The cost for Australian families of raising two or more children has risen to at least $36,500 a year, according to new research, with the money needed to run a family home increasing by 134% in two decades.
Data released by advocacy group The Parenthood on Wednesday shows household income has only grown by 102% in the same period, with childcare costs making up 33% of the total cost of having children today. In 2003, the figure was 27%, according to the analysis by firm Connell Griffin.
The $36,500 a year figure covers two or more children in total, and has grown by about 96% since 2003. Costs for larger families accelerated sharply in the early 2020s, suggesting recent economic conditions and persistent inflation have hit multi-child households especially hard.
The higher cost of having two or more children reflects expenses such as food, personal care, clothing, recreation, household goods and services, health, transport, education and other discretionary costs.
Parenthood chief executive, Georgie Dent, addressed the National Press Club in Canberra on Wednesday, citing Treasury data showing that having children reduces the earnings of Australian women by an average of 55% over the first five years of parenthood.
Women taking time out of the workplace to raise children experience reduced workforce participation and slower career progression. Women often retire with significantly less in superannuation savings than men.
Dent said families need two incomes to stay afloat in the current economy and even with both parents working, they have less breathing room in their household budget.
“For many families it feels like a cruel game of whack-a-mole,” Dent said.
“For parents of young children seeking to raise and provide for their family one obstacle towers over the others: early childhood education and care.
“Too many face an impossible bind. They cannot access it, they cannot afford it, or they cannot trust what is available. This isn’t perceived: the options families have are largely determined by what the market has delivered.”
Dent will call for a policy pathway from government for the provision of 52 weeks of paid parental leave, up from 26 weeks currently paid for by taxpayers, and meaningful parental leave for fathers and partners.
She will push Labor to deliver on its policy aspiration of a universal childcare system, with well paid workers and fee controls and a new national commission established.
The speech comes after Monday’s intergenerational report showed that, for the first time, more Australians will be dying than being born in 40 years’ time.
Australia’s fertility rate is projected to decline to 1.34 by 2065–66, down from 1.5 children per woman in 2030–31.
Fertility rates have been below the replacement rate of 2.1 children per woman for 50 years, contributing to a projected drop in population of 1.7 million people and an increase in the projected median age by 1.7 years in 2065–66.
The report found a complex mix of economic, social and cultural factors was to blame, including greater access to contraception, more time spent in education, career development, longer periods living with parents, and delays in forming partnerships and having children.
The treasurer, Jim Chalmers, told Guardian Australia’s weekly Australian Politics podcast on Tuesday that the government remained committed to moving to a universal childcare system in Australia.
Anthony Albanese wants the reform to be part of his political legacy, and the government has commissioned consulting firm Deloitte to help design a universal system.
Its report on the policy “pathway” is due in time for the next election.
“It is still our ambition,” Chalmers said. “You don’t go from zero to 100. We’ve always seen it as a series of steps.”
He pointed to the government’s three-day childcare funding guarantee and the $1bn program to build childcare centres in areas with poor access as significant steps.
“It remains the government’s aspiration to get as close to universal as we can,” Chalmers said.
