New Zealand First leader Winston Peters says his party would pay parents to have children if elected. The plan, called the Kiwi Kids Grant, would give families up to $45,000 in payments that would not be taxed, delivered through Inland Revenue.

Under the policy, parents with at least one parent who is a New Zealand citizen would get $5,000 a year for the first three years of a child's life. It would be capped at three children. Peters said New Zealanders are having fewer children and the country faces what he called a "population precipice." RNZ

Paul Spoonley, a demographics expert at Massey University, said the declining birth rate was "much more complex than simply providing a baby bonus." He said the current fertility rate — the average number of babies born per woman — is 1.53. That is about 25 percent below what is needed for the population to replace itself. He expected it would likely fall further to 1.2–1.3, similar to most of Europe, and called the decline over the past 10 years "very sharp." RNZ

The trend is backed by longer-run figures. New Zealand's fertility rate was 1.65 in March 2023 and had dropped to 1.52 by March 2024, according to Spoonley's published analysis. He has previously said New Zealand has reached a stage where both birth and death rates are low, meaning the population is getting older, more urban, with fewer young people, fewer workers and greater diversity. The Conversation

Spoonley said international evidence showed cash incentives for having babies might produce a "short-term blip" but do not stop the long-term decline in birth rates. He pointed to Sweden as an example. Sweden offers 480 days of paid parental leave — 90 of which grandparents can use — plus what Spoonley called an "extremely generous" package: free check-ups, child health clinics, extra insurance, tax-free cash for each child until age 16, and low-cost pre-school. Despite all of that, Sweden only saw a short-term blip, and its fertility rate is now almost the same as New Zealand's. RNZ

The Swedish comparison matters because Sweden's support for families is far wider than what NZ First is proposing. The Kiwi Kids Grant is a cash payment for the first three years of a child's life. Sweden's package covers children up to age 16 and includes paid leave, healthcare and early childhood education. If Sweden's much bigger package only produced a temporary rise in births before the rate settled back to New Zealand-like levels, it raises the question of whether a cash payment alone can make a lasting difference.

Spoonley argued the more important discussion was about immigration. He said immigration was one of the "few policy levers" available to grow the population, and that the country needed to talk about how many migrants it wanted to accept to offset the fall in births. RNZ

That view lines up with recent data showing a major turnaround in New Zealand's immigration numbers, with some parts of the country now seeing population declines instead of growth. New Zealand is going through significant demographic change, and falling birth rates combined with shifting migration patterns mean some regions could face population stagnation. The Conversation

Birth rates are falling around the world, and several countries have introduced policies to encourage people to have more children. The NZ First proposal fits that pattern. But Spoonley's evidence suggests the approach Peters has chosen has the weakest track record of producing lasting change.

The broader issue is the gap between what NZ First is offering and what the evidence supports. Peters has identified a real and accelerating problem, and Spoonley's data confirms how serious it is. But the policy on the table is, on the international evidence, not enough to match the scale of that problem. The party now faces the task of explaining how a cash payment would work where Sweden's much larger package did not, and of addressing the immigration question that Spoonley says matters more.