The case against paid maternity leave

Moreover, there are very regressive aspects to the idea of paid maternity leave. In order to demonstrate my point, I will compare paid maternity leave proposals to what the unemployed and underemployed receive from the government, including those who have children. Note that under most paid maternity proposals, these women will not be entitled to receive paid maternity.

An unemployed single person with a child receives $546.80 a fortnight (with an $18.80 supplement) in parenting payment. If coupled, the payment immediately drops to $394.40 a fortnight, irrespective of the partner’s income. However, just to get these maximum payments, the recipient’s income from employment must be no more than $62 a fortnight AND the partner's income must be no more than $751 a fortnight. Furthermore, the recipient’s income reduces by the rate of 50 cents for each dollar between $62 and $250, and by 60 cents for each dollar above $250 a fortnight. Meanwhile, if the partner earns over $750, the amount received drops by 60 cents for each extra dollar.

While it is true that Family Tax Benefits do supplement these low rates of pay, they are also often available to far wealthier families.

In contrast, feminists, including Sex Discrimination Commissioner Elizabeth Broderick and Deputy assistant secretary and spokeswoman on women's affairs Amanda Tattersall are suggesting plans where mothers would receive two-thirds of their pre-maternity incomes for 14 weeks. In most cases, that would be almost twice what single people who are not in work immediately before having their baby would receive.

Meanwhile, feminist Julia Perry’s proposal would have women on six-figure salaries being paid their entire wages by the government for six months. Her plan involves little more than poor people paying for the lifestyles of the wealthy.

In fairness, the ACTU wants all women to be paid the equivalent of full time minimum wage earnings, which would be a little more than $500 per week. That is less regressive. But it still does involve families who don’t need assistance getting equal levels of it at the expense of the ordinary taxpayer.

Think about what some of these proposals would mean in practice. The extremely wealthy and the middle classes would be getting more money from the government, even though they are the least needy. The income tax paid by couples with one person working for a very modest income and the other staying at home and not eligible for the paid maternity leave would subsidise the choice of wealthier couples having children, many of whom would have combined incomes of over $100,000 before one of them takes time off. In many cases, paid maternity leave would mean a regressive distribution of income away from those who are poor towards those who are far less in need of it.

Even if you look at it from the Left’s own criteria, the plan is absurd. Those people that the Left consider to be in special classes of their own, including gay couples (who rarely have children) and career-driven women with no interest in having children, will be the biggest losers in such a scheme. Like the poor (the Left’s supposed primary concern), they will be forced to heavily subsidise the choices of others.

Why we need to reduce churn

With the expansion of the welfare state under the Howard government it seems that people have forgotten welfare’s original purpose. Once upon a time, welfare was something which was only intended for people in need. Nowadays, millionaires are happy to queue up at Centrelink in order to receive the baby bonus, or Family Tax Benefit B, or some other handout they think they need, because they want private education for their kids, private health, two cars, a McMansion and so forth, with the help of other taxpayers.

The main problem with this is “churn”: it is extremely inefficient for governments to tax people excessively, and then give them back their own money in the form of handouts. In business, it is often wise to cut out the middle man in order to maximise efficiency. Governments are often so silly and inept that they often create the need for a middle man in order to complicate things and buy votes for elections. This political strategy often works because people don’t realise that the money they are lining up to receive is the same money they originally paid to the government via taxation. The government is effectively robbing us with one hand, and giving with the other.

I look forward to the day when a federal government decides to reform our taxation and welfare systems to ensure that people are taxed minimally, and that welfare payments are well-targeted. At the moment, we have a dog’s breakfast which imposes compliance costs on businesses and administrative costs on governments. But in the end, we all pay for this stupidity.

What we need instead is an efficient, streamlined welfare service that gives to those in need while also promoting self-reliance. Unfortunately, the current federal government is yet to make a tough decision and is unlikely to care about responsible expenditure, given its penchant for subsidising Japanese firms in the manufacturing industry.