Charlie Nelson
July 2002
Malcolm Turnbull, Chairman of the Menzies Research Centre, has called for policies for more people to marry and to have more children (The Age, July 16, 2002). His arguments are wrong-headed and the debate that has been sparked is dangerously missing more important issues facing this country.
He claims that in the absence of massive immigration our declining fertility will result in our population declining and over time we will simply die out. This is nonsense. Our fertility rate has stabilized at 1.7 babies per woman. Even if there were no migrants, Australian Bureau of Statistics projections show that our population would continue to increase to 20.9 million in 2028 and then decline to 19.2 million in 2051. Even a modest level of immigration will ensure continued population growth.
Of course we should have family-friendly policies. But Australians comprehensively rejected Turnbull’s vision of young marriages and high fertility decades ago. In 1961, the fertility rate was 3.55. That was the year that the contraceptive pill was introduced into Australia. By 1975, the fertility rate had dropped to 2.15. Couples had rejected large families when they had the means to control fertility. In 1975, no-fault divorce law was introduced and the fertility rate slipped below replacement fertility before 1980. The genie cannot be put back in the bottle. Turnbull’s vision is not attainable.
The Australian Financial Review, in its editorial of 19 July 2002, said that a practical reason for encouraging women to have more children is to slow population ageing and increase population growth, providing larger markets for business in Australia.
The size of the economy is influenced by many factors and population size alone will not guarantee a strong economy. There are many counter-examples. There are countries with larger populations than Australia but with smaller economies. A good example is Argentina, a country with similar potential to Australia about 100 years ago. Their population is nearly double ours but per capita income is only just over one-third of ours. There are countries with smaller populations but with higher per capita income. A good example is Singapore. Their population is about one-sixth of ours but per capita income is 20% higher.
Australia’s Prime Minister Mr Howard has told us that “there is no alternative to globalisation” and the Australian Financial Review has supported him. In a globalised world, surely our international competitiveness is more important than our population size. This means that policies to improve productivity, innovation and marketing are more important than domestic population growth.
Of course we should have reasonable financial compensation for women to temporarily leave the workforce to have children. But such a policy does not compensate for loss of promotional opportunity, loss of intellectual stimulation, and loss of social contact. Even Mr Howard agrees that maternity leave will do little for Australia’s birth rate on its own.
Even if we succeeded in significantly boosting Australia’s birthrate, it would come too late to save the budget. We need to invest in maternity wings at hospitals, classrooms and computers, train obstetricians, mid-wives and teachers. These things cost money. By the time policies were devised and implemented, the large Baby Boomer generation will be retiring in droves (in 2010) and demanding retirement income and health services. To finance both a new baby boom and the retirement of the old baby boom simultaneously will require a massive increase in taxation.
If we wanted to introduce pro-natal policies, it should have been done in the late 1970’s, when the problems we face now first became evident. When Mr Howard was Treasurer in the Fraser Government. He had the opportunity then. It is too late now.
The Australian, in its editorial of July 20-21 2002, says that without the renewal and fresh ideas brought with each new generation, our society, and not just our economy, would be in long-term decline. But our economy is growing rapidly and does not face long term decline. And we haven’t stopped having babies. Projections by foreseechange show that there will be about 250,000 babies born each year between now and 2010. Is that not enough to ensure fresh ideas? If not, how many are needed?
More important than the number of babies we make is how clever we make them. If we want to be internationally competitive, government policy should focus on developing world-best education for our children, and on productivity growth and investment in innovation. Not on trying to build an impossible time machine to transport us back to the 1950’s.