How babies hit family budgets

Expect your health bills to rise sharply as the size of your family increases.

However a new study shows that the cost of your groceries often does not rise as much as  most people would expect, with a bigger family.

These ground-breaking, but highly technical research, is published in the Australian Social Policy Journal No. 9.

It sinks a few shibboleths.  These include the common belief that many new mothers spend their baby bonuses on wide screen television sets.

In fact, it reports that spending on electronic goods usually falls after the birth of a first child, although it does rise again after a third child arrives.

Oddly, perhaps, the report also shows that spending on meals out and take-away foods usually falls after the birth of a first child, but rises strongly after the arrival of second or third children.

The researchers say that time pressures probably have a lot to do with the later developments there.

Housing costs, too, may ease after the birth of a first child, but they rise strongly after the arrival of second and subsequent children.

Spending on holidays  falls sharply after the arrival of a first child, probably because the demands of the new arrival make scheduling a holiday almost impossible.

However, the necessity of taking a – possibly expensive – break certainly reasserts itself with the arrival of second and third children.

While the research has nothing to say about the old, probably wrong, belief that two can live as cheaply as one, it certainly destroys any thought of three, four or even five doing so.

The Federal Minister for Families, Housing, Community Services and Indigenous Affairs, Jenny Macklin, put that bluntly in a statement she called “New research highlights the increased cost of newborns.”

“This research confirms that while babies bring great joy and excitement to families, they also put new pressures on family budgets at a time when many families drop from two incomes to one,” Ms Macklin said.

She noted, too, that from the start of next year,  families will have access to Australia’s first national paid parental leave scheme, which will pay new mothers the minimum wage of $570 a week for up to 18 weeks.

In fact, paid parental leave will become an issue at the next Federal election, as the Opposition Leader, Tony Abbott, is offering an even more generous paid maternity leave scheme, funded by an increase in company taxes.