I guess the irony would not be lost on anyone of 2000 jobs to be cut at Centrelink (the social security office). Images of people walking from behind the counter to stand in a queue in front of it come to mind. But in actuality, with a booming economy, it should be a positive sign if Centrelink’s activities are contracting.
But the broader issues is that the government faces big challenges in its attempt to reduce public service costs. In that respect, some policies enacted by the previous government stand out as sore thumbs. I speak, of course, of the baby bonus. That payment already costs around $1 billion per year and in July is set to add several hundred million more to the bill as it jumps to $5,000. And for what? At its best, the baby bonus was just a vote buying exercise and a failed one at that. At its worst, it is an attempt to increase the population; something that is misplaced because there is a cheaper alternative — immigration. (On this point, I note that the IPA’s Chris Berg is in agreement).
The Rudd government has, thusfar, been silent on the issue of the baby bonus. Prior to the election, they were set on keeping it but it never was a core promise for them. I must admit that I can’t for the life of me imagine a Labor government slashing public sector jobs while at the same time increasing the baby bonus. Leave aside the obvious disruption that is going to occur in maternity hospitals in the last week of June and first week of July, the increment to the baby bonus is unjustified. My hope is that it will be frozen in the May budget.
But in reality, we need to be rid of it. The review of changes to maternity and paternity leave will provide an obvious opportunity. Let’s hope the government takes advantage of it.
Core Economics 
Would cutting the baby bonus help control carbon emissions in a generation? One child per couple would allow a cut of at least 25% within a generation, and solve the housing crisis to boot.
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Surely, given your research on the introduction of the baby bonus (and the last government’s response), your suggestion to eradicate the bonus needs to be clearly accompanied by a warning that it either should be done retroactively (from the day the abolish is announced) or very very slowly.
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Now, now surely that wouldn’t be so silly …
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Phasing out at $10-20 a day seems like the best option. If there are any sudden steps on the way down, surely there is more potential for disaster on the way down than up as mums aim to give birth early.
People will complain that they’re missing out on something they got before, even if it is compensated for by the rest of the system. Like GST. But we’ll get over it before long.
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If you announce that effective immediately the bonus was cancelled, surely no effect (no time to get the c-section lined up)? Of course, if people think that the bonus will be cancelled some time soon, then Eric’s right, it could cause real problems. Any discussion by the govt of the possibility prior to an announcement is probably a bad idea, unless they go with Eric’s plan.
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I also agree that scrapping the legislated increase in the mean time would not be a bad thing.
For the longer term, it’s worth remembering that the Baby Bonus was originally introduced as a “simpler” alternative to some form of paid maternity leave. So I think that Joshua is right that the upcoming review of parental leave by the Productivity Commission provides an appropriate forum for reconsidering its usefulness.
Even if the Government didn’t want to make large expenditure savings, the amount of money currently committed to the BB would probably be enough to fund a back-up parental leave scheme targeted at lower-income Mums (and the occasional Dad).
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It sounds like people who support abolishing our baby bonus are unaware of the inordinate expense involved in bringing a healthy baby into this world! It’s incredibly expensive. And where women don’t hold full time jobs (only casual or part time, for instance), maternity leave provides absolutely no compensation for these costs. Do we want to form a heavily populated nation of immigrants instead? I don’t think so.
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I Sinecerely hope that the Rudd Goverment does abolish the baby bonus ASAP ..I have 4 neices all under 21.. 2 of which are having their 3rd babies this year and they make no quarms about the reason THE BABY BONUS!! I am in a possition of watching first hand what this bonus is doing to this uneducated group that think a few thousand is a lot of money…They are bringing poor little babies into this world not for love but for money…these children as sad as it is will be a huge problem in another 20 years also not to mention a very big problem for Docs and family members picking up the pieces when the bonus money runs out….PLEASE Stop the Bonus before it is to late…the other 2 neices 17 and 16 are having their first babies….thats 8 babies
already because this bonus and none of these babies are doing well and Docs have been already involved….if we need more population let bring in educated immigrants
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I am pregnant and have gestational diabetes, I live in Rural area my pregnancy is high risk so doctors refer me to city for pregnancy care it will cost me far more than $4000 to have this baby, most people I know are using the money for baby it’s not cheap buying every thing needed for baby, before baby bonus it was claimed teen girls were having baby for the sole parents Pension, Teens will still get pregnant regardless of baby bonus, there were Teen mums 50 years ago before payments given.
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I am pregnant and expecting my first child in August. The baby bonus will allow me to take time off work to raise my child for a few months. I work casually and the bonus would be an immense help. It has also been factored into our budget for when our little one arrives and to be facing the prospect of not getting it is quite scary as we cannot really afford not to or I will have to return to work straight away.All the money will be going towards the baby, not wasted on stuff for us.People who are having babies in order to recieve the bonus need to be better educated about the cost of having babies.$4000 – $5000 is just the start of what is required.
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If it wasn’t for those people earning higher salaries, who would fund benefits to those in lower paying jobs? Surely the current Government should support those earning a higher salary and ultimately getting taxed more to assist them distribute their yearly budget handouts, not penalise them as the Rudd Government is proposing.
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Baby bonus is disgraceful!
Australia already has too many people for it’s resources like water and arable land. Environmentally it’s wrong to increase the population. It’s already growing without the bonus and the skilled worker jobs won’t be taken by more Australians if we already don’t want them. Temporary immigrant workers is the key. Trouble is single mothers or poor mothers are having kids just to get the bonus for themselves!
Maybe I should have a baby then adopt the thing out when I get the bonus!
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TERRI…I sincerely hope you have no children currently & never plan on having them. Shame on you for referring to a human baby as a THING!
I am also a little offended by some of the comments that suggest that women are only having babies to get the money. My husband & I are pregnant with bubba #1 & let me tell you, the $5000 baby bonus won’t even come close to covering the cost of medical bills & newborn baby expenses.
The baby bonus had ABSOLUTELY NO BEARING on our decision to start a family. My husband earns an income which will allow me to remain at home with our child for at least two years without the assistance of the baby bonus. This so called “extra” money will probably be used to pay gap payments from the health fund we belong to & if there is any left over (which I doubt) it will either go onto the home loan or be used to buy anythign we have forgotten.
I don’t doubt that the extra money was an incentive for some families who would otherwise not be able to afford to take time off work…and perhaps even some unscrupulous people are planning babies so they can get the money & spend it on drugs/booze/etc but surely these people are in the minority?
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Wow. What a disappointment. I am personally ashamed that so many of you are so ignorant to the cost of having a baby.
My wife and I are having our first baby in 12 weeks. We both work full time and we gave a large chunk of our wages to tax last year, not to mention all the other years. My wife’s employer does not pay maternity leave at all and I get a whole 1 week of paid paternity leave. The baby bonus for us means that we can spend some time bonding with our baby in the most crucial time in its life without having to put the baby in day care.
Without the bonus we would not be able to have a baby. We can afford to have a baby but we cannot afford to take the time off work to do so.
I would like to see a compulsory maternity leave policy introduced to Parliament but that should not replace the baby bonus as it is the employer who pays maternity leave. The government should be supporting parents to bring AUSTRALIANS into the world. Immigration is not the solution.
Aaron
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i think the baby bonus needs to be means tested, however, baby’s are expensive… i am a stay at home pegnant mum who work all thought my first pregnancy until medical complications required me to stop working…. my medical cost just to safely bring Luke into the world were close to 15 000 and when my employer found out i was pregnant they re-assigned my position to one without paid maternity leave…. and my husband isnt entitled to paid paternity leave. It seems we would slip through the cracks without the bonus
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