Julia Gillard has announced another change to the baby bonus.
JULIA Gillard has backtracked on Labor policy by announcing advance payments of the baby bonus in a bid to tackle cost of living pressures.
Labor would also liberalise advance payments of the family tax benefit, the Prime Minister said.
Under the changes, parents will be able to get an up-front $500 payment of the baby bonus to help with the arrival of a child.
Under the previous Howard government’s original baby bonus scheme new parents were given a lump sum payment of $5000, but the Rudd government changed the method of payment to fortnightly instalments.
Under the new baby bonus advance, the up-front amount would be recouped over subsequent fortnightly payments and the overall payment will remain at $5,294 per child.
The $500 would be paid together with the first instalment payment, with the remainder to be paid by way of 12 subsequent fortnightly payments of $368.
It’s not clear from the article when that’ll happen, but the other change being announced starts in July 2011. It should start immediately. These delayed policy changes can have adverse health effects. Just ask ALP candidate Andrew Leigh.
In an earlier paper (Gans and Leigh, 2006a), we analysed the effect of the introduction of the $3,000 “Baby Bonus” for children born on or after July 1, 2004. We demonstrated that parents behaved strategically in order to receive this benefit, with over 1000 births being “moved” so as to ensure that their parents were eligible for the Baby Bonus. On July 1, 2006, the payment was increased by $834. In this paper, we analyse births in 2006, and find that again, a large number of births were moved. We estimate that over 600 births were moved from June 2006 to July 2006, with unknown and potentially adverse health consequences.
Update: The Punch has more.