For the good of the nation

DURING THE 2004 Budget Lock-up, Federal Treasurer Peter Costello made one of those remarks that serve to encapsulate an entire policy debate. Discussing Australia's ebbing birthrate, he said: "You know, if you can have children, it's a good thing to do. You know, you should have, if you can ... one for your husband and one for your wife and one for your country."[i]

The furore this remark aroused underlines the gathering intensity of an uneasy dispute over population policy. Should Australia produce more children or, as some contend, welcome the collapse in the birthrate to lower the total population?

What was on Costello's mind was that the average number of children being born was well below the 2.1 children per woman needed for the population to replace itself. For 2003-04 it was 1.773.[ii] Australia is not alone, all the European countries and Japan are also below replacement. In the long term this is a recipe for extinction.

Costello's imprimatur on the three-child family marked the completion of an eight-year evolution in the political approach to families by the Australian Government. Recognition of the consequences of the failing birthrate gave family policy a new economic importance. Since it was elected in 1996, this government has introduced a succession of random, family-related initiatives aimed at holding support in marginal electorates. In finely tuned media statements, handouts of small amounts of money were announced: state by state, electorate by electorate. Small allocations were regularly recycled, with a bit added and announced again, as though new. The very professional Coalition political machine refined the art of milking each announcement for maximum electoral impact.

Beneath the smoke and mirrors lie three separate phases of the Government's family policy. In the first two year phase the policy emphasis was on encouraging mothers to stay at home or, as the Prime Minister put it, returning freedom of choice to child rearers.[iii] This attitude was stigmatised by feminist commentators as a return to the fifties. Between July 1996 and 1999 the child-care industry was rationalised, 280 community centres closed, though more than 550 new private centres emerged.[iv]

As the critical comment grew the Prime Minister demonstrated his political adroitness and adopted a more diversified approach to family policy. The second phase lasted six years and continues to resonate. It was characterised by pragmatic family-friendly statements, many small schemes and programs, and attempts to maintain the political support of working women. According to the office of Family Services Minister Kay Patterson,[v] the result was a doubling of child-care places from about 300,000 in 1996 to about 600,000 eight years on. In 2000, the government rolled several benefits into a Child Care Benefit and by mid-2005, the number of children in child care reached 786,700, a 23 per cent increase.

The third phase followed Delphic warnings about the plummeting birthrate as politicians heard what the demographers had been saying for years. Family policy was now about the good of the nation. It was epitomised in the 2004 Federal Budget by the spectacular announcement of a new payment of $3,000 from July 1, 2004, for all new mothers, irrespective of income, rising to $5,000 from July 1, 2008. This payment incorporated previous allowances, but as a sizeable, one-off lump sum it signalled the emphasis was now on having babies. [vi] To reach the target of population replacement would require 301,615 babies in 2003-04 – 46,966 more than the number born. [vii]

Renewed interest in higher birthrates is underpinned by the pending surge in the number of retirees. In about six years, those over 65 will represent 14.7 per cent of the population, compared to 12.9 per cent now, each supported by 4.6 workers compared to 5.2 now. By 2021 the over 65s will become 19 per cent of the total, each supported by just 3.4 workers.[viii] Even if new family policies set the birthrate climbing again, it will be at least 20 years before these babies enter the workforce. Australia really needed a boost in the birthrate fourteen years ago to produce a generation of workers ready to clock on in six years as baby boomers retire. On the population clock, it isn't five minutes to midnight, it's fourteen minutes past.


THE FIRST PHASE of family policy from 1996 has been repeatedly characterised by critics by the "white picket fence", stemming from the 1988 Future Directions document issued by John Howard as Federal Opposition Leader. It featured a nuclear family behind a white picket fence on the cover.[ix]

From 1996 to 1998, the pressure points for opponents of the Howard Government's policies were child-care places and the reworking of tax and welfare structures to favour stay-at-home mothers. The Family Tax Initiative, which started on January 1, 1997, introduced the celebrated distinction between Part A tax relief, available to everyone, and Part B assistance, which provided targeted benefits to single-income families. Interpreted by many critics as a rebuff to working mothers, it became a lightning rod for sustained criticism and the extra concessions for affluent families with large families with a single breadwinner drew criticism.

The other divisive issue was child care. Most childminding is informal; babies and toddlers are minded in neighbours', friends' and family members' homes, often part of the untaxed cash economy. Formal child care divides into not-for-profit community-based centres[x] and private for-profit centres. Private operators had complained that the community-based centres were advantaged by an exclusive operational subsidy under Labor. This was axed in the 1996-97 budget – the lion's share of child-care cost savings of $546 million.[xi]UnitingCare researcher Sue Leppert estimated this forced fee rises averaging $20 a week per child.[xii] Some local councils and state governments intervened with compensating payments but, over time, there were piecemeal closures of community centres around the country.

Operational subsidies were retained for family day care in private homes, occasional and outside-school-hours care and multi-functional services. The $526 million benefit cited was enhanced by quoting the total for four years. In July 1999, what became the Department of Family and Community Services (FaCS) updated the key statistics and showed that places in community-based centres rose from 45,600 in 1996 to 51,700 in 1998, but private places increased from 122,500 to 142,900, so community-centre places share fell from 31 per cent to 27 per cent.[xiii]Despite the overall rise, there were many reports of individual centres closing, working women reducing work hours to save on child-care costs.[xiv]

Tracking through the fine detail of Government measures, with all the minutiae of technical tuning by the Treasury (an indexation postponed a year here, a cut-out point dropped slightly there) can lessen the focus on the broad issues. During the first two to three years of the Howard Government, the real child-care issue was the contention that the intention was to pressure working women back home. This was something the Prime Minister denied. With an election looming, John Howard chatted to 2GB Sydney talkback host Mike Gibson on August 14, 1998:

GIBSON: What do you say again to those who claim that by directing assistance so heavily in the direction of single-income families that you are discouraging women from remaining in the workforce? Do you want Australian women back in that kitchen behind that white picket fence?

PRIME MINISTER: Well, that is ridiculous, I don't. All I am doing in that area is removing some of the tax bias against single-income families ... I am not about sending people back to the kitchen or the 1950s, I am about giving the men and women in Australia in the 1990s greater choice in relation to the caring arrangements for their children.[xv]

Not everyone was convinced. The 1997-98 Budget reform package had been presented as giving more equitable access to subsidised child care for families and better distribution of new child-care places. In reality, it continued the attempt to control centre growth in the immediate future, with the promise of relaxation a couple of years later. The Opposition-controlled Senate had launched a Senate inquiry into child-care funding earlier that year. The Government defended the changes by pointing to the "unfair" subsidy of community centres, but the adverse overtones of "child-care centre closing" were seeping into the minds of those planning for the next federal election.


THE HOWARD GOVERNMENT won the 1998 election and moved into phase two, cultivating a family-friendly image. It used the introduction of the Goods and Services Tax to rationalise the confusion created by piecemeal announcements and ad hoc electoral promises. Family assistance packages were cut from twelve to three, benefits increased, income and asset tests eased and taper rates liberalised. The extent of the clean-up illustrated how the random processes of short-term policy-making and social-welfare handouts for elections had cluttered the tax and benefits system.

Two years later, an initiative that epitomised the random role of family policy as a happy hunting ground for handouts and homilies was announced. Without prior warning, the Prime Minister announced that an additional $240 million would be made available over four years for a Stronger Families and Communities Strategy. This was aimed at prevention and early intervention measures for families with problems, and improving social cohesion. Media people were told it was designed to demonstrate the government's softer side. Family and Community Services set out to flesh out the detail. In due course a pie chart was produced showing how five family and four community initiatives would soak up the funds. There was $65 million for greater flexibility and choice in child-care provision, $46 million for early-intervention support, $40 million for a stronger-families fund, $37 million to identify potential leadership in local communities, $16 million for the international year of the volunteer and national skills development program and $15 million to find local solutions for local problems. The last three items were $8 million for a national communication campaign, $6 million for a longitudinal study of Australian children and $5 million for Community Be In It – Can Do Community.

The program was extended for five years in 2004. By this time, a national agenda for early childhood, community leadership and mentoring had been developed. By 2004, funding had been provided for 142 early-childhood programs, 99 parenting skills programs, 51 relationship skills programs, 188 mentoring and leadership programs, 97 community building programs and 63 programs to encourage volunteering. About half the money was spent in regional and rural areas around Australia and about a quarter went on indigenous programs. It demonstrated the Government's interest in social-policy while toning down controversial initiatives.


THE DECLINING BIRTHRATE bubbled to the surface for the first time in the 2001-02 Budget. "The number of children being born each year has begun to decline reflecting both lower fertility rates and a decline in the number of women in the peak child-bearing age group. After rising in the first half of the decade, the number of births in 1999 was 248,870, which was over 9,000 fewer than in 1994 ... Over the longer term, the combined effect of falling births fertility and population ageing will increase the number of retired people relative to the number of working-age people, which will have implications for the social security system in the decades ahead."[xvi]

But it left it at that: the emphasis was on getting the jobless back to work and the role of older people. It did not canvass possible links between the declining birthrate and the cost of child-care, or that the rising cost of housing was putting pressure on families, requiring two incomes. Others made the connection though. In August 2001, Dr John Buchanan and Dr Louise Thornthwaite of the University of Sydney reported: "It is now clear that many people are dissatisfied with the balance in their work and parenting lives, and the situation is deteriorating." They recommended maternity and paternity leave, a comprehensive, quality child-care system, more flexible workforce rostering and a Cabinet subcommittee to monitor work and family issues.[xvii]

For Victorian Liberal Kevin Andrews, then Minister for Ageing, the challenge was procreate or perish. "For more than two decades, our fertility rate has been below what is required to sustain the population. It is currently 1.7 babies per woman, and is expected to drop to 1.5 ... As well as encouraging childless couples to have children, the real emphasis must be on encouraging families that have one or two children to have another." [xviii] His colleague the Liberal member for Adelaide, Chris Gallus was not convinced, she saw in the rhetoric an attempt to push women out of the workforce. Nonethless the three-child family entered the public agenda.

Andrews drew on the research by the British academic Catherine Hakim, author of Work-Lifestyle Choices in the 21st Century (Oxford University Press, 2000).[xix] Hakim divides women into 20 per cent who are work-centred, 20 per cent who are home-centred and the 60 per cent majority as adaptive (they'll stay home and breed if it pays, work if they must). The responsiveness of this group to government social policy, employment policy, gave Andrews heart. "If that is the case, that is further argument for beginning to tackle the fertility issue, as opposed to seeing it as too hard."[xx]

The following year, Hakim spent three weeks in Australia advising government figures including the Prime Minister. Her message was simple: "Many home-centred women resent their husbands' taxes being used to subsidise child care for women who 'cannot be bothered' to look after their own children." [xxi] Feminist author Anne Summers responded: "Working mothers have to hope that Mr Howard does not pick up any more of Hakim's nostrums, especially her wrong-headed notions about child care."[xxii]

John Howard generated the signature phrase for this debate while addressing a celebratory Liberal Party dinner in the Aston electorate in Melbourne on July 16, 2002. "Nothing is more important than the debate that goes on in the community – I call it a barbecue stopper – about the balance between work and family," he said. "Barbecue stopper" has become shorthand for the debate ever since. [xxiii]


THE OTHER KEY publication underlying the change in government attitudes is the seminal 37-page monograph by Dr Lucy Sullivan, The Influence of Income Equity on the Total Fertility Rate (Menzies Research Centre, 2003). [xxiv]In a sober and detailed analysis of fertility trends in Australia and Europe, Sullivan concluded that the underlying issue affecting fertility rates was economic: the sacrifice a person at any income level was prepared to make to start a family.

In Australia, while a low income remains a low income, social welfare ensures that there are few penalties for having a family. Policies of welfare and tax concessions benefited lower-income earners with "targeted benefits". By contrast, for higher-income groups, getting married and having babies meant a precipitous drop in real living standards, matched by reduced fertility. Sullivan argued that if the policy-makers wanted to encourage more births within higher-income families, there was a need to reduce the financial penalties. This sidestepped previous arguments that measures such as Family Tax B unduly advantaged single-income-breadwinner families vis-à-vis ones with working mothers. It shifted the debate to a contrast between families with two or three children, at whatever income level, as against well-off childless couples.

Chairman of the Menzies Research Centre, Sydney financier and subsequently Member for Wentworth, Malcolm Turnbull, wrote in the foreword: "There is no greater threat to Western society than the decline in fertility. Whole nations face the prospect of social collapse and even extinction within a century or two ... a society which cannot reproduce itself has surely embraced a cultural death wish." [xxv]

Wayne Swan, then the shadow minister for families, saw a "sinking middle" in the way that benefits were allocated. He said in early November 2002: "It is a ticking time bomb that we need to address now or face the economic and social consequences of an ageing population and a childless society – a withered nation. The birthrate debate isn't about those who choose not to have children but those who do have one but who cannot afford the second or third child they want."[xxvi]

With an election due later that year, the 2004-05 Budget showcased major initiatives in family policy. The impact of Sullivan and Hakim was clear. There would be a new non-means-tested maternity payment, family benefits and more family day care and after school child care places. This was definitely a family-centred budget. Or, at any rate, a finely crafted election package. [xxvii] While the budget papers claimed that the total number of child-care places had risen by 266,000 since 1996, by 2004 the average weekly fees ranged from $204 to $251 per child, a large proportion of the average weekly female wage of $828. [xxviii]

The tension between the desire to increase the population and the economic realities of the cost of children came to a head on March 2, 2005. Bronwyn Bishop, chair of the House of Representatives Standing Committee on Family and Human Services, announced an inquiry into the balancing of work and family. "Australia's fertility rate is currently at 1.7 per couple, which is below that required to replace our population. This has been a major contributing factor to an ageing Australia and one that will see our population shrink over time. It is worth noting that despite Australia's declining birthrate, recent studies have shown that most young Australian adults want to have children and most parents with one child want to have another. However, many are delaying child-bearing and are having smaller families than they originally desired."[xxix]The inquiry will probably report in mid-2006, after coping with an astonishing public response. [xxx] This means the 2006-07 Budget will be presented against the backdrop of this pending keystone submission.

The extent to which the need for population growth and the need to address the skills shortage wins over any ideological desire to keep women with small children at home will be clear in the 2006-07 Budget. If new policies aimed at encouraging families to have third and fourth children prevail they will need to be accompanied by a continued expansion of affordable child-care places, or the barbecue chatter may become even shriller. 


[i] Australian Broadcasting Corporation, 7.30 Report, 26th April, 2005. Rerun of earlier clip.

[ii] ABS: 3101.0 Australian Demographic Statistics. Dec, 2004. P. 22.

[iii] Prime Minister, Q & A. South Australian Liberal Party State Council, 15th August, 1998.

[iv] Department of Family and Community Services. Update of key statistics relating to the Commonwealth Child Care Program. July, 1999.

[v] Email from office of Senator Kay Patterson, Minister for Family and Community Services, 30th August, 2005.

[vi] Senator Kay Patterson, Minister for Family and Community Services, "Record Family Assistance, more Child care and boost for Carers in 2004-05 Budget", Budget media release, 11th May, 2004.

[vii] ABS: 3101.0 Australian Demographic Statistics. Dec, 2004. P. 22.

[viii] ABS: 3222.0 Population Projections Australia. 2002-2101. Sep, 2003. P. 44. B series.

[ix] Greg Barns. Columnists. Crikey on-line. "Greg Barns on the Latham Way", 5th April, 2004.

[x] Department of Family and Community Services. Childcare in Australia. An update of key statistics relating to the Commonwealth Childcare Programme.

[xi] Budget, 1996/97.

[xii] Sue Leppert, UnitingCareAustralia. Child Care at a Crossroads: Impact of Federal Government Funding Cuts on Community Based Child Care Family Futures. Issues in Research and Policy, 7th Australian Institute of Family Studies Conference Sydney, 24-26 July 2000.

[xiii] FaCS. Childcare in Australia. Op cit.

[xiv] Ibid, p. 2.

[xv] Transcript, 14th August, 1998. Prime Minister and Mike Gibson, 2GB.

[xvi] Fact Sheet 12. Australia's Commonwealth Department of Health and Family Services, Budget Document 1997-98.

[xvii] ACIRRT. University of Sydney. Dr John Buchanan and Dr Louise Thornthwaite. Paid Work and Parenting: Charting a new course for Australian families. Report for the Chifley Foundation. University of Sydney, August, 2001.

[xviii] Kevin Andrews. The challenge: procreate or perish. Online Opinion, Sunday, 15

September 2002.

[xix] Catherine Hakim. Work-Lifestyle Choices in the 21st century. Oxford University Press, January, 2001.

[xx] Kevin Andrews, op cit.

[xxi] Quoted in Anne Summers. Message is still the Same: stay home. SMH, 3 March, 2003.

[xxii] Anne Summers. Message is still the Same: stay home. SMH, 3 March, 2003.

[xxiii] 16 July 2002. Prime Minister's address, Aston Electorate Dinner, Melbourne.

[xxiv] Dr Lucy Sullivan, Dr Lucy Sullivan, The Influence of Income Equity on the Total Fertility Rate (Menzies Research Centre, 2003).

[xxv] Malcolm Turnbull. Foreword, Dr Lucy Sullivan, The Influence of Income Equity on the Total Fertility Rate(Menzies Research Centre, 2003).

[xxvi] Wayne Swan. Families: the sinking middle, Online Opinion, Friday, November 08, 2002.

[xxvii] More Help for Families, 2004-05 Budget Papers, 11 May, 2004.

[xxviii] QON No 1135, received August 2005, weekly figures arrived at by multiplying

daily figure by five. ABS 6306.0 Employee earning and hours, Australia 2004.

[xxix] Bronwyn Bishop, Chairman, House of Representatives Standing Committee on Family and Human Services. Media Release, 2nd March, 2005. Bishop Launches new inquiry into balancing work and family.

[xxx] Information from Committee sources, 2nd September, 2005.

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