Australia: Treasurer rejects baby bonus as fertility and investment trends shift

Australian Treasurer Jim Chalmers has ruled out introducing a new baby bonus despite forecasts in the upcoming Intergenerational Report indicating fertility rates are expected to fall “further and faster” than previously anticipated. The report suggests Australia's population growth may slow to an average of 0.9 per cent annually over the next 40 years, compared to 1.4 per cent previously. Chalmers noted that the decline is largely driven by fewer people having three or more children, stating the government prefers to support families through early childhood education, expanded paid parental leave, and superannuation contributions on parental leave.

Separately, changes to property taxes regarding negative gearing and capital gains discounts are driving a shift in investment behavior. Voluntary contributions to major funds like AustralianSuper and MLC have seen significant spikes, as investors move capital from property into the $4.8 trillion superannuation sector. Economists suggest this influx of superannuation savings could benefit stock markets while potentially helping to reduce inflation by slowing broader economic activity.