The Changing Nature of Families in Australia

On 12 May 2025, Cherelle Murphy provided a keynote address at the launch of National Families Week 2025.

I want to start with a confession. Sometimes I text my kids to tell them dinner is ready.

Too often I let them sit crossed legged on the couch for a TV dinner. It’s no wonder I received a couple of pretty special Mother’s Day cards yesterday.

My sometimes-lazy parenting comes from knowing that arguing about the dining table settings is too much effort for a single working mum at the end of a workday. I suspect my indifference toward mid-week properly-set dinners are not uncommon amongst the other 846,000 tired single mums in Australia.

But my wonderful, late, mother would be horrified.

My mother would never have allowed it. Dinner was at 6pm sharp, and by 5:50pm, the table had to be set by us kids, no reminders needed.

She knew every detail about my life, from my friends’ pets’ names to my homework deadlines. Compared to her, I’m lucky to score 50 per cent on that test with my kids – and their dad, perhaps 10 per cent.

Like yours, I’m sure, my family looks very different in 2025 to what it looked like in 1985. For those born in 1985 anyway!

Some of these changes have made us happier, healthier or wealthier, but certainly not all of them.

Sure, our homes and incomes are almost twice as large as they were decades ago. Yet, with this growth comes a heavier financial load. Household debt has ballooned, becoming an inevitable part of the modern family's story. It's a reminder that progress often comes with its own set of challenges.

There are many differences in family make-ups over the last 40 years.

Working mums spend six more hours on the job weekly, and dads have tripled their time with newborns.

Babies’ life expectancy has soared from 76 to 84 per cent, and stillbirth rates have dropped by 57 per cent.

Health scores for Australian kids beat the OECD average in 13 categories, though education rankings have slipped.

Despite higher average incomes, the gap between the top and bottom fifth of income earners has doubled.

Over the last 20 years, newer data tells us divorce rates are down from 3.2 per thousand people in (2006) to 2.3 in 2023 (2.7 per cent 2021).

Same-sex parents now make up 0.5 per cent of households, up from 0.1 per cent in 2006.

For all of us in this room, and I assume we all are here because we are interested in improving the wellbeing of Australian families, the key questions from these interesting facts is which of these changes are related? How do we address the biggest challenges facing Australian families? And how do we bring those in the bottom 20 per cent of real incomes closer to those in the top 20 per cent?

It’s important to ask where the changes are just coincident, and where are they causal.

Why do some changes lead to a more beneficial outcome for families, while others are unpredictable and unable to be guided?

Now as a mere economist, I can’t answer all these questions.

But I do know that if we can at least study and understand the past, then we have a much better chance of improving the future. With new tools from technological advances, we can do that more quickly and effectively.

And with an emboldened second term Labor government, with a clear ambition to improve social outcomes, we can perhaps benefit from political momentum too.

So, what helps families economically? Well, jobs matter – a lot!

The higher parents’ labour income, the more likely families are to be pulled out of economic difficulty.^1,2

Healthy incomes enable people to access vital services such as childcare, education and healthcare, all critical to family wellbeing.

On the jobs measure, Australia is doing very well. The unemployment rate at 4.1 per cent in March was low and it has been fairly steady for around three years. Australia has in fact done better than many other countries on this measure. The proportion of the population in a job has never been higher at 64 per cent.

We have largely got the Reserve Bank to thank for that. The central bank took interest rates to a level that got inflation down but didn’t kill the economy.

Governments, state and federal, also contributed by injecting extraordinary stimulus into the economy during the pandemic which lifted economic growth and resulted in new employment. The employment market has been extremely stable since.

The public sector itself created a lot of jobs. As of June 2024, public administration employment was 2.5 million, up 3.6 per cent on a year earlier, and at a new record.

That’s not to say everyone who is in a job is deliriously happy with their working arrangements. There is a record high proportion of employed people with more than one job. As of December 2024, 7.6 per cent of employed women and 6.0 per cent of employed men were in multiple jobs. The largest concentration of multiple job holders is women in the health care and social assistance sector.

Some, such as the parents of young children may not want to be in the paid workforce as many hours as they are!

It could be forced upon them by the high cost of living, the level of household debt that I mentioned before or a lack of flexibility in hours with certain career options. I remember being told by one boss when my twins were babies and still breast feeding that it was pretty hard for an economist to work part-time hours.

Regardless, the number of jobs in the economy doesn’t tell the whole story.

Other, much less positive trends, such as limited wages growth along with rising prices, rising tax collections and rising interest rates have hurt disposable incomes.

When we look at disposable incomes as share of GDP, the current level is well below where it was as a share of GDP in the decade between the GFC in 2009 and the pandemic in 2020.

Now, even though inflation has come back down to be within the Reserve Bank’s target band of 2-3 per cent, the very high inflation we suffered in 2021-24 hasn’t been erased. Low inflation means prices aren’t rising at 7 per cent – but they are still rising.

I don’t need to tell anyone in this room that since 2019, the cost of many essentials has risen beyond wages growth for many families.

Food prices are 24 per cent higher than in 2019. It was heartbreaking to read in the latest Foodbank Hunger Report that 2 million Australian households (19 per cent) experienced severe food insecurity in the 12 months before its October 2024 publication. Nearly one in five.

The cost of other essentials has also risen very quickly.

Insurance prices are 47 per cent higher for example, fuel prices are 23 per cent higher and rents are 19 per cent higher than at the end of 2019.

That brings me to the topic of affordable housing: another hugely significant challenge for many families. Housing is not merely a place to live; it serves as the cornerstone for building strong, healthy, and thriving communities. The significance of affordable housing in promoting social well-being is immense.

But of course, housing has become increasingly unaffordable. While renting is hard enough, the cost of buying a home has simply cut many families out of the market.

Programs like the Housing Australia Future Fund and the National Housing Accord aim to increase the availability of affordable and social housing by contributing to the construction of additional homes and encouraging private sector investment. These initiatives are essential for providing safe and secure housing for low-income families, which in turn helps to enhance their quality of life, stability, and opportunities for growth.

Given our housing affordability problems are well entrenched by decades of inadequate and sometimes detrimental policy, these will unfortunately not be quick fixes.

So far, I have spoken mainly about macroeconomic trends. These are the big forces that are ruling our incomes and prices and employment. But micro policy matters too, as does actions by business and how they treat their employees and customers.

This is where policy ambitions are quite targeted, yet very powerful for many families. I’d put everything from access to pre-school education to corporate debt forgiveness in this category.

The expansion of childcare services and pre-school education are critical.

These are also pet projects of the Prime Minister.

When asked during the election campaign in one of the leaders’ debates what he wants to be most remembered for, Anthony Albanese said “establishing affordable childcare that is as natural for families as school education.”³

New data just released on Friday revealed that over 287,000 children attended pre-school in 2024. 6.7 per cent of those were Aboriginal and Torres Strait Islander children and 18.3 per cent were children living in the most disadvantaged areas.

The benefits of pre-school education for parents are easy to understand, but there are also benefits for the children and therefore the future economy too.

Modelling by Impact Economics⁴ estimated that the average benefits for children with two years of pre-school can be valued at $102,700 over their lifetimes due to their increased educational attainment and the higher probability that they complete school.

I’d also put the ability of parents to work from home in a similar category: it not only helps the individual and the family, but also the economy.

But it is a little more contentious. We saw this in the election campaign. I also get the sense from many of the business people I speak to, that while they think working from home is good for employees, it is less positive for business.

Indeed, it is good for employees and families. CEDA economists Danika Adams and James Brooks have put some numbers on this. They showed that Australians who work from home since the pandemic have cut their commutes by around three hours a week. In dollar terms that is worth an estimated $5,308 a year based on average wages. That doesn’t even include the saving from transport fares or fuel. It means extra time workers may be able to devote to playing with their kids, exercising or getting the chores done at home.

But the CEDA research shows two major advantages for employers too.

First, employees are available to work longer hours (and let’s face it not all those extra hours worked are compensated). Secondly, working from home also increases labour supply in the economy. That means employers get access to the talent of workers that was previously left untapped due to barriers to on-site work. Those that might fall into that category include those caring for children (especially aged under four) and those with impactful health conditions.

Even though I am now a mum to 15-year-old teens who don’t need constant supervision – I am a beneficiary of working from home over the past 5 years. I think that had working from home been available to me in the first 10 years of my children’s lives, when I worked part-time – I would have been able to work more days per week than I did.

Working from home and pre-school education stand up economically on their own.

But other polices for families don’t.

Our social safety net means subsidising those that need a bit of a hand. Many expenditures across the states and Commonwealth government don’t generate an economic return.

And that’s ok!

But here’s where we run into some harder decision making. Economics tells us we have unlimited wants but limited resources. That means governments can’t implement all the policy options that seem like good ideas.

This is an area where my opinion is only one of many.

Frankly I would rather the people in this room make those decisions.

But I do want to offer an economic thought bubble as you discuss and debate where the focus should be for families going forward.

We can have a more comprehensive social safety net if our economy operates well with stable GDP growth and low inflation. If our economy is working well, governments collect more tax and that tax revenue can be used to buy better medical equipment in hospitals, pay childcare workers higher wages and also contribute to social housing. It also usually means fewer people need government help.

In other words, if we can grow the size of the economy pie, then there will be more to share around and fewer people in dire straits.

The best way to do this is to boost our productivity, something we have not been very good at lately – especially compared to the US.

The term productivity has been used at lot in the last week in the mainstream media after the Treasurer said on the Insiders Program on the Sunday following the election that productivity (not forgetting about inflation) would be the focus of a second term Labor government.

To many, it means longer hours at work while the boss takes home the extra profit. My dad was a fitter. At the end of a day in a dirty workshop, I know he couldn’t have worked harder, and he certainly didn’t believe that if he had, his pay cheque would have been bigger. He, like so many others associate productivity with industrial relations changes. Particularly WorkChoices.

But better productivity is actually about finding better ways of doing things, not working harder.

So how do we find this magic productivity?

Reforms that can boost our productivity can take many shapes and be consistent with government support services, work from home rights, switching off after hours and a fair go. One example which the Treasurer pushed forward just on Friday with the Productivity Commission, was national standards for occupational licensing. This would mean people in affected trades could work seamlessly across state and territory borders without reapplying for a separate licence or paying additional fees. According to Treasury it could be worth $10 billion to the economy.

Businesses are also doing their bit for productivity by deploying cheap and ready to use AI tools to do things better.

Government is too but the data suggests that non-market labour productivity (which encompasses the education, health and public sectors) is very different to the private sector.

It has fallen since the pandemic (by 5.7 per cent in fact since December 2019, compared to productivity growth of 6.8 per cent in the private sector (excluding the volatile mining industry)). These numbers are pandemic affected, but they may also be partly because they don’t use technology as well as the private sector.

I’d also add that using technology better and employing AI, does not mean people lose their jobs. It means the boring and mundane tasks get done by machines, leaving humans to do the more interesting and important work, including frontline services for government services beneficiaries.

So, there is lots of good that we can do, and new technology to help us do it.

If we don’t use technology to help us improve productivity then we are destined for a poorer future. We will go backwards because fiscal positions across almost all the states and the Commonwealth are weak. Deficits are expected over coming years and improvement is needed or else more debt will be required and that means higher interest payments on future governments. There is no ability to put in place safety nets in that scenario.

At the beginning of my remarks today I said that we should pay attention to the past, as it’s the best guide to how to improve the future.

Too often we simply don’t do that.

I want to borrow a quote from Warren Buffet – a famous US investor – who salubriously retired last week amid a flurry of accolades. He once said: “What we learn from history is that people don't learn from history”.

Over the coming days there will be a lot to learn. There will be several specialists with lessons from their own research and occupational experience. Soak it up, write it down and get co-pilot or your favourite AI tool to summarise it for you. Productivity matters!

And share your lessons from history. Many of you have long memories and extensive experience meaning you can pass on your knowledge to your juniors, policy makers and politicians.

I am so humbled to be asked to speak to this group. You all do such important work. The type of work that can make significant differences to thousands of people’s lives.

And I know many of you are parents or caregivers with a dinner to be made and laundry to be folded. So, thank you for your precious time today.

Have a wonderful week and may you succeed in shaping the best possible future for Australia's families.