TDA EXCLUSIVE
Coalition Senator Matt Canavan has proposed a policy to offer couples a low-interest loan of $100,000 once they have a child. This loan would only apply to families buying their first home and would be wiped if they have three children.
Senator Canavan told TDA this would help reverse Australia’s declining birth rate and increase home ownership for younger people.
While Canavan has put forward the idea, the Coalition hasn't formally adopted this policy.
Labor has called the plan “a 1950s” idea.
Canavan
Matt Canavan has been a Queensland Senator since 2013. In the Senate, Canavan is part of the National Party, which is led by David Littleproud.
Federally, the National Party has a formal alliance with the Liberal Party – led by Peter Dutton – to form government together if they win enough seats at an election. This is called the Coalition.
Under the former Turnbull Government, Canavan served as Resources Minister. He does not currently hold any Shadow Ministry position.
The proposal
In an interview with TDA, Canavan proposed a new policy to give first-time parents a $100,000 government loan. This would only apply to families buying their first home.
The loan would decrease by 30% after a second child, and would be wiped altogether after a third child.
He said it would apply to any de facto couple, including same-sex couples, and could involve adoption and surrogacy.
If a couple were to have one child, but then couldn’t have more due to unexpected complications, Canavan said their debt would not be wiped.
“It’s unfortunate in those situations, but you still get the low interest loan; you’re still better off than you were before,” he said.
Canavan said he raised the prospect in the Nationals’ party room and it has the support of “some” MPs and Senators.
Canavan admitted the issue wouldn’t be “high on the agenda” at the upcoming Federal Election, due by 17 May, but said he would advocate for the policy if the Coalition were to win government.
He added that he had the policy costed by the parliamentary budget office, which runs a cost analysis on policy ideas.
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Canavan said he has based this policy over a similar scheme in Hungary.
Hungary
In 2019, the Hungarian Government introduced a four-phase loan scheme to encourage more women to have children.
The policy involved women receiving a 10 million Ft ($AU43,000) low-interest loan once they got married. Once they had a child, they didn’t need to pay off the loan for three years. After a second child, one-third of the loan was wiped. After a third child, the loan was completely wiped.
The scheme was only available to married women under 40. The birth rate in Hungary has been rising since the 2010s.
Australia
Australia’s birth rate has been falling for decades. In 2008, the birth rate was 2.02 children per woman. In 2023, it was 1.5 children per woman.
Lower birth rates, combined with an ageing population, can lead to public policy challenges – such as smaller workforces and pressure on younger generations to care for older people.
A 2,000-person survey last year by the polling company Redbridge showed 18 to 34-year-olds are delaying having children due to cost of living pressures.
Many politicians have commented on the country’s declining birth rate in the past.
In 2004, former Liberal Treasurer Peter Costello famously urged families to have “one for mum, one for dad, and one for the country”. This came as he introduced a program to give parents $3,000 for each new child born.
Ahead of last year’s budget, Labor Treasurer Jim Chalmers told Nine Newspapers that “it would be better if birth rates were higher”. He added: “There are a whole range of reasons people’s preferences are changing. It’s expensive to raise kids.”
Response
Labor’s Minister for Women Katy Gallagher told TDA: “I’m not entirely surprised that [Canavan] is linking financial incentives to a woman’s reproduction of children.”
Gallagher said the key to reversing declining birth rates is to “support people and their choices”.
“ I don’t think imposing these kind of 1950s views about the role of women and their reproductive capacity is the right way to go.”
She also questioned how the government would provide the loan and enforce it.
