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Australia suffers from both a labour force shortage and a long-term trend of low total fertility rates and gradual decline in actual total birth rates. It was News Weekly, and mainly pro-family think tanks like the Australian Family Association that first issued warnings about this trend well before the turn of the century.

In the last few years, even mainstream media channels have covered the topic, admitting it is indeed a real problem. Famously, Elon Musk shocked progressive circles, claiming: “The biggest problem the world will face in 20 years is population collapse.”

In News Weekly, various policy suggestions have been explored with the goal to make government support for families fairer, or more generous. However, the context for any reforms is the decades-long successful reform achievements of Australia’s feminist movement. All their early work is detailed in Marian Sawer’s Sisters in Suits. This makes family-friendly, pro-child reforms more difficult to achieve, but not impossible.

We have gone from a pre-Howard era where children were recognised – though not generously – in parents’ tax return calculations, then through the Howard era and Costello’s budget and baby-making encouragement – and one for the country – that was more generous but moved assistance to a “payment” from Centrelink, which eventually attracted the label “welfare payment”, despite its clear title, “Family Tax Benefit”; and now we are in the post-Gillard/Rudd era that is largely obsessed with “working families”: two incomes and government-backed long-daycare. Something the Coalition seems to have adopted just as strongly as Labor.

Senator for Queensland Matt Canavan put it this way (October 2024):

“I do not think Peter Costello’s words were much of an aphrodisiac, but his budgets may have been. In the mid-1990s, Australia put aside about 2 per cent of our GDP to support families. After Howard and Costello created a new family-benefits system, 3.3 per cent of GDP went to helping families.

“In the mid-1990s, Australians were having about 250,000 babies a year. By the end of Howard’s term, Australians were having 300,000 babies a year, even topping the 1960s, post-war, Baby Boomer birth numbers.”

The Twist

Importantly, according to British data analyst Stephen J. Shaw, families with children today are proportionally the same sizes (for example, one, two, three or more kids) as 50 years ago. Shaw reveals his findings in his two-part documentary Birthgap, as covered in News Weekly (June 24 and July 22, 2023).

Crucial to policymakers, Shaw reveals that it is the childless rate that has skyrocketed and is the main contributor to the decline in total fertility rates (TFR).

According to a report by the Australian Bureau of Statistics back in 2000, about one in four Australian women will remain childless throughout their lifetime. This is largely unintended childlessness. This includes cohabiting couples, married and de facto married couples, and of course singles, whether intentionally single or not.

This critical observation must reshape our under­standing of which policies would best raise Australia’s birthrate and increase our workforce.

Pro-Baby, Pro-Marriage Policy

The key objective of any new policy must be to reduce childlessness rather than asking couples to have more children. According to Shaw’s Birthgap, once a couple have had their first child, the proportion who continue to two, three or more children follows a predictable long-term pattern.

If it’s all about having that first baby, then it is all about partnering and partnering at a suitable age. That means marriage or commitment cannot be left too late.

Therefore, pro-natal policy should deal with the impediments to partnering/marriage and the impediments to having baby number one.

For young Aussie women, the largest obvious impediments are finding a suitable partner early enough, then if partnered, university debt, career interruption, and housing prices. These issues are reflected in several interviews that Shaw conducted with childless women around the globe in Birthgap.

One recent example of successfully turning around marriage rates and birthrates is Hungary, where a full range of family-friendly policies have been implemented.

Two stand out as ripe for Australia and could pass the pub test and a party room debate.

A discounted government-backed home loan (capped to $100,000) applicable to a couple upon birth of their first child, which is reduced by 30 per cent on the birth of the second child and totally forgiven on the arrival of baby number three.

Women under 30 years of age who have a child during their university years or within two years of graduation has her entire university debt forgiven.

For practical and political reasons, such policies can’t be hugely expensive and therefore cannot be retroactive; only being applicable to newly forming young families.

One needed reform that is gaining widespread support is to allow a single-income family access to two tax-free thresholds. This is a variation on “income splitting” or “family-based income taxation”. Combined with a reduction in Family Tax Benefit Part A, this reform would not be too expensive. Particularly, given that it would give many parents the freedom to choose more time at home with their children and less using government-subsidised daycare.

In fact, fixing income tax is simply a matter of justice. Families are naturally an economic unit, not individuals merely sharing a roof. Family Trust income is taxable only after the distribution to the family member. This is how parents’ income should be taxed, that is, after consideration of family members who depend on that income – spouses and children.

Giving Back Parents’ Freedom to Choose

Government policy should not be so coercive that it distorts parents’ decisions about the most fundamental aspect of raising a family: caring for children. Yet, the one-directional pro-daycare subsidies are exactly that, and a parent who cares for their own young child at home is given dismal and diminishing support.

The best most recent study about parents’ preferred care arrangements was from Cristina Odone (UK), in 2009. The study surveyed over 4,500 parents. It turns out that less than one in nine mothers would prefer always to be in paid work and not have to mind baby/toddler for those early years. Meanwhile, six in ten desired flexibility – freedom to choose some paid work if wanted. The remaining 30 per cent would prefer to be full-time carers for their young children.

Further, if the partner is employed, and the couple has two children under five years, only 1 per cent of women polled thought the mother should be in full-time paid work.

The survey conclusion is that women want to be with their kids in the early years, many seeking flexibility, and very few women wish to prioritise paid work over caring for their zero-to-five-year-old children (see infographic below).

What Must Be Done

● Discounted government-backed home loan contribution (capped to $100,000 or $150,000) applicable to a couple upon birth of their first child, which is reduced by 30 per cent on the birth of the second child and totally forgiven on the arrival of baby number three.

● Women under 30 years of age, who have a child during their university years or within two years of graduation have their entire university debt forgiven.

● Single-income families, with young children, given the equivalent of two income tax-free thresholds to match a dual-income household.

● Government-backed research into impediments to partnering and starting a family among the 18–30-year-old cohort and how to alleviate these impediments.

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Republished with thanks to News Weekly. Image courtesy of Adobe.