Budget 2024: Jim Chalmers declares he wants couples to have more children during a cost of living crisis - but here's the one thing he won't do

Treasurer Jim Chalmers has declared he wants Australian couples to have more kids - even during a cost of living crisis.

With Australia having a low fertility rate, the father-of-three said bigger families needed to be encouraged.

'We want to make it easier for people to have bigger families if they want to and that's why we're making these enormous investments in early childhood education,' he said on Friday.

But Dr Chalmers ruled out reviving the old baby bonus, which a decade ago gave $5,000 to a new mum having a child - or more than $8,000 in today's money.

'We've found a better way to support people who make that choice,' he said.

'I know that some people can't afford to have more kids, I know that people will make their own choices and I don't pretend for a moment that government should direct those choices.'

Dr Chalmers has hinted that instead of the baby bonus, his third Budget would look at making paid parental leave more generous, noting the work of Finance Minister Katy Gallagher and Social Services Minister Amanda Rishworth.

'It's why Katy and I work so closely together to make sure, with Amanda Rishworth, that we could expand paid parental leave and pay the superannuation guarantee,' he said.

Former Liberal treasurer Peter Costello introduced a $3,000 lump sum baby bonus in July 2004, famously declaring parents should 'have one for Mum, one for Dad, and one for the country'.

But his Labor successor Wayne Swan axed the baby bonus in his last Budget in May 2013, by which time it was $5,000.

Dr Chalmers at the time was Mr Swan's chief of staff who two months earlier had married Laura Anderson, a former ministerial media adviser to Penny Wong.

The Treasurer said Australia would benefit from 'healthy birth rates' and the government's goal was to make it easier to have families if they wanted too.

The old baby bonus had caused Australia's fertility rate to increase from 1.73 in 2001 to 1.88 by 2011.

But by 2021, it had fallen back to 1.7, after hitting a record-low of 1.59 during the pandemic in 2020. 

Treasury's Intergenerational Report forecast fertility falling back to 1.62 by 2032/33, down from 1.66 in 2022/23.

This would see Australia became even more reliant on immigration as the population aged, so the government would have more working-age people to tax. 

Personal income taxes made up 45 per cent of the commonwealth's $618.2billion in revenue during the last financial year. 

Paid parental leave debuted in January 2011 and now sees the federal government pay 20 weeks' leave - rising to 26 weeks from 2026.