Jaimee Rogers:
Welcome back. I’d like to delve deeper now into the declining birth rate issue because while it’s not making headlines, it will have enormous long-term impacts on our country. Joining me now is Saxon Davidson, Research Fellow from the Institute of Public Affairs to explain why this matters and why it’s been overlooked. Saxon, thanks for coming on. This has been described as a catastrophic decline in birth rates. Are we sleepwalking into a long-term economic problem here?
Saxon Davidson:
I think we absolutely are. The matter of the fact is that we are heading towards a situation where the dependency ratio between older Australians and working age Australians is simply going to become too high. At the last intergenerational report released a couple years ago by the Albanese government, it said that in 50 years’ time, the dependency ratio is going to be about 40%. That’s 40% of people over the age of 65 for every 100 people of working age here in Australia.
And it’s a significant economic problem, because these working Australians are going to be the tax base to subsidise older Australians who will require care, obviously, as they get older. And this is even compounded by the fact that the federal budget is incredibly focused and is incredibly subsidised by income tax alone. So this is a significant economic issue and we are definitely sleepwalking towards it as a nation.
Jaimee Rogers:
Well, Peter Costello has said that it looks like it’s fallen off the agenda and that he wishes the baby bonus that he started back in 2002 had continued. Here he is.
Peter Costello:
I just wish it had continued, frankly, because once you have a declining fertility rate, it puts your society on a roadmap, which is set in stone for 20, 30, 40 years. And it’s very hard to turn it around again.
Jaimee Rogers:
So the baby bonus was abolished after five years. Do you think programmes like that do ultimately help the declining fertility rate?
Saxon Davidson:
I believe it does. I mean, we have seen with some success the programmes under Viktor Orban in Hungary and how it’s sort of reversed the decline in birth rates there. But I think that the eliminating of the baby bonus and the lack of a reintroduction of an equivalent programme shows the shortsightedness of the political culture we have here in Australia, where we only seem to address things when they’re immediately in front of us, and our political culture is absolutely surrounded by this view. And the sort of mass migration programme is the perfect example of this. We have low economic productivity and would otherwise be in a recession. We’re just going to have a mass migration programme to sort of bump up the economy. And it’s the same with the birth rate here to create a sustainable population increase.
Jaimee Rogers:
Well, let’s talk about that mass migration. We have seen 1.2 million in migration in just three years. How much has this added pressure on housing, infrastructure, and cost of living that’s making it even harder for young Australians to be able to start families?
Saxon Davidson:
It’s added significant pressure to all of those factors, but specifically housing, considering the other conditions that we have that affect housing as well. There has never been more red tape currently in Australia, either at the federal law and every state government level either, which obviously stops the production and the manufacturing of homes, but we’re also living in a quite severe worker shortage and construction is not immune to it. In fact, construction’s actually had a significant increase since the pandemic in the amount of job vacancies available. And this means that not only is the federal government’s surcharging demand for housing through their mass migration programme, but also the supply of housing isn’t occurring either, and it’s really creating a perfect storm for the housing crisis that we’re witnessing right now.
Jaimee Rogers:
Well, what do you think would be a good first step for the government to take to start turning this enormous issue around? Unfortunately, when you do have a budget that’s reaching a trillion dollars worth of debt, we don’t have that luxury of probably being able to do a baby bonus, but what do you think would be a good first step?
Saxon Davidson:
Well, I mean, we could reintroduce a baby bonus, but as you said, the budget is in quite systemic decline when it comes to deficits and also debt. If we are getting older as a country, we seriously need to reevaluate how we tax our older Australians as well. Australians on the age pension get taxed at effective marginal rate of 66% for every dollar they earn over a day and a half on minimum wage.
And if we’re going to have an extremely high dependency ratio, we need to reassess how we tax people after they reach the age of 65. So that’s one thing. And the other thing is we just need to build more homes. We just need to build more homes. We need to have the state governments and local governments get out of the way, reduce the amount of approvals and permit processes, and just get the job done and build homes because otherwise the cost of living isn’t really going to improve, especially since homeownership is the easiest and the best way for Australians to generate family wealth.
Jaimee Rogers:
Yeah. And when you read the statistics that first homeowners are now heading into their late 30s, it just shows how hard it is on so many different levels for these families and people wanting to start a family. Saxon, thank you so much for your time tonight. I really appreciate it.
This transcript with Saxon Daivdson talking on The Jaimee Rogers Show News Australia from 19 April 2026 has been edited for clarity.
