Last week, the Australian Bureau of Statistics (ABS) released new figures that indicated that Australia’s fertility rate has fallen to an all-time low of just 1.58 births per woman, well below the replacement level of 2.1 children. Given that these figures were for 2020, it would be difficult to blame the pandemic for this decline. Most babies born last year would have been conceived prior to the coronavirus arriving in Australia in late January 2020. The impact of the pandemic on birth rates will be illustrated in next year’s figures.
There is clearly something else going on. Like most Western countries, Australia’s birth rates have been declining since the 1960s. At the beginning of that decade birth rates were averaging 3.55 children per woman; over the next four decades this dropped to 1.74 children. At the start of the century there was a brief baby boom, which inclined the birth rate up to over 2 children in 2008, before dipping back down to its current record low level.
The key social trends that have driven this phenomenon have been the positive increase in female education and workforce participation, and the declining influence of religion. When women are given the choice over their own bodies and how they want to live their lives, they choose to have fewer children. Yet there is another glaring indicator that is proving highly influential: The exorbitant cost of housing, especially in Sydney and Melbourne, inhibits family planning.
Governments (at both the federal and state level) have geared their policies toward protecting the sky-rocketing value of assets owned by the aging Baby Boomer generation. The price of housing has continued to rise during the pandemic despite there being no additional demand from migrants to the country. This dispels the notion that immigration is the key driver of rising housing costs. The market is not actually driven by people wishing to own a house to live in, but by those who buy houses as investments.
Astonishingly, homeownership has gone from the cornerstone of government social policy to a luxury purposely placed out of reach to younger generations. Houses are no longer homes but assets, the financial playthings of the old and wealthy, not a central pillar of the country’s social stability, the essential security which almost all other positive indicators are drawn from, and the domain from which Australian society can comfortably perpetuate itself.
Although self-interested entities, states obviously don’t have a perfect understanding of their own self-interest. Their policies can instead be driven by the self-interest of the actors who make governing decisions. Overlooking wider social benefits, or indeed the overall enhancement of national capabilities, is common. Analysis by the Australian Broadcasting Corporation (ABC) from 2017 found that the 226 politicians in both houses of the federal parliament at the time owned 525 properties between them. For these people, there is no incentive to find mechanisms for more affordable housing.
Although the declining birth rate presents the problem of a greater dependency ratio – the numbers of those who are working and those who are not – Australia has circumvented this dilemma in recent years with a generous migration program. From the 1980s onward the country began welcoming just under 100,000 people annually, with this accelerating to an average of 200,000 people since 2005, as Australia became more ambitious with its national goals.
Yet the pandemic has not just put a brake on these numbers, but thrown them into reverse, with the country losing close to 100,000 migrants over the past two years, creating Australia’s first decline in population since 1946. Many of these people were in the country on one of Australia’s array of temporary visas – which form a convoluted pathway to permanent residency – and found themselves with no safety net when faced with strict pandemic precautions that often made work impossible.
The enthusiastic manner with which Australia shut its borders – both external and internal – demonstrated the tensions and complexities of Australia’s national psychology. The country has opened itself up to the world over the past four decades and achieved great wealth, cultural flourishing, and enhancement of its capabilities as a result, but a timid isolationism lurks below the surface and can reappear in times of stress.
The concern for Australia would be the combination of this renewed isolationism and the inability of young people to effectively plan their lives due to the cost of housing initiates a period of national decline. A lack of individual confidence could swell to a lack of national confidence, limiting what the nation feels it is able to achieve, and making the country less capable of negotiating the shifting power dynamics in its region.
Governments must strive to understand how each of their policy components intersects with and creates emerging social trends. The state has a responsibility to provide the conditions that allow people the assurance to build the families that form the country’s future. The drop in Australia’s birth rates indicates that it is currently failing to provide this certainty.