work at the start, with the birth rate climbing to 1.59 by 2021. But by 2025, Hungary was back at a rate of 1.31, with no policy change to explain the downward shift.

France, long held up as the country that got family policy right, with its income tax exemptions and universal child benefits, has now joined the list of countries where the birth rate is falling.

Of all the nations with formal fertility targets, only Bulgaria met or held its objective last year.

It managed this by investing in families, children and young people, but the birth rate remains below replacement.

No advanced economy with low fertility has ever climbed back to replacement level and stayed there. Not one.

The pattern is consistent enough to be worth noticing. Money helps at first. But it doesn’t fix what’s underneath, which is housing, child care and whether you can hold down a job while raising a child.

Which brings us back to Australia, where childcare is eye-wateringly expensive and not enough houses are being built, despite Labor’s promises to fix both.

We live in a country where many of us struggle to pay rent and where owning a house or apartment is just a dream. Many of us can’t afford to heat our homes in winter or even buy fresh fruit.

Our country is lucky no more.

We’ve reached the point where many Australians are not against having children because they don’t want them.

They are deciding because they don’t think they can afford them.

Chalmers was right that a cheque isn’t the answer. He’s just picked the two things that are, and gone backwards on both.