What’s the bonus, baby?

The federal government is convinced it is on to a winner with its baby bonus (or maternity payment as it is more correctly called), which currently pays out $4,000 for each new arrival, rising to $5,000 in 2008.

Would you have a baby for $4,000? Or even $5,000? For many women, it would take a good deal more than that to get them interested. The whole-of-life costs of a child are conservatively estimated at about $100,000 in today’s dollars, which makes the proposition, at least in financial terms, look distinctly unattractive.

But according to data from the Australian Bureau of Statistics, last year was a bumper one for babies in Australia – 261,400 were born, the highest figure for more than a decade. Of course, it is not possible to tell how many of these infants owe their conception to the baby bonus.

In hard-edged policy terms, if the payment is rewarding people who would have had a baby anyway, or even if it is merely causing couples to have a child earlier than they otherwise would, it is money wasted. It is that extra baby, perhaps the one for the country (in addition to the two replacing Mum and Dad), that makes the difference.

Naturally, the government is not solely interested in the demographics. The baby bonus is undoubtedly good politics, aimed squarely at the many thousands of suburban families the government likes to call its own. There is one group, however, the government is hoping will not be receiving the payment, and that is sole parents. If you are a married woman and your partner is employed, Mr Howard wants you at home having babies. If you are a single woman, he wants you to put your kids in care and go out to work.

Sole parents and their children are undoubtedly the government’s least-favourite form of family, particularly when they are receiving public benefits. Unfortunately, since the government first came to office, the number of recipients of parenting payment at the single rate has continued to rise – from roughly 350,000 in 1996, to 450,000 now. By contrast, the numbers receiving payments at the partnered rate (a much smaller group) have steadily declined since 1996.

To a large degree the problem arose from the zealousness with which the government pursued another group is does not greatly care for – the unemployed. Newstart allowances (unemployment benefits) were much less attractive than Parenting Payment (and they had a work activity test attached), so it is not surprising that single parents entering the system chose the latter form of support.

Enter (from 1 July this year) the new welfare-to-work provisions. Under these provisions, single Mums receiving parenting payment must start to look for a job when their youngest child turns eight. And if any are tempted to avoid the fateful day by having another baby, the Office of Family Assistance warns that the maternity payment may not be given as a lump sum in a host of circumstances: such as where there is a history of domestic violence, mental illness, gambling problems,

difficulty in managing finances, or where the mother is sixteen years of age or younger. In these cases, it is off to the social worker with you.

The government is to be commended for trying to reduce welfare dependency. But in pushing every last person that it can from welfare to work (the disabled are also in the firing line), it finds itself intervening in people’s lives to a degree it would find quite unacceptable in any other context. Indeed the welfare-to-work system is unprecedented in terms of its intrusiveness and expense.

I am referring not only to the role of Centrelink, but to the Job Network, the name given to the collection of private-sector organizations (including many not-for-profits) that deliver publicly-supported employment services. In its budget for 2006-07 the Department of Employment and Workplace Relations (DEWR) estimated that the network would cost $1.4 billion to run. (This is the cost of paying organisations for the unemployed people they place – Centrelink payments to beneficiaries are in addition to this figure). Nor does this figure include the salaries of the small army of officials employed to manage Job Network contracts.

Overall, the government’s propensity for social engineering has created something of a monster. The welfare-to-work system is policed by Centrelink (itself overseen by the Department of Human Services), organised by DEWR, and what social policy there is, comes from the Department of Family and Community Services. Rather than being delivered by one organisation, as in the days of the Commonwealth Employment Service, the government’s interest in employment services is delivered under contract by more than 100. 

Now the Job Network will find itself dealing with a new group of clients – sole parents (as well as many people forced off disability support). Contrary to popular mythology, sole parents are not predominantly young mothers, but older women making their way after a divorce or separation. Also contrary to popular mythology, many in this group have in the past found their own way into the workforce, once their children were old enough not to need child care. The patterns of movement are very complex. Some of these women (no doubt those who would have found jobs anyway) will be relatively easy to place. Others will not. If they end up with nothing, at least the Salvos (major recipients of Job Network contracts) will be on the spot to take them in.

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