Australia's child costs hit $17,800 a year, pushing would-be parents to have fewer kids

For many families in Australia, the rising cost of having children is becoming a reason to reconsider how many kids they can realistically afford to have at all.

Australians' plans for family life are being squeezed by a widening gap between household income growth and the rising cost of childcare and other family essentials.

Here's what to know

The Age reported on new figures from national advocacy group The Parenthood that put the annual cost of raising one child in Australia at about $17,800, and more than $36,500 for raising two children.

According to Georgie Dent, The Parenthood's chief executive and a mother of three, affordability is now a major driver of Australia's falling birth rate, alongside any change in what people say they want for family size.

"The birth rate has plummeted and a significant part of that drop is not in desire, it's in affordability," Dent said, per The Age. "Parents are genuinely beside themselves; so many families are very genuinely squeezed."

Australia's fertility rate had already fallen from 2.02 in 2008 to 1.48 in 2024, and the intergenerational report projects it will decline further to 1.34 by 2065-66. 

A rate of 2.1 is generally needed for a population to replace itself without migration.

Analysis from ConnellGriffin found that the cost of running a family has risen faster than household incomes.

"What it actually takes to run a family has risen 134%, but the money that lands in the bank each week has risen only 102% [in the last two decades]," Dent said.

More background

The number of children Australians say they want remains higher than the number they are ultimately having: men report wanting two on average, and women 2.1.

Treasury's Centre for Population estimated that a further 881,000 births might have occurred from 2001 to 2022 if intended family sizes had been achieved, according to The Age.

Dent argued that, with one-third of Australia's current workforce having dependent children, the issue also affects families trying to balance paid work with caregiving responsibilities.

The burden can be even heavier outside major cities. Research commissioned by The Parenthood found that 86% of parents in regional, rural, and remote areas are experiencing financial stress tied to childcare access.

Even households that might seem financially secure are feeling the pressure. Francesca Steele, a KPMG associate director focused on human rights and social impact, said that the cost-of-living increase "feels exponential," The Age reported, even as her family has scaled back holidays and children's extracurricular activities.

What's being done?

To make parenthood less financially daunting, Dent is pushing for wider policy changes, including lifting minimum paid parental leave to the OECD's one-year average and delivering "genuinely universal" childcare that is affordable, accessible, and backed by a professionally paid workforce.

She has also been advocating for a national Early Childhood Education and Care Commission to oversee the delivery of quality universal childcare.

"In 2020, only 12.5% of centre-based [childcare] services had average fees above the fee cap," Dent said. "Today, it is about 43%."

In her view, systemic change is required. "Remove the childcare subsidy and fund it like schools," she said. "These changes would enable people to afford the number of children they could really like."

The cost of care can shape careers, family size, and even a household's ability to support aging relatives at the same time.

"We don't go out to eat or get takeaway food, we're not spending money on extravagant things like clothes; we live a pretty simple life," Steele said. "I have no idea how other people are surviving."

Where can I learn more?

For more on the pressures shaping family life, these stories look at rising living costs and insecurity.

• The Australia Institute says housing and living costs are rising with climate change.

• Oxfam says billionaire wealth surged as millions remained in poverty.

• In North Carolina, one family's free-range parenting lifestyle shows how child-rearing reshapes daily life.

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