Shadow treasurer Tim Wilson, former Liberal minister Philip Ruddock reject calls to revive baby bonus

Past and present Liberal frontbenchers are resisting conservative calls within their party to revive the baby bonus despite Treasury expecting fertility levels to plunge to a new record low during the next four decades as deaths outpace births.

With the Coalition calling for immigration cuts to counter the popularity of One Nation, a former Howard government minister has defended Australia’s existing immigration intake and says Australia will need skilled migrants during the next 40 years to slow down ageing of the population.

Shadow treasurer Tim Wilson on Tuesday led the charge against the idea of giving lump sum payments to new mothers to encourage couples to have more children a day after a senior colleague Andrew Hastie, from the conservative side of the party, declared he was “pretty open-minded” about the idea.

“We always, of course, encourage people to form families and have children but whether or not just having a baby bonus, which is where that question is alluding, will actually solve the problem, I remain skeptical,” Mr Wilson told ABC Radio National.

“The reality is with cost of housing continuing to rise, there’s a direct correlation between that and of course family formation and part of the challenge is the Government and the Labor Party continues to prioritise superannuation over home ownership which means people are buying later.”

Treasurer Jim Chalmers, who was a senior Labor staffer when his side of politics passed laws to axe the baby bonus in 2013, stressed the Federal Government had no plans to revive it.

“I don’t like to tell families what decisions to make about when to start a family; whether to start a family; how many kids to have,” Dr Chalmers told Nine’s Today show on Tuesday morning.

Philip Ruddock, who was a senior Cabinet minister when John Howard’s government introduced a $3000 baby bonus in 2004, said he had doubts about the program more than two decades ago.

“You can’t as a Cabinet minister walk away from it and I don’t walk away from the decisions that were made,” he told The Nightly.

“I don’t think people are terribly influenced by those matters.

“I think having a family and children really reflects on people’s aspirations for their own family.”

The former Liberal immigration minister, who has written a new book titled Nation Building. How Immigration Made Australia, is expecting skilled migration to delay the inevitable ageing of Australia’s population in coming decades.

“The program needs to be delivering people who are going to pay taxes, build the economy and growth, and a skilled program does that,” he said.

“I simply say we are younger and we are more skilled and we’re going to be more prosperous.

“We will certainly age, but we are not ageing at the same rate that others are.”

Mr Ruddock also defended the existing net overseas migration intake close to 300,000, despite the popularity of One Nation and Opposition Leader Angus Taylor’s suggestion it should be trimmed to 170,000 to matching housing supply.

“Look, I don’t think it’s necessarily high. I think it’s a question of the right mix,” he said.

Reserve Bank Governor Michele Bullock suggested more skilled workers from overseas would be needed in coming decades to pay the taxes to fund higher healthcare costs.

“We’ve still got the demographic challenges, which is all about supply in the labour market, it’s all about how do we finance as the population grows older,” she told a Committee for Economic Development of Australia lunch on Tuesday.

“How do we sort of finance the retirements of this large cohort with a smaller cohort of workers?”

Treasury’s Intergenerational Report, released on Monday, forecast the number of people aged 85 or older trebling by mid-2066 as the proportion over 65 grew by 87.1 per cent.

By the 2060s, it predicted deaths would outpace births as fertility levels hit a new record low of 1.34, well below the replacement level of “two” even with a consistent net overseas migration rate of 235,000.

One Nation doesn’t have a baby bonus policy, instead preferring income splitting to reduce the tax burden for couples where there is only one bread-winner.