Australia’s declining birth rate impacts on nation’s economy

NextAustralia has long relied on strong population growth to support the economy, but is expected to welcome 56,000 fewer babies a year from 2019 to 2024, leaving a vast hole in the federal budget. This estimated deficit is due to the recession as well as unrealistic pre-coronavirus forecasts of a birth surge, according to analysis […] The post Australia’s declining birth rate impacts on nation’s economy appeared first on Newborn Baby.

Australia’s declining birth rate impacts on nation’s economy

Australia has long relied on strong population growth to support the economy, but is expected to welcome 56,000 fewer babies a year from 2019 to 2024, leaving a vast hole in the federal budget. This estimated deficit is due to the recession as well as unrealistic pre-coronavirus forecasts of a birth surge, according to analysis compiled by Australian National University demographer, Professor Peter McDonald.

The 2019-2020 budget assumed a rise in the number of children born to each woman, but instead the birth rate was falling even before the pandemic, which has further impacted the figures. The coronavirus crisis has brought with it such uncertainty and unknowns, so many people will delay starting a family until closer to 2024, rather than going on to have their second or third child by then.

The impact on the budget and the economy could be long-term

BIS Oxford Economics’ chief economist, Dr Sarah Hunter, explains that lower fertility ultimately reduces the size of a nation’s labour force and therefore how big the economy is on a long-term basis. The issue is that people will need to feel confident about the nation’s economy if they’re to have babies.

The government will have find a way to encourage birth rate

The government must create a plan for jobs and economic growth. Demographer, Dr Liz Allen, says that reforms must put families at the centre, that build work practices to encourage gender equality and societal structures that support them.

 

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