Australia is grappling with a significant demographic challenge as its birth rate has fallen to a record low, prompting warnings from experts about future economic impacts. Professor Roger Wilkins, a demographic expert and deputy director of the Melbourne Institute, stated that the nation's fertility rate is now 1.48 births per woman, a level insufficient to replace the population without immigration. This decline presents considerable economic hurdles, including rising housing costs, cost-of-living pressures, and shifts in social attitudes towards family formation.
Professor Wilkins emphasized that Australia's long-term economic interests lie in sustaining a robust immigration program, suggesting that drastic cuts to migration would be detrimental. "It's going to be very hard to turn around," he told Bloomberg, adding that policy can influence birth rates to some extent.
He suggested that measures like the former "baby bonus" scheme, which provided cash payments to new parents, could be more effective than childcare subsidies in encouraging births. This policy, implemented in the early 2000s and later replaced by the Paid Parental Leave scheme, coincided with a temporary rise in fertility rates. The baby bonus offered up to approximately $7,000 per child and was seen as simpler for prospective parents to incorporate into family planning decisions.
These concerns come as Prime Minister Anthony Albanese faces pressure to curb immigration. Pauline Hanson, leader of the One Nation party, has made reduced immigration a central theme of her campaign, attributing many of Australia's issues to what she terms "mass migration." However, Albanese has defended his government's migration policy, stating that it is "working" and moving towards a target of 225,000 immigrants over the coming years, a significant reduction from the current levels. Data from the Australian Bureau of Statistics (ABS) shows that net overseas migration fell to 301,000 in the year to December 31, 2025, though it remains above the government's long-term objective. The total population grew by 412,500 in the same period, with net overseas migration accounting for nearly three-quarters of that increase.
Professor Wilkins cautioned that migration alone cannot mitigate the effects of a rapidly aging population. He anticipates that labor shortages will intensify as the proportion of Australians in their prime working years diminishes, potentially hindering the nation's ability to maintain living standards and economic growth. "We will see a decline in the share of the population that is in those prime working ages and ultimately that's where economic output and economic growth comes from," he stated.
Futurist Rocky Scopelliti highlighted Japan's experience as a potential preview of Australia's demographic pressures if low fertility becomes entrenched. Japan has increasingly turned to robotics and artificial intelligence to address workforce shortages, particularly in healthcare and aged care. Scopelliti noted that while Australia can learn from Japan's approach to technological solutions for an aging population, direct replication may not be suitable. "Australia cannot solve an ageing population through migration alone, and it cannot solve it through robots alone," he told the Daily Mail.