Rising living costs has forced many parents to reconsider whether they can afford to grow their families, with new data showing financial pressures has reshaped fertility decisions.
A 2025 Population Statement has shown that the fertility rate is expected to fall to a record low of 1.42 children per woman in 2025/2026, well below the replacement level of 2.1.
Fertility intentions in Australia has also been falling, but remain above the total fertility rate, the study has found.
Treasurer Jim Chalmers has released a statement confirming these findings and says the Albanese Government is rolling out policies to make it easier for Australians who want to grow their families.
“The Albanese Government is rolling out policies to ease pressure on families and make it easier for people to have children if they want to, including through the new Three Day Guarantee for early childhood education and care and expanding and enhancing paid parental leave,” Treasurer Chalmers said.
Source: Australian Bureau of Statistics
The Living Cost Indexes has recorded rises between 2.3 per cent and 4.2 per cent in the 12 months to the December 2025 quarter.
Childcare in Australia is becoming more expensive with costs rising faster than wages, despite government support.
Local hairdresser and mother of a newborn, Monique Yeaman has experienced first-hand the financial struggles of raising a baby despite the use of childcare subsidies.
“Childcare subsidy is a great help in putting our child in childcare even one day a week as fees are up of $150 a day,” Mrs Yeaman said.
“And childcare subsidies only cover around 50-60 per cent of daily fees.”
According to the Australian Competition and Consumer Commissions (ACCC) 2023 final report, hourly fees have been rising faster than both inflation and the capped amount allowed by the government.
“Financial pressure has changed our choice on having more children as the cost of everyday living has increased drastically.”
Source: Australian Government: Department of Education
While Australia’s total fertility rate rose slightly in 2021, it has declined each year since, falling to around 1.48 by 2024 and is expected to keep falling in 2026.
Over the same period, childcare costs have increased consistently, with average hourly fees rising from $10.15 in 2020 to $13.75 in 2025.
The contrast highlights a potential relationship between rising costs and declining birth rates, suggesting that increasing childcare expenses may be a contributing factor.
According to an Australian Parliamentary House (APH) document, the current HECS-HELP repayment scheme produces unequal financial outcomes for women.
The APH document also highlights that government support through Centrelink is insufficient as income support payments frequently fall short of the real cost of raising children, leaving families struggling to cover housing, childcare and basic necessities.
