Baby bust: Victoria’s birth rate hovers near its lowest in history

Victoria could be in for a rough time, demographically speaking.

According to the federal budget, this financial year the state’s population will grow by a mere 30,000 people.

Victoria’s birth rate plunged during the pandemic.Credit:Louise Kennerley

That’s pretty meek when you consider Victoria’s population shrank by almost 45,000 last financial year – partly because a net 18,300 people fled to other jurisdictions, and partly because thousands of foreigners returned to their home countries.

If the boffins at Federal Treasury’s Centre for Population are right, the exodus to other states will continue for a while yet. Treasury is predicting Victoria will lose a further 17,300 people to other states by June this year, followed by 5000 by the end of June 2023.

Even with this looming interstate exodus, Victoria’s population levels are expected to recover to pre-pandemic levels fairly quickly. That’s partly based on the optimistic assumption that Victorians will return to having babies at pre-pandemic rates.

Former treasurer Peter Costello famously urged families in 2002 to “have one for mum, one for dad and one for the country”. Two decades on, and such a birthrate seems almost unimaginable in Victoria.

A little discussed symptom of the pandemic was that in Victoria the number of births fell sharply, exacerbating a longer-term decline in the fertility rate. The reasons for this are complex. But according to the Australian Bureau of Statistics, in 2020, Victoria’s fertility rate fell to just 1.43 babies per woman. Not only was it a record low for the state, it was the lowest rate in the nation.

The birth rate has picked up a bit since then, but not by enough. The state government went so far as to claim mid-last year that Victoria was in the middle of a baby boom. But it was nothing of the sort. Data published by Births, Deaths and Marriages Victoria shows the number of births increased by 2.4 per cent in 2021, only partially reversing the 4.9 per cent drop that happened in 2020.

And there is evidence that birth rate has again flagged. The number of babies registered during the first three months of 2022 fell by about 1 per cent compared to the first three months of 2021, and by 13.4 per cent compared to first three months of 2020.

Federal Treasury is predicting the fertility rate will bounce back to 1.66 and stay there for the next couple of years. But the way things are going, whether that transpires is looking doubtful.

When you add it all up, and throw in the idea that the state’s population is ageing, Victoria could be a demographic ticking time bomb, without enough workers to keep the place afloat in coming decades.

Skills shortages are already particularly acute in the health sector, with Victoria now struggling to compete internationally for nurses, doctors and other health professionals against a backdrop of global shortages.

According to the Australian Bureau of Statistics, there were 101,800 job vacancies in Victoria in February. That’s more than double the 42,100 positions available two years earlier, in February 2020, just before the pandemic really started to bite.

Premier Daniel Andrews, at a press conference in Ballarat on Tuesday, was only too happy to oblige when asked he if he knew the state’s unemployment rate.

“In regional Victoria it is 3 per cent,” he said. “It’s 4.2 per cent across the state, just a little bit above the overall [national] number.”

Andrews says he doesn’t like to talk about full employment. But if that isn’t full employment , it is certainly close.

Low unemployment is a good problem to have. Among other things, after years of anaemic wages growth, it means workers are finally likely to get some decent pay increases as employers fight to attract staff.

But it is also a sign Victoria needs to pay more attention to the demographic challenges it now faces.

Federally, Prime Minister Scott Morrison is promising 1.3 million new jobs in five years. Morrison reckons he can do this without lifting the permanent migration cap, which for next financial year is set at 160,000 new permanent migrations, including 109,900 people through the skilled migration stream.

For Morrison and Andrews, all of this is happy timing. Both men will be spruiking low unemployment when they face voters. But beyond the May 21 federal election and the November 26 state election, these challenges will not disappear.

At some point, as a nation, and as a state, we will need to have a serious conversation that goes beyond dealing with our demographic challenges by simply piling more people in through the migration program.

That will mean making it easier for younger families to have children by boosting access to childcare. And it will mean making it easier for people to get into the housing market, rather than facing a binary choice between children or property.

These are hard problems to solve. Whether they can be tackled in the current political climate is a different question entirely.

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