Back on the bad public policy bandwagon, I'll be interested to see where the Rudd government goes with regards to the baby bonus. Despite the fact that Jen and I are sitting on a nice little earner come August, I think that it is yet another good example of terrible public policy from the Howard government. There is no real social or economic rationale to the policy (in its present form), and really stands out as a crude inducement to win votes. These are generally where the most obvious public policy failures occur.
Thus, I was interested to read this piece by Professor Joshua Gans on his Core Economics website. In it, he argues that the bonus can be eliminated with little political cost. It is an interesting take on how government might phase out the bonus, and if there is one thing to be learned from the media's appalling presentation of the issue of carers' bonus payments, the purging of previous government's bad policies ('inducements') will have to be managed very cautiously.
Comments
Howard ugghhhh. Just had to say that first ;)
I remember many commentators arguing that the baby bonus plus ridiculous child care costs where designed to encourage mothers to stay home. I think women at home was a core belief for the far right Liberal's Lyons Forum of which both Howard and Abbott were members.
I too will be interested to see how Rudd handles this.
Very interesting post.
I agree with you that Howard was all about keeping women at home. When Henry was born, I was shocked to learn that the tax breaks offered to those parents who stayed home full time to care for children had to be a an actual person full time, not equivalent.
Now, I'll admit that I'm not all that comfortable with leaving a baby in childcare (nor is my wife).
We had assumed that both of us could work part-time (with at least one of us home every day), and that this would be acceptable to get the tax break. But no, it that wasn't allowed. It had to one person, not the 'equivalent' of one.
Given the demands of breastfeeding, and the simple fact that men have a greater earning capacity, you can probably guess who almost always stays home and who almost always goes to work.
It's really bad policy, and is counter-productive to both getting fathers involved in raising children, and allowing women scope to balance career and family.
It is a ridiculous policy. The notion of 'quarantining' payments makes me even more uncomfortable. It's interesting that Rudd is going down this path so soon.
Therefore, they don't have similar rights as people earning higher wages to forgo paying the 'voluntary' fees each year.
So they sit beside fee evading parents on huge wages at assemblies... knowing they didn't have a choice but to pay the fees... rather than having the right to spend it on an item of uniform or the books needed each year (all which attract GST)!
The 'real needy' may still get these allowances but they don't really have a say in how it is spent and it usually ends up back with the government anyway!
Hopefully the new lot can start to address some of these things.
My bitterness comes from years of fighting the Liberals to keep the Housing Co-Op that I am a member of going (the Co-Op houses welfare/low income earners in affordable housing that is integrated in the wider community and not concentrated in low socio-economic areas, such as public housing estates. Therefore, hopefully, eliminating the stigma of being 'poor')...only to heave a sigh of relief when Bracksy got in...and bugger me if the friggen turncoats didn't go ahead and implement all the changes that Kennett had tried so hard to impose on us!
And don't get me started about the funding for special needs kids in schools!
Or the increased cost of renewing car registrations for pensioners....or paying tolls on freeways...all things that Labor said they wouldn't do...and did.
So it is with trepidation that I await to see how the Rudd government's term(s) in government unfold!
PS Don't get me wrong though...I did vote for them. Coz I would cut my hands off before I voted for the Liberals!
It might be a little more expensive to set up and administer, but you save so much in other (albeit unquantifiable) terms. If you can avoid concentrating low incomes (or welfare dependence), you limit inter-generational alienation from the education system, concentrated unemployment, the generation of drug markets, the concentration of criminality, et cetera et cetera. The easy, cheap option in the long run is neither easy nor cheap for anyone, especially governments.