News reports today that the baby bonus is only going to come in installments for teenage (< 18 years) mothers.
The decision follows claims that mothers under 18 have been using the $4000 bonus to buy items such as plasma television sets instead of spending it on their children.
From January next year, teenage mothers will be prohibited from claiming a lump sum. Instead, it will be doled out in 13 instalments over six months.
The Government believes adult mothers mostly deal with the lump sum responsibly, but younger mothers are more financially vulnerable.
Family and Community Services Minister Mal Brough told The Sunday Telegraph: “The intent of the policy is to help families with the immediate costs of having children.
Well, there are so many things wrong here, it is hard to know where to start. First, everyone knows the policy has nothing to do with children but to do with the votes of families with young child. To even pretend otherwise is laughable. Second, what did you think was going to happen? It is a lump sum payment for goodness sake and people spend that on whatever they want. And not just teenagers. If I can point to a single purchase we made after getting the baby bonus that I can attribute to it, it was a plasma screen television; just in time for the 2004 Olympics.
And it is likely that we were hardly alone in that. This graph is from Google Trends. It shows google searches in Australia for “baby bonus” and “plasma tv.” Note that the baby bonus one spikes around May 11 (when it was announced in the budget) and then in the last week of June (just before it came in). That latter one also had a spike in plasma tv searches.
Of course, there are many reasons to think this is coincidental. However, my point is that spending on things other than stuff for babies is a common practice. Indeed, how many teenagers with babies are really hauling big screen televisions in their houses?
Finally, how will installments make a difference in an age of credit cards?
All this amounts to is age discriminatory pandering. For shame, given that the real irresponsibility is the fiscal and governmental irresponsibility of having a baby bonus in the first place.
Core Economics 
Truly cynical policy designed to appeal to rank prejudice, mitigated by the fact that there are so few teenage mothers anyway.
Brough must know that the stereotype of the teenage girl deliberately falling pregnant to get a pension and a house is, on the evidence and numbers, a vanishingly rare phenomenon, despite what talkback shock jocks would have you think.
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So, when is your paper on this with Andrew Leigh coming out? A week or so??? Should be able to look at household spending data on spending on plasma TVs pre and post baby bonus by teenage headed households with kids vs no kids, and non-teenage headed households with kids and no kids. Triple differences, whoo hoo. Could check whether it’s announcement effects or after receiving the cheque, too.
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“Baby Bonus” “Private Health” a slight delay but same graph.
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i think installments is a great plan however under 18’s really should be excluded full stop because its irresponsible of them having children when they are legally not licenced to drive ect,the town i live in has a very large number of drug abuse ect, and i fear this bonus attracts those abusers in particular to support their habbit, then in doing so are left to raise a child in that enviroment, which is highly likely to be raising a whole new generation of drug abusers and bludgers,
crime rates will rise and what sort of future are we looking at then????
maybey the baby bonus should be stopped alltogether,
i am expecting my 3rd child in june
and would be quite fine without the bonus
and i am far from financially secure im thinking of the future, it is scary enough to walk the streets now, just imagine how much worse it will be in another 20 years time…..
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