Baby bonus no substitute for a job

The New Zealand Herald
20 July, 2017

What is worse than watching one's parents argue? It is watching parties argue about parenting.

Last week, Labour and Act found themselves battling over Labour's proposed baby bonus of $60 a week. For Labour, this was meant to help struggling Kiwi families to get by. For Act, it was a payment that encouraged people to have children when they were not financially prepared.

The problem is that both parties only got it half-right. Of course, parents should be able to take care of their children. And true, many Kiwi families could do with some extra money.

But both Labour and Act overlook the elephant in the room when it comes to many young families' real concerns: housing costs and getting into work that pays.

Act Party candidate Beth Houlbrooke ruffled more than a few feathers last week in a Facebook post criticising Labour's Families Package. Labour's policy included $60 a week for households with a newborn for baby's first year, which would be continued until the child turns 3 for households with incomes below $79,000 a year.

Houlbrooke criticised the policy, arguing "When we pay people to have babies, it encourages them to grow their families when they might not be financially prepared or properly mature."

Let's get this out of the way nice and early: being wealthy does not make you a good parent, and some kids raised on the poorest incomes still enjoy the richest upbringings. But is it so radical to suggest that parents ought to be financially prepared before making the choice to have children?

Now, getting a bit of extra cash is unlikely to convince most people to breed like rabbits to top up the piggy bank. Apart from that, raising a child easily costs more than $60 a week.

So Labour's policy is for new parents or couples who have already made the decision to have children. The people who miss out are those who are fighting to keep a roof over their heads already, let alone considering bringing more kids in the world. It is not a policy to ease the hardship of the country's poorest.

For those who were offended with the idea that "the poor shouldn't have children they cannot afford", Labour's proposal should be equally troubling.

Nearly every month we hear new stories about families living in motels as they wait for social housing. There are kids braving the winter with only a car roof over their heads. Just recently, we heard of a single mother and her nine kids with nowhere else to go after being evicted from a state house due to overcrowding.

An extra $60 a week will not be enough to house all those families. And only those parents who have a high tolerance for stress would be convinced that an extra $60 a week sounds like a good deal for expanding their families. For the few who might be motivated by the financial incentive alone, the concern should be why they believe that having a baby is the only way to better their circumstances.

Rising housing costs are eating away at the incomes of low and middle-income households, and the aspiration of home ownership has already fallen beyond the grasp of many New Zealanders. The housing supply shortage has also made renting a more expensive, competitive and precarious market for tenants. It cannot be guaranteed that a baby bonus for all low and middle-income family will ease housing costs if families must still compete for limited accommodation.

Successive governments have already failed children by not addressing the chronic shortage of housing. And successive governments have failed those who have given up the aspiration to work because they have faced so much disappointment. A baby bonus will not help parents gain financially rewarding and personally fulfilling work.

An urge for financial independence before having children is not so much an ideological imperative, but an observation that governments are not always the best at meeting needs. In some cases, like housing reform, the Government can even be an obstacle to improving circumstances. Of course, a call for financial independence must be coupled with ensuring that those opportunities are available.

It is commendable that Labour is committed to housing reform. In the long run, that is likely to have a much greater impact on disposable incomes.

But until the housing crisis is addressed, and clearer pathways out of entrenched unemployment are made, it's hard to root for Labour's "baby bonus".

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