NSW minister Dominic Perrottet tells Centre for Independent Studies there’s no incentive to have children if ‘the state will take care of you in your old age’

The New South Wales finance minister has blamed the welfare system for declining birth rates and family breakdown, questioning why anyone would have children “when the state will take care of you in your old age”.

In a speech to the Centre for Independent Studies (CIS), Dominic Perrottet quoted the US politician Daniel Moynihan’s view that “marriage was penalised and single parenthood subsidised” by the welfare system.

He said people were deciding to have fewer children because the age pension was readily available to support them later in life.

“Some have argued that social security replaces the role of children in old age by socialising the traditional duties of the family,” he said on Tuesday night.

“I know [CIS executive director] Greg Lindsay has also written previously on the perverse incentives created by common pools of welfare, where everyone seeks to benefit at the expense of everyone else.

“As one commentator has asked, why have children at all when the state will take care of you in your old age?”

Perrottet said young people were increasingly losing trust in government and resenting paying for a system they might never benefit from.

He said Australia was failing to maintain the partnership that makes a society, between those living, those who are dead and those yet to be born.

“Just like Greece and other parts of Europe, we here in Australia are seeing the same troubling shift in social patterns – a collapse in marriage, a decline in the birth rate and a rapidly ageing population,” he said.

“But just like in parts of Europe, we’re seeing governments that have focused on building up the needs of older generations at the expense of those who are to come. Some in the UK have described what they call a ‘gerontocracy, where the smartest financial move you can make is to grow old … where you will be better off in retirement than you were working’.”

Perrottet did not directly call for cuts to welfare, but said current patterns of economic behaviour in the West were unsustainable.



“The unique mix of social, economic and demographic factors that exist today perhaps represent the ‘new normal’ – a sustained period of low growth in which only the economically fittest can thrive,” he said. Costly social programs based on naked ideology were a path to ruin.

“But these trends also give a new urgency to the debate around the federation. The current system of taxation and distribution simply rewards mediocrity and provides no incentives for the states to undertake challenging economic reform.”

The chief executive of the Australian Council of Social Service (Acoss), Cassandra Goldie, labelled Perrottet “plain wrong” in his analysis of the effects of the social system.

“He’s plainly wrong that the Australian social security system causes family breakdowns,” she told Guardian Australia. “There is clear evidence that quite to the contrary it contributes to supporting families, and what we do know is that some of the drivers of family breakdown are financial distress, people losing their jobs, and of course our social security system is a very important part of relieving that kind of pressure.”

Goldie said it was “extraordinary” to suggest Australia wanted to go back to an era where couples were forced to stay together because they faced poverty if they split. She said the “historically successful” architecture of the social security system must be protected.

“Australia is not heading down a Greek-style crisis in any shape or form in terms of our social security system, we have one of the most targeted social security systems in the OECD,” she said.