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.