Last word on baby bonus

… until late 2009. For some reason I had continued to hold out hope that the government would freeze the baby bonus at current levels rather than increase it to $5000. This would prevent any disruption to maternity hospitals (something that should be unnecessary even if the bonus was increased) and save $250 million per annum forever to boot. Indeed, during the election I called the neglect of the previous government on this “economic mismanagement.” That equally applies to the current government in this regard.

Here is what Health Minister, Nicola Roxon said today on Meet the Press:

EMILY RICE: Minister, just on another issue – the baby bonus is set to rise to $5,000 coming in June. In the past, some women have delayed the birth of their children to ensure they get the full financial windfall. Two economists have written to you, I understand, asking you to phase in the next bonus so we don’t have this occurring again. Are you considering a phase-in of the baby bonus next month?

NICOLA ROXON: No. Look, we’re not. The dates are fixed for when that change occurs on July 1. I must say, I think this is a little bit overstated. I would be absolutely confident that doctors will be giving their patients the best clinical advice. It’s obviously not sensible for people to make decisions based on financial arrangements rather than what’s in the best interests of the child. But I really think that this is around the margins, probably a matter of a day or two, rather than there being some serious issues of doctors advising women to wait an extra month. This is just – nature doesn’t allow it, and it would of course be a risky thing to do for the purposes of an adjustment just in the baby bonus.

So the issue is dead. These words echo those of the 2004 Minister, Kay Patterson. Of course, Patterson was speaking with the lense of ignorance and that isn’t the case here.

I think it sends a poor signal to do things like this even if the risks are small (as I hope they are). The data on this issue was restricted to us and so we could never satisfactorily assess those risks. My hope is that the Minister’s stance on this one reflects the analysis of information not readily available. But for now I am going to leave this issue aside … until late 2009 when Andrew and I collect up the data for 2008 to see what effect, if any, occurred.

6 thoughts on “Last word on baby bonus”

  1. You would have seen this by now but Marginal Revolution has picked up on your paper. Probably not as much of a thrill for you but personally, it was a pleasant surprise to have been exposed to a topic prior to Alex and Tyler blogging about it.


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