In a brave move by the Gillard government during an election year, the Baby Bonus has been abolished in the Federal Budget.
But Treasurer Wayne Swan announced it will be rolled into the Family Tax Benefit A for lower-income families who are eligible for that payment.
The Baby Bonus was first implemented by the Howard Government to help families meet the big costs that come with raising a baby. It was also intended to boost Australia's birth rate, although it has not been proven to be particularly effective in that regard.
The bonus – worth $5000 per eligible child – was originally paid as a lump sum but was then changed so it was distributed in 13 instalments during the early months of a baby's life.
The decision is likely to be unpopular with many families and Labor will have to rely on new investments in education and disability care in order to win votes in the September election.
These changes won't affect those families who are eligible for Paid Parental Leave.
Come September, Labor will find out if families agree with the future as presented to them by the current government.
Shadow Treasurer Joe Hockey has previously said that the 'age of entitlement is over' so we can't expect the Baby Bonus to return under a Coalition government. In fact, Mr Hockey commented in an ABC interview shortly after the budget was handed down, that while the Baby Bonus has been scrapped, the money is merely being shuffled into a different scheme for families.
All he would say when questioned about what families can expect if Tony Abbott wins the election is, "Australians have to live within their means and the government has to live within it's means."
Australian Council of Social Services Dr Cassandra Goldie has praised the budget for including dental reform and changes to the threshold on the Medicare Safety Net but has expressed concern over the failure of the government to increase the unemployment payment.
The budget remains in deficit to the tune of $18 billion but Treasurer Wayne Swan has pledged to return the budget to a surplus of $1.5 in 2016.
What do you think about the Baby Bonus being abolished?
