Most developed economies are facing problems associated with a declining birth rate. Coupled with an increase in women’s workforce participation, a more highly educated and ambitious female workforce, and greater control over reproduction, women are choosing to have fewer children. In the long term, a declining birth rate will mean our country will not have a workforce large enough to sustain our ageing population. The fertility rate in Australia is now 1.7 children per woman. The population replacement rate is about 2.1 children per woman.
Thus far in the federal election campaign we’ve heard a little from all sides about supporting working mothers through a range of different policies. But which one provides the best incentives and is the most appropriate in supporting women’s choices in child-rearing, whatever those choices might be?
The Labor Party has announced that, if elected, it will increase the child care tax rebate from 30 to 50 per cent, covering up to $7,500 in child care expenses. Child care is part of the story, but unfortunately it does not go to the heart of why women aren’t having babies. I have a problem with the focus on child care as a solution . Women should not be forced back into work. They should have the option of taking care of their own children and spending time in those important early years to develop strong bonds with their infant. Women should not be forced to abdicate their role instilling in their children the values, ideals and principles they feel are important to the psychological and general development of their child.
The Democrats have their hearts set on paid maternity leave. In September 2007 they introduced legislation to establish a government-funded scheme that would provide all working women with 14 weeks leave at the minimum wage (currently the Federal Minimum Wage is $522.12 per week) on the birth or adoption of a child. This is a total of $7,309.68. This policy fails to support both stay-at-home mums and self-employed women. Are these women not deserving of government support to defray the cost of raising a child?
Unfortunately, all these policies seem short of ideal. Child care tax rebates fail to assist mothers (or fathers) who rightly choose to stay at home and take care of their children. The Coalition Government’s Baby Bonus, which is a lump sum payment of $4,187 (to increase to $5,000 from 1 July 2008) given to parents on the birth of their child is a cost-effective way to lead to a small increase in the number of people having babies. It could be built upon to incentivise more women to have more children. It could, for example, increase depending on whether a woman gives birth to her second or third child, as is the policy in Singapore. It is, after all, the aim of the government to increase the fertility rate; that is, to increase the number of children that each woman has. It would therefore make sense to incentivise women more for each additional child they have.
Peter Costello would like all couples in Australia to have three children: one for the mother, one for the father and one for the country. We’ve heard the sound bite over again and I’m sure Mr Costello will be happy that this is the quote for which he is remembered.
But it is something of which we should take heed. A declining birth rate signals the onset, in the long term, of two bad economic problems. First, our economy will face the incredible task of paying for a burgeoning health and welfare budget brought about by an ageing population, but with a smaller workforce. Secondly, if our economy continues to grow in the same way it has over the past 10 years for the foreseeable future, our economic capacity will be further constrained by a smaller workforce.
Of course it’s good to promote such a policy, but I can only wonder if reluctant parents are concerned about more than just financing their children’s up-bringing for the first few months of birth. Perhaps there’s more than just initial government assistance that’s stopping young couples joining the world of parenting.
Perhaps it’s something to do with the appalling condition of public schools and public transport. Perhaps the current trend of sliding standards in our state schools, the lack of well-qualified teachers, and the consequent push this places on parents to finance their children’s schooling in the independent sector has something to do with it. Perhaps this additional cost is enough to turn would-be parents off the prospect of bringing another bundle of joy into this world.
Perhaps it is the absence of public transport. Families in the growing North-West and West of both Sydney and Melbourne have difficulty just getting themselves to work each day, given the lack of public transport. Let’s not even mention the three tolls imposed on them to get to the city. Taking one child to Saturday sport is enough, without having to navigate across town for the second, or third child. The lack of infrastructure, of well-connected suburbs , might be a significant factor in why young people are not having children, or are having fewer. After all, it’s these everyday irritations and stumbling blocks that truly matter to people.
Peter Costello’s mantra of having three children is a sound idea followed up with good Government assistance. But the Federal Government can only do so much. If parents remain concerned that private schooling is the only way to go, $4,187 might not be enough to allay fears that a good education might be out of reach of many would-be Australian parents.
But that’s something I think we’ll have to wait for until we can put pen to paper at the next State Government election.