Australia birth rate at 25-year high

CANBERRA (Reuters) - Australia's birth rate has hit a 25-year high, but government urgings to "have one for mum, one for dad, and one for the country", and cash payments for newborns have had little impact, a new study has found.

And further increases in the birth rate could worsen the problems of an ageing population, driving new mothers out of the workforce and reducing the tax base, the nation's productivity watchdog said.

"Much of the recent increase in the fertility rate is likely to reflect the fact that over the last few decades, younger women postponed childbearing and many are now having those postponed babies," Productivity Commission author Ralph Lattimore said.

Australia's 21 million population was boosted by 285,000 births in 2007, the highest level in 25 years, and up from 261,400 births in 2005.

The population is expected to hit 31.6 million by 2050, driven to a small extent by the higher birthrate and almost 10 million new immigrants.

The new peak in birthrate followed introduction by the former conservative government of a "baby bonus" payment in 2004, which this year reached A$5,000 for a newborn to help defray costs. The bonus costs A$1.3 billion per year.

But Lattimore and co-author Clinton Pobke said the birth spike stemmed from younger women who had deferred having children now having babies in their early to late 30s, rather than the government financial incentive.

The baby bonus, copied from overseas, was only partially responsible for lifting the fertility rate, they said.

Based on overseas experience, the government's policies were likely to have generated only 0.0000033 additional births for every tax dollar spent, or around 4,333 extra children, meaning they had come at a cost of around A$300,000 each.

Critics of the bonus have said it is wasteful, mostly reaching well-off or middle income families. Australians joke that it is mostly used to buy expensive flat-screen televisions.

"If it was put in place to get more children, then it's unbelievably expensive," influential economist Bob Gregory told the Australian newspaper in March in an article titled "stop paying the well-off to breed".

The Productivity Commission said Australia's fertility rate would be even higher except for rising house prices, mortgage and living costs turning couples off early parenting.

The report authors said the baby bonus represented only about 1 percent of the A$385,000 lifetime cost of raising a child to age 21 in Australia.

($1=A$1.09)

(Reporting by Rob Taylor, editing by Sanjeev Miglani)