Australia's $36,500 Family Bill: Costs Outrun Pay as Childcare Grows

Raising two or more children in Australia now costs at least $36,500 a year, according to research from The Parenthood. The Guardian

The research puts the rise in family costs at 134% over two decades. Household income grew by 102% over the same period. Costs rose faster than pay.

Childcare explains much of the change. It now makes up 33% of the total cost of children, up from 27% in 2003, according to analysis by Connell Griffin. Housing, food and transport make up the rest.

The Parenthood, a national advocacy organisation, published the numbers before a scheduled speech by its chief executive Georgie Dent at the National Press Club in Canberra. The Sydney Morning Herald The group counts more than 80,000 parents, carers and supporters in its network. ABC News

Dent was scheduled to say that having children lowers the earnings of Australian women by an average of 55% over the first five years of parenthood. The argument focuses on labour-force participation, or whether mothers stay in paid work, and on what economists call the motherhood earnings penalty. Australia now offers 26 weeks of taxpayer-funded paid parental leave. Dent was to call for a path to 52 weeks.

Treasurer Jim Chalmers said the government is still committed to a universal childcare system, where access does not depend on income or job type. The government asked consulting firm Deloitte to help design that system, with a report on the path forward due before the next election. No bill has been introduced. Questions of design, cost and timing are still open.

Australia's intergenerational report, the government's long-term population and budget forecast, projects fertility will fall to 1.34 by 2065-66, from 1.5 children per woman in 2030-31. It projects that in 40 years, deaths will outnumber births for the first time. Fertility has been below the replacement rate of 2.1 children per woman, the level needed for a generation to replace itself without migration, for 50 years.

The broader context here is generational, not a normal business cycle. Like two roads slowly moving apart, costs and incomes have separated over 20 years. When childcare takes one dollar in three, family choices can shift. Fewer births then add strain to tax income and support for an older population.

Looking at what this means for policy, two levers count most. Paid leave protects income in year one. Childcare shapes whether parents can work in years two to five. Dent connects the 55% five-year pay gap to 52 weeks of leave plus universal care. The test will be staff numbers, subsidy design and taper rates, the rules for how support falls as family income rises. The Deloitte report should set out the price. It will not settle who gains most.