2 hours ago
2
If there is one thing western Sydney mother Reshmi would like to give her one-year-old son, Adrian, it would be the experience of growing up with siblings.
The 36-year-old knows that sharing the same parents and living under the same roof does not guarantee a lifelong bond.
But as someone who speaks with her siblings three times a week and regularly catches up with them for lunch or dinner, the benefits outweigh the risk.
“Even just going through hard things in life and your parent is sick, or an aunt or an uncle is sick, having a sibling to go through that with is really lovely,” she says.
The cost of having a second child is just too high for Reshmi and her husband, Tommy.
“You kind of have to give something up,” says Reshmi. Whether it’s holidays, extracurricular sports or activities, “something gets scrapped”.
As Australia’s fertility rate hits record lows, it’s clear the couple are not alone in their thinking.
While the amount of Australian women leaving their childbearing years without children is increasing, the greater driver of our lower fertility rate is couples who would have, decades ago, had three to four children now choosing to have one or two.
The main reason for this, according to exclusive Resolve Political Monitor polling for this masthead, is financial.*
That’s not surprising to Professor Elizabeth Hill, who is the deputy director of the Australian Centre for Gender Equality and Inclusion at Work at the University of Sydney.
“Fertility intentions are strongly shaped by not just choice but by material constraints,” says Hill. “That includes the cost of raising a child, access to housing, availability of secure work, but also childcare and paid parental leave.”
Ironically, what has economists worried about Australia’s 1.48 fertility rate is that, although the effects of lower fertility have been offset by migration so far, it will harm the economy in the long term.
If the trend continues, fewer workers will enter the labour force over time. That will have consequences for workforce dynamics and the tax base needed to support an ageing population. So what can we do about it?
If the issue is cost … why not another ‘baby bonus’?
Australia’s last substantial effort to boost fertility was the Howard-era baby bonus which gave parents initially a $3000 lump sum on having a child. Famously, then-treasurer Peter Costello declared couples should have “one for your husband and one for your wife and one for the country”.
Research by independent think tank e61 argued there was a bump in Australia’s birth rate. But it is highly caveated.
The analysis suggested that in its first year of operation, an extra 16,250 children were born.
Its biggest impact was on people who had not finished high school (an 8 per cent lift among this cohort), people with no taxable income (a 10 per cent increase) and women with below-median incomes.
It also came at a cost to taxpayers, which in today’s dollars e61 estimated at $86,000 for each additional baby.
And the study itself came under fire. Australian National University demographer Liz Allen noted that the research had picked up a “demographic echo”.
A secondary wave of population growth, from a large base population such as Boomers, is often referred to as an “echo”.
Fertility had peaked in 1961 before rallying again as Boomers started having their own children, Generation X, who hit their prime child-bearing years just as the baby bonus was introduced.
Fertility rates increased between 2001 and 2008 but then started falling, even as the baby bonus continued.
There’s better proof that the baby bonus influenced the timing of births.
Research released in 2009 by economists Joshua Gans and Andrew Leigh (now assistant minister for productivity, competition, charities and treasury) showed that people – where possible – delayed the birthdate of their child to capture the bonus.
They estimated about 1000 births were “moved” to capture the bonus, which started on July 1, 2004. That day had the single largest number of births in 30 years.
Two years later, the bonus was increased from $3166 to $4000, with the higher payment starting on July 1, 2006. Gans and Leigh again found parents delayed their new child – through caesarean and induced births – so they could pocket an $834 windfall.
Have any policies worked?
Perhaps the biggest problem for policymakers advocating a change is that so little seems to work. Falling fertility rates are a global issue – the United States’ sits at 1.6, South Korea’s is at 0.8 – but the world’s greatest minds have yet to solve it.
Dutch academic Anne Gauthier and Hong Kong University-based Stuart Gietel-Basten last year released a paper that pulled together research into fertility, and ways to boost it, covering the past 50 years.
There have been literally thousands of studies into the multitude of actions taken by governments and agencies aimed at boosting fertility rates.
From Iran – which imposed dangerous restrictions on sexual and reproductive health services while limiting divorce – to huge tax breaks, economists and policy advocates have sought to discover if efforts to lift the number of babies actually work.
Their findings were sobering. There was a “relatively weak direct link” between policies and increases in fertility, they found, describing most as “hostages to fortune”.
This research noted that when it came to direct cash handouts to encourage more babies, the impact was small and only short term. Doubling financial assistance lifts fertility by 0.14 children per woman.
“One plausible explanation for such a relatively small effect is that these cash benefits are simply too small, as compared to the total cost of children, to make a difference in people’s fertility decisions,” they found.
Having a child, Gauthier and Gietel-Basten noted, is not just about a cash splash or a heavy-handed government.
“It is a decision which requires individuals to weigh their current and future situations and circumstances, in the midst of increasing uncertainty and increasing standards of good parenting,” they found.
Even when it appears a particular policy is working, it may only be shortlived.
The recently defeated government of Hungary had put in place some of the most “pro-procreation” policies in the world as part of Viktor Orban’s nativist administration.
Up to 5 per cent of GDP was spent on measures stretching from government grants to buy minivans to making income tax-free for women who had at least four children.
The country’s fertility rate increased, hitting 1.63 in 2020. But by 2025, Hungary’s fertility rate was back to 1.31 – back to where it was in 2012.
How can we support parents who want more children to have them?
According to a Resolve Political Monitor poll for this masthead, 52 per cent of people aged 18 to 44 with no children or one child believe more flexible work arrangements such as working from home or a four-day workweek would encourage people to have children, or more children.
They’re not entirely wrong.
COVID-19, and the changes to our working patterns, provided researchers a natural experiment in ways that fertility could change.
Around the world, fertility rates fell in 2020 but then bounced back in 2021. It was a tiny baby bump that lasted a single year. In Australia, the fertility rate enjoyed its largest increase since 2007, before sliding to a record low three years later.
Researchers from Britain, Mexico and the United States this year released findings that suggested working from home can be a factor.
Studying people in 38 countries, including Australia, they found that between 2023 and early 2025, fertility rates were higher among women who worked from home at least one day a week. It was higher for couples when both parents were working from home.
Just one day a week working from home, and near the family bedroom, increased fertility by 0.32 children per woman.
In the United States alone, working from home accounted for about 291,000 births in 2024.
Another big puzzle facing Australian families – especially those with multiple young children – is the early childhood care and education sector.
“Our research shows consistently that accessing high-quality and affordable care for kids is a massive headache and creates enormous stress for families, both in terms of the finances, but also just getting it to work,” says Hill.
Reshmi and Tommy need two incomes to service the mortgage for their townhouse in North Parramatta, so Reshmi returned to work for four days a week in January.
Adrian spends two days a week at daycare. He spends one day a week with Tommy’s mother, who is retired, and another with Reshmi’s mother, who went part-time at her own job so she could spend time with him. Without grandparent support, Reshmi would have to work fewer days.
The Albanese government has increased subsidies and removed the activity test, essentially guaranteeing at least 72 hours of subsidised childcare at a registered childcare centre a fortnight for eligible families regardless of how much the parents work.
While this initiative and the $1 billion allocated to building or expanding 160 centres in childcare deserts are expected to improve accessibility and affordability over time, safety issues, says Hill, are “an added layer of concern for parents that go well beyond availability and cost”.
Hill attributes this to the fact that most childcare centres in Australia are run for profit, which she says undermines the likelihood of well-trained, well-paid staff delivering a high-quality service.
Nationalising the childcare system – bringing these private services into public hands – would turn early childhood education and care back into an essential service rather than a profit-driven business, but upfront costs would be more expensive than Labor’s existing plans for universal childcare.
(Deloitte’s final technical report for the Early Education Service Delivery Prices project, a national data exercise to understand the costs of delivering safe and quality services across Australia, is due to the Department of Education in December).
Improving the government’s paid parental leave scheme, which some argue should be 52 weeks, would also be an expensive exercise. Although it was expanded to include superannuation in 2025, and from July 1, will extend from 24 working weeks to 26, the minimum wage rate locks out families who won’t be able to pay their bills or meet their mortgage.
While Tommy did take a month of employer-paid parental leave while Reshmi recovered after delivering Adrian, Reshmi says it would have been nice for him to have the option to take more later in the year, while Adrian was teething or sick.
“There’s those periods where you really can’t plan for it,” Reshmi recalls of when Adrian had hand, foot and mouth disease while both parents were working. “It just feels like your world is falling apart.”
Employer-paid parental leave schemes are inconsistent. While they are becoming increasingly generous and gender-neutral, data from the Workplace Gender Equality Agency shows that men account for only 17 per cent of primary carer parental leave taken. The 2024 National Working Families Report said entrenched gender stereotypes in the workplace mean men often feel unable to take much of the leave on offer.
“We need the care, infrastructure and workplace policy settings that are fit for purpose and support parents and extended family and community to support kids,” says Hill.
“We’re a wealthy country. There’s so much more we could do to make it a great place to have and raise kids. I think we could start by putting children at the centre of our policymaking and developing policy settings that support those who care for them.”
*The sample size for these particular poll questions was small. The weighted base for those who are choosing not to have more than one child is 68, and for the question regarding what is needed to have more children, it is 263.
Start the day with a summary of the most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.
