There will be no silver bullet solution to turning around Australia’s plummeting birth rates. This is because the problem is multi-faceted and driven by financial, political and, perhaps most importantly, psycho-social factors – namely a society that no longer values children and family as it once did.
A recent column in the Sydney Morning Herald by Liberal Party adviser Charlotte Mortlock has suggested government initiatives aimed at lifting falling birth rates fail because they come with one crucial trade-off: spending less time with children.
This is far too simplistic an assessment, and so is the proposed solution – a four-day workweek.
It is true that a range of parental leave and childcare options are on offer in Australia and have been proven insufficient to enable and incentivise families to have more children. However, even if the four-day workweek were to be implemented, the cost of raising children would remain a significant barrier for many potential parents. The average Australian household will spend between $100,000 and $300,000 in total to raise one child, which amounts to approximately $700 per month, according to data from the University of NSW.
Faced with rapidly rising housing and education costs, and soaring everyday expenses, many Australian women are forced to return to work to help pay the bills regardless of their desired path in life. At least in part, the cost-of-living crisis is making it impossible to be a stay-at-home mum.
Family policy has worked for Australia in the past. When in 2001 Australia’s population hit its lowest birth rate ever recorded (1.7) the government introduced the ‘baby bonus’ policy aimed at lightening the financial load for new parents. The birth rate rose from 1.7 in 2001 to 2.02 in 2008. On the numbers, the baby bonus was a tremendous success. However, the policy was abolished in 2014, and Australia’s fertility rate has since declined to below 1.6.
Compounding the financial issues is political messaging that is hostile to motherhood and children.
Increasingly, the political class measures a woman’s success by her contribution to the economy. Prime Minister Anthony Albanese’s emphasis on the gender pay gap frames the argument about women’s empowerment in financial terms. Motherhood is regularly described as ‘unpaid caring’ and a ‘penalty’ by politicians who are concerned about ‘unpaid taxes’ and a ‘penalty on the national GDP’. This feeds into the narrative that employment is empowerment and mothers have a second-rate role in society.
While reduced working hours would help families, the financial and psycho-social factors likely represent far greater barriers to having children and must be addressed first. Instead of moving to a four-day working week, government policymakers should focus on improving their messaging around motherhood and addressing inflation and cost-of-living pressures so families can afford to live on less.
The first step towards lifting the birthrate is to make motherhood great again. Mothers must feel like valued members of society with a status that is equal to if not greater than the career woman.
In 2020, Australia’s fertility rate was 1.58 births per woman and has been below replacement level for decades. Since 2021, the average age of a woman at the time of her first birth has risen, and the childlessness rate hovers around 16 per cent.
Significantly, one in four Australian women aged 35, and one in three men, were hoping to have a child or more children in the future according to the Household, Income and Labour Dynamics in Australia (HILDA) survey. But by age 49, about half report they have not yet had the number of children for which they hoped.
Looking abroad, in the year that Australia introduced its ‘baby bonus’ policy, Hungary faced an even more dire situation with its fertility rate below 1.3. In 2010, the Hungarian government introduced a policy framework that included incentives for families, support for early childhood care, and work-family balance measures. The catch is that this does not come cheap. Hungary invests five per cent of GDP on family policy. To put that in perspective, the defence budget of most countries is less than two per cent of GDP.
Despite steep demographic decline since 1981, Hungary’s fertility rate increased from 1.21 in 2010 to 1.56 in 2022.
Australia’s current family policy measures targeting subsidised childcare with some parental leave, which encourages parents to re-enter the workforce and allow others to raise their children, are in dire need of reform. However, the four-day workweek is not the solution.
Like Hungary, Australia must look at implementing a range of different initiatives to address birth rate decline and, most importantly, different messaging to address the mindset giving rise to it. This is one of the biggest problems of our time. A society unwilling or unable to have children will not last long.
Children are unquestionably a public good. At the purely economic level, however, they will support us. If there are more people entering retirement than the workforce, the financial burden on younger people increases and the quality of life falls for everyone. Hungary’s pro-family policies geared towards large, married, home-owning families is a lesson from which Australia can learn.
Brianna McKee is a Research Fellow and National Manager of Generation Liberty at the Institute of Public Affairs.
