According to today’s press, the Baby Bonus is about to be means-tested:
But yesterday Mr Rudd began the speculation the baby bonus and other forms of so-called middle-class welfare would be means-tested in the budget.
“I say people at the upper end of the income spectrum don’t actually need direct support from the government, much,” he told radio 3AW.
The bonus is worth $4187 per child* and is scheduled to rise to $5000 on July 1.
As I’ve argued before,Â the Baby Bonus is bad policy and should be scrapped. Still, means-testing it would be a step forward. But there’s one important thing to bear in mind – any change to the Bonus should come into effect on the day it’s announced, and not on July 1. We already have an incentive for eligible parents to shift births from June to July. The last thing we need is another incentive for affluent parents to shift births back from July to June. If that occurs, then here’sÂ the kind of thing we can expect.
With the alcopops tax, the federal government has demonstrated that it can change policy immediately when it sees the potential for people to game the system. The same should happen with any changes to the Baby Bonus.
* Not that it matters much, butÂ the Baby Bonus is actually worth $4258Â at present.