Cost of living pressures impacting national birth rate
KPMG economist, Terry Rawnsley, says cost of living pressures are having an impact on the national birth rate dropping to its lowest level in almost two decades.
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00:00What we saw is when we looked in the various regions, we saw places like Sydney, Melbourne,
00:06Brisbane and Perth had the biggest drop-offs, and they're the places which are probably
00:09experiencing those biggest cost of living challenges.
00:13We saw a pretty consistent trend across those big capital cities with sort of 5 to 10% declines.
00:18In the regions, we kind of saw a much more, you know, muted fall, sort of heading back
00:22to where they were 2019.
00:24So the regions kind of went through a bit of a surge of people moving out there, you
00:28know, during lockdowns in the major capital cities, starting their families, but now it
00:31seems to have returned to normal.
00:33You know, somewhere we did see a sort of relatively solid growth was in Canberra, its birth rate
00:39sort of ticked up a little bit during the most recent year, but the trend across the
00:43country is pretty consistent.
00:44So this sort of downward trend of fertility rates been around for sort of, you know, basically
00:48since the 70s, but probably the size of the drop-off in 2023 was kind of the surprise.
00:54It kind of stabilised around sort of 315,000 births in Australia over the last sort of,
01:00you know, 10 years, putting aside the COVID peak and trough, but now we're sort of down
01:05in sort of, you know, 290-ish.
01:07So the drop-off is pretty noticeable, and the concern is that moving forward, we might
01:11see that fertility rate continue to decline to sort of one and a half children per woman,
01:17which kind of puts us in a bit of an awkward demographic situation.
01:20When you look across the city, you know, places with more affordable housing, so tend to be
01:23those sort of green fields in south-western Sydney or western Melbourne, they're the ones
01:28where birth rates are kind of still sort of 2.2, 2.8 children per woman.
01:33You sort of look into the inner city suburbs where housing is more expensive, houses are
01:37smaller, and the birth rate there is much lower.
01:41So you can kind of link together these different data sources to say that cost of living is
01:46having an impact on people's decisions.
01:48Long term, we've had this problem for, you know, 20 years, and it sort of means that
01:53we've got less workers entering the labour market.
01:55So every year into the future, as the birth rates kind of flow through, people complete
02:00school.
02:01We're having a challenge finding tradies, healthcare workers, a whole range of different
02:05service workers because our population's birth rate's not keeping up with our growing population.
02:11There's been kind of quite a focus about sort of some policies in this area, thinking about
02:15paid parental leave, you know, improvements to childcare affordability and availability.
02:20And I suppose what we see looking back at the data, it's really that economic conditions,
02:25how confident households are feeling about the future, which seems to be the main driving
02:30factor.
02:31So whilst we can keep improving paid parental leave, improving childcare access, there's
02:35sort of a broader fundamental sort of economic confidence for people to go out there and
02:38have children.