Australia’s fertility rate is expected to fall to 1.34 births per woman over the next 40 years, with deaths projected to outnumber births by 2066, according to the country’s latest Intergenerational Report.
The report has prompted debate over whether expanded childcare, a return to the baby bonus or higher migration could help slow Australia’s population decline. Treasurer Jim Chalmers said, however, that reviving the Howard government-era payment was not being considered.
Australia’s fertility rate is already below the replacement level of 2.1 births per woman, standing at 1.44. Alongside an assumed annual net migrant intake of 235,000, the population growth rate is expected eventually to ease to 0.6 per cent.
That would leave a shrinking proportion of working-age Australians supporting a growing number of retirees. The report said falling birth rates across developed economies reflected factors including greater access to contraception, higher participation in education and work, longer periods living with parents and delays in forming partnerships.
Childcare and family policy
Dr Chalmers said the government wanted to make it easier for people to start families, but did not plan to reintroduce a lump-sum payment for newborn children.
“The early childhood education reforms are key to that. Expanding paid parental leave is key to that. Paying super on paid parental leave is a really important part of that as well,” he told reporters.
Australia experienced a temporary rise in fertility when former treasurer Peter Costello introduced the baby bonus, which gave parents a payment for every newborn.
Opposition industry spokesman Andrew Hastie said he was “open-minded” about bringing back the policy, although he acknowledged uncertainty over its effect.
“Peter Costello’s baby bonus of 20-odd years ago seemed to work at the time, although economists and people who know are mixed about their views on whether that actually worked,” he told the ABC’s Afternoon Briefing.
Assistant Treasury Minister Andrew Leigh, an economist, said expanding access to childcare would have the greatest effect in encouraging people to have more children.
“You don’t want women in particular to be choosing between career and family,” he told the ABC.
Migration and the ageing population
Dr Leigh said Labor’s planned changes, which would bring net overseas migration down to 225,000 by 2028, were needed to “right-size” the intake for the economy.
But Aruna Sathanapally, chief executive of the Grattan Institute, said a lower migration intake would put more pressure on workers through higher income taxes to fund the ageing population.
“We’re far better off than the picture that was painted in that first Intergenerational Report in 2002, and a large part of the reason that we are far better off is because of migration, which has increased our working-age population,” she said.
The report projected that if net migration fell to 185,000 and fertility declined to 1.24 births per woman, Australia’s population would be 1.9 million lower by 2066, at 37.4 million.
Under that scenario, the economy would be 7.4 per cent smaller. On a per-person basis, however, living standards would be little changed, with average real gross income estimated to be only 400 dollars lower, at 149,100 dollars.
