Budget 2013: Labor to abolish the Baby Bonus.



The Federal Treasurer Wayne Swan has confirmed the abolition of the Baby Bonus in tonight’s budget.

The Baby Bonus is a payment of $5000 for the first child and $3000 for the second, which is delivered in 13 installments to the parents of a newborn child, for families earning up to $150,000 each year.

The payment was originally introduced by the Howard Government in an attempt to ease the initial costs for families that are associated with having a child and also to halt Australia’s dwindling birth rate.

Around that time, former Treasurer Peter Costello famously encouraged Australian women to ‘have one for mum, one for dad and one for the country.

The baby bonus will be rolled into Family Tax Benefit A, so families on lower incomes will still receive some of the benefit. The rest of the money will go towards improving the Government’s budget bottom line – and help make up for the significant revenue shortfall.

While generally popular with new parents, the baby bonus policy has been criticised in the past by some commentators for being wasteful middle class welfare.

This change is a somewhat surprising move by Labor.

While it has long been acknowledged that this budget will involve some difficult cuts, it’s interesting that the Government have not sought to capitalise on their perceived advantage with women voters. This policy will mean less money flowing into the pockets of new mums and dads – and no doubt a lot of people won’t be impressed.

In contrast, Tony Abbott and the Coalition have been touting their more generous paid parental leave scheme in recent weeks. The Coalition have been deliberately setting out to woo women voters and convince them that Tony Abbott will be a good Prime Minister for women. No doubt they will seek to make the most of what is likely to be an unpopular decision by Labor.

This announcement will not affect the paid parental leave payment.

Did you get the baby bonus when you had your kids? Do you think that is money well spent? Do you think this policy change will hurt Labor with female voters? With this change and Tony Abbott’s more generous paid parental leave scheme, will Labor lose its advantage with women?