Australia’s leading left-familist academics are at it again today, with a 39 point list of more taxes and regulations, which they call ‘Benchmarks: Work and Family Poilcies in Election 2007’, to enforce their view on family life on the rest of us.
I have criticised much of the underlying analysis in previous posts (eg here, here, and here).
While I have objected to the way familists want to redistribute money to people with children (or to people with children on behalf of children, as backroom girl would insist), I have not emphasised they way they propose to redistribute time.
Given that most taxpayers earn their income via personal labour, some redistribution of time is implicit in the tax system. To get a given amount of after-tax income, the higher the taxes levied to support families the more pre-tax income a worker has to earn, and that means longer hours. Most men prefer to work full-time anyway, so while familist policies appropriate the results of their labour, they probably don’t actually significantly increase male hours. Women, however, are often more sensistive to the financial rewards from working (hence the complaints in ‘Benchmarks’ about high EMTRs) and their part-time work is used to bring household income up to a desired level.
But also important is the redistribution of hours within the workplace. Giving rights to some workers, those with families, denied to others means that those without families suffer the consequences – the total amount of work to be done is unlikely to go down because someone wants to work less or at a different time or to vanish for days or weeks on leave not available to others.
Employers will to some extent be able to manage these problems with casual labour (about which the same group of academics will then inconsistently complain, demanding ‘quality’ jobs) or short-term contracts. But in practice only unskilled jobs are usually easily filled this way, either because the position requires too much employer-specific knowledge or because there are too few workers in the short-term labour market. In other cases the work has to be done by requiring more hours from on-going staff.
This problem affects several ‘Benchmarks’ proposals. For example, it favours denying employers the right to refuse, without first ‘reasonably considering’ them, requests for changes to working hours including quantum of hours worked, scheduling of hours, and location of work (this is phrased as a right to request such changes, but of course employees have always held such a right – the only difference is that some external body will be second-guessing what is ‘reasonable’).
It suggests protecting employees from ‘family unfriendly’ unilateral or arbitrary changes to working hours – but if such changes need to be made, why should only those without families have to work?
Over time the ‘Benchmarks’ academics want ‘an increase in total paid leave available to working parents until households share 52 weeks of paid parental leave, including maternity/paternity and parenting leave’. A year of taxpayer expense and inconvenience to fellow workers for every kid born!
As I have said before about the left-familist workplace agenda:
What’s missing in this … is the sense that an employment arrangement is one of mutual advantage between employer and employee to provide goods and services from which other people benefit – rather than just something to benefit the employee, regardless of its effects on others.
The Australian workplace should continue to be based on arrangements of mutual advantage, rather than the arrangement being dominated by the non-work lives of some employees. It’s possible that those without families will be happy to work extra hours. It’s possible that employers will be able to accommodate requests for different hours by employing new staff. But this should be a matter of consent, not decree.
Much of ‘Benchmarks’ is just a rewrite of the old industrial relations order, not only in its attempts to micromanage every aspect of working life, but in its assumption that non-work life is relevant to the IR rules. In the old days women were paid less because it was assumed they would not be the main breadwinner and had to leave some jobs when they got married. The ‘Benchmarks’ package is little different in making assumed family circumstances and political conceptions of family life important to employment law. Yet again, we have prominent leftists wanting to take us back to the 1950s.
Andrew Norton 
I have to say, Russell, that I’m sorry, but your arguments about having kids being a “right” are very unpersuasive. Having kids is often biologically possible – calling it a “right” makes arguments extremely unclear.
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Sacha – The two words mean the same thing, but like you none of the authorities approve of ‘irregardless’. Fowler’s is kindest, merely callling it ‘non-standard’, while Bryan Garner’s *Modern American Usage* says that ‘careful users of language most continually swat it when they encounter it’.
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We should all swat it, whenever it appears!
I thought it actually wasn’t a word but stand corrected 🙂
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Sacha – a ‘portmanteau word of irrespective and regardless’ it seems, but as Pam Peters (my favourite Australian guide to usage) says ‘it negates itself from both ends, with a negative prefix and suffix, and what’s left in the middle by way of meaning is unclear’.
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A great big nothingness?! It’s a word without content!
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Russell,
For a single mother, is it better to be dependent on welfare and be able to spend time with a child, or to work and be able to support that child better and give them a better example in life? Complicated question depending on many variables.
For a two-parent family in this country, if one person has a full-time job at or above the award minimum wage, and there are children, then it is IMO absurd to propose that the other parent ‘needs’ to work to support the family. The income of such a household, taking into account FTB etc, is more than sufficient for housing, clothing, food, electricity and other essentials. If people want to be able to consume nonessentials, they may well work a second job; but this is a ‘want’ not a ‘need’. Important distinction.
Personally, I’d like to see some discussion of means-tested childcare vouchers for single parents who lack means of caring for their children while they work. Seems to me that would be a more worthwhile thing than any of the 39 proposals listed in the name of work-family balance… but then, many of the advocates of such things have always seemed more interested in making their own middle class lives easier than doing anything for people who actually are doing it tough.
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Leopold
“means tested childcare vouchers” – you mean like this?
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No.
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Why not ?
Child care benefit is income-tested, and it is effectively a voucher – you have to spend money on child care to get it. You have free choice of child care providers, and you have the choice of taking it in cash or getting it paid direct to providers who are operating in a competitive market.
What alternative do you have in mind?
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Tom – from our discussion it appeared that people have different bases for claiming ‘rights’ – so I was/am noting that because the Universal Declaration of Human Rights, the Convention on the Rights of the Child etc have been ratified by our and most other governments, these rights exist. You can argue against them, but you are arguing against existing, widely acccepted rights – whether YOU recognise them or not is completely insignificant!
You demonstrate my point about right-wing economists not providing any practical solutions to the problems we see with parents (nearly always mothers) of babies/infants trying to work as well as be a good parent. Do you really think there’s any use in suggesting that the solution is abortions (compulsory?) for the less well off, or failing that, that their children be given to other people who want/can afford them?
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Andrew, while we won’t agree about the relative merits of Eureka Street vs Policy, it seems we share an admiration for Pam Peters. For people who may not know about it, they can receive for free a very enjoyable little magazine edited by Pam:
http://www.ling.mq.edu.au/centres/sc/articles.htm
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THE BLACK KNIGHT STRIKES AGAIN
Arguing with you, Russell, is becoming more Monty Pythonesque by the moment.
In your latest post, you firstly misrepresent the basis of my debunking of your “parenthood as a human right” justification for parental subisidies. Specifically, my rebuttal was not dependent on whether you, me, the UN, or even the pink panther, thinks that parenthood is a human right. My point was that, even if parenthood is a human right, that is not a sufficient condition for its subsidisation. In other words, contrary to the way you (mis)represented my argument in your post, I was not “arguing against” parenthood as a human right; I was arguing about its relevance. I, and others, have made this point several times, yet you continue to pretend that this deficiency in your argument doesn’t exist and carry on regardless.
Further, you suggest that my post backs up your earlier point “about right-wing economists not providing any practical solutions” to the problem you perceive with parents trying to work and also care for young children. Yet, in my post, I firstly pointed out why parental subsidies are probably unnecessary for most parents to be able to do this – thus, unless and until someone points out some flaw in that argument, it is simply not incumbent on me to offer such solutions to sustain my argument against parental subsidies generally. Even so, recognising that there may be a subset of parents or prospective parents for whom that is a problem, I mentioned a number of relatively benign solutions, as well as ones that (as I acknowledged) seem extreme at present, to address that ‘problem’. Once again, you conveniently overlooked the former, and instead attempted to paint my position as if it were based on only the latter.
Overall, in view of your continued failure to confront the points that I and others have made about the deficiencies in you human rights justification for parental subsidies, and instead proceed as if labelling something a human right itself wins the argument, together with your multiple misrepresentations of my position, I do not intend to spend any more of my time debating you on this matter.
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“I do not intend to spend any more of my time debating you on this matter.” Good, I’ll have the last word then.
There WAS a lot of debate about whether being able to “found a family” should be a human right. I was closing that part of the discussion by pointing out the obvious – governments around the world accept that it is, so it is.
Once a government ratifies a convention, accepts the definition of certain rights, it implies action will be taken to allow citizens to exercise those rights, or that the exercise of those rights won’t be thwarted, if reasonable actions can be taken to that effect – thus governments pass the appropriate laws, implement policies, and set up bodies such as our Human Rights and Equal Opportunity Commission to advise and enforce etc.
That is why it is correct to say that founding a family is a right in Australia, and that the government is therefore obliged to see that people aren’t prevented from exercising that right. Economic hardship could prevent people from doing that, hence the government provides assistance to people with children.
“I firstly pointed out why parental subsidies are probably unnecessary for most parents to be able to do this – thus, unless and until someone points out some flaw in that argument, it is simply not incumbent on me to offer such solutions to sustain my argument against parental subsidies generally”.
I haven’t made a study of it, it’s just from my personal observation in very atypical workplaces – libraries – that the issue of returning to work for mothers with young children is a very big problem for all concerned, and it wouldn’t be happening if there wasn’t some necessity about the return to work. There’s lots on the HREOC website about the problem, and their solution: a national paid maternity leave scheme – a reasonable contribution to the debate.
“recognising that there may be a subset of parents or prospective parents for whom that is a problem, I mentioned a number of relatively benign solutions, as well as ones that (as I acknowledged) seem extreme at present, to address that ‘problem’. Once again, you conveniently overlooked the former, and instead attempted to paint my position as if it were based on only the latter.”
You did your own credibility in by thinking you could offer as a solution the idea that poorer people’s children could be taken from them and given to others with more money. What is your ‘position’ then? – it seems to range from the merely impractical to the monstrous. A rhetorical question since this apparently is THE END OF THE DISCUSSION.
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Russell, I think you have the same problem with the word “rights” as David Rubie has with “prescription”. On your reasoning, the Government has an obligation to set up blogs for every citizen so they can each exercise their right to free speech. Get real!
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Rajat – James said the same thing earlier – a right to freedom of religion doesn’t mean that the government has to build me a temple. I agree. And it doesn’t have to buy me a newspaper to give me freedom of speech. And it doesn’t necessarily have to give parents money because it has signed on to a definition of human rights that includes the right to found a family.
But in agreeing to that definition of rights, it is obligated to see that people aren’t deterred from exercising that right because doing so would result in real economic hardship. How it does that, and what action is ‘reasonable’ is a matter for debate and negotiation within the community.
I’m not sure why you advise me to “Get real!” – I’m supporting the actually existing arrangement we have: benefits paid to parents. It’s real enough; given your radical ideas perhaps it’s you who need to get real. Don’t you think it’s more likely/real that we will move towards a national paid maternity scheme, than move in the direction you advocate?
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I agree with Rajat and Tom on the basic issues. But Russell you are right that there is a political juggernaut against the childless. Given that the only opposition to it seems to be on this blog, only a recession will stop it.
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I’m happy to acknowledge most Australian parents are perfectly able to feed, house and clothe their own children without government assistance.
Some, however, are not. Does anyone here really think it would be possible for an unemployed person to support two children on Newstart? Do they think it would be reasonable for said children to end up on the street because their parents were lazy/irresponsible?
I’m interested in hearing clear answers to the above questions. It seems to the answer, for not just me but even for most people of ‘liberal’ persuasion must be no, and the inevitable consequence of that is some form of family assistance. But do Rajat, Tom or Mr Norton say ‘no’ to one of those questions?
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“Russell you are right that there is a political juggernaut against the childless.” Well Andrew, they’re your sentiments – there may be a broadly-based political pro-family movement, but that doesn’t mean it’s against the childless. Does it have to be a zero sum game? Are you sure that you just can’t see what’s actually in your own best interest – to live in a thriving community? Just asking.
I haven’t studied law so I could have it all wrong – but doesn’t it imply, when a government signs a convention etc, that it will implement the terms of the thing in some reasonable manner. In the case of rights, we’ve set up HREOC to advise on what should be done to meet our committments, so aren’t we obliged to pay attention to what it says?
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Leopold – I think welfare dependants are a different case. My case against FTB turns on most of its recipients not having any genuine unmet *needs* prior to redistribution.
For that group, I think this is a classic zero-sum game – it is a straight transfer from one group to the other with no ‘social benefits’ created.
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I would be really interested in knowing how many children were ‘ending up on the street’ and suffering similar deprivations prior to the advent of family tax benefits, in an era of much lower average living standards, lower or non-existent unemployment benefits, less access to contraception and abortion and much lower demand for adoptees. CIS Peter Saunders has no doubt written something on this.
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Rajat – I suspect not huge proportions, but we should not forget that the welfare state wasn’t just an ideological folly imposed without any need – a lot of people did do it very tough, as can be seen in social histories of earlier times. And the welfare state did spread risk more evenly – in the old days extended family picked up a lot more of the burden if bad luck hit a part of it. For example, my grandfather lost his father at age 5 (through death, the usual route to single parent families in the early 20th century), and was largely supported by various relatives until he was old enough to get a job.
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Rajat – it seems that you would be happy to live in a world where every child that was accidentally conceived by parents without sufficient means to support it was simply aborted or given away. I think you are in quite a small minority there. I certainly don’t think the CIS Peter Saunders would agree with you – on my reading you would have to categorise him as a right-familist who believes that there should be fairly generous allowances through the tax system for families with children. (Though on second thoughts, he does seem to favour much less generous treatment for families on welfare, so perhaps he is secretly in favour of increased abortion and adoption.)
As I think I have explained before on a previous related blog thread, any notion of social assistance that takes account of the relative needs of families of different sizes leads fairly inexorably to some form of family assistance for low-income working families if even minimal work incentives are to be maintained. I certainly agree with Andrew that many middle income families that benefit from FTB don’t “need” the money and would in fact be happy to see the generosity of FTB wound back considerably. Maybe Andrew is right and we have to have a recession for a government to be sufficiently cash-strapped though.
I also don’t really believe that people should just be able to go out and have as many children as they want as the expense of the rest of society’s taxpayers, but if is a tricky business designing a system that caters adequately for people without their own income, safeguards the rights of children (planned or not) to adequate subsistence and maintains sufficient incentive for people to work in low-paid jobs. Compromises always need to be made and there will always be some perverse incentives at the margin – the trick is to keep an eye on them and ensure they don’t get too large relative to the intended benefits of any policy.
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Andrew, I don’t doubt that’s true – some people did suffer in those days. I’m just suggesting that if we just got rid of FTB today, that number (or at least proportion) who suffer could be much smaller than it was even then. I’m also not sure if the issue today is risk-spreading as much as general redistribution. After all, it is quite possible now to buy life, disability and income-protection insurance and most people have at least the first through their superannuation fund (unless they’ve opted out). Income-protection insurance is tax deductible and financial advisors typically recommend it to anyone taking on a mortgage, let alone those having kids.
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BG, to tackle your point head-on, yes, in principle, I would have no problem with a woman aborting her foetus for financial reasons. After all, we place no restriction on the reason(s) women can choose abortion right now, which may include financial or career priorities. So what if on the margin – and I believe it would be very much on the margin – a few more women choose to abort? I’m sure you’re right that this attitude would place me in a very small minority.
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“I think this is a classic zero-sum game – it is a straight transfer from one group to the other with no ’social benefits’ created.”
I suspect it isn’t. What if a large and perfect survey found that nearly everybody thought it was “fair” that parents were given money to help with the costs of raising children. The social benefit of FTB then is that it reinforces the agreeable sense people have of living in a fair society.
Despite what you might define as people’s needs, what if you took the FTB away and the birth rate fell below replacement rate as people reacted to the disincentive to have children? I think most people wouldn’t look forward to the social consequences of a falling population, or immigration on a much larger scale.
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Rajat – my comment was aimed at your implied support for the situation where many low-income people would have only two choices – to abort or to give their child up for adoption.
I think most people would feel that providing a third choice – to keep the child with some financial assistance – would be a preferable situation. This is after all why, despite its undeniable downside, many people would regard the introduction of single parent benefits in Australia as having been a good thing.
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Russell – I doubt the birth rate would fall much. The increase in the FTB has not had a significant effect on birth rates. Though they are slightly up on earlier this century, rates for women in their 20s are still dropping while increasing for women in their 30s (and even 40s, though small in absolute numbers). So it is quite possible that all we are seeing here is the consequence of delayed childbirth, with policy have little or no impact.
And there has been a consistent pattern of poorer people having more kids, the reverse of what your money hypothesis would predict.
To the extent money is a factor, disposable income would not fall by as much as the FTB reduction because this money would be returned in tax cuts. As families already pay significantly more income tax than average, this would disproportionately benefit them.
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“And there has been a consistent pattern of poorer people having more kids, the reverse of what your money hypothesis would predict. ”
Not necessarily – it’s just that there are factors other than money involved too. Poorer women might be having more children because they don’t have the more interesting and more rewarding options that better educated women have. You wouldn’t want to skew things even further by having lower-middle and middle class women have fewer children because doing so meant a drop in their standard of living. (Have the Singaporeans been successful in getting the educated and qualified to breed?)
What do you think of my claim that a social benefit of FTB is that it reinforces the agreeable sense people have of living in a fair society?
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What do you think of my claim that a social benefit of FTB is that it reinforces the agreeable sense people have of living in a fair society?
Russell – I haven’t seen any polling on FTB, but regardless of what such a poll said I do not take my normative views from surveys. I think the public is wrong on many issues.
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Rajat,
My query wasn’t about FTB specifically but about the concept of specific transfers to families.
If you got rid of FTB, Parenting Payment would still be there, so I wouldn’t expect any major crisis. But are you in favour of getting rid of all assistance to families – or just assistance to those who have substantial private income and could clothe, house and feed their children anyway? The rhetoric on this comments thread has been unclear.
I honestly suspect the real disagreement here is not whether the state should transfer ANYTHING to ANY parents with childrne, but about the scope and quantity of such transfers. And I actually think that would actually be a more rewarding debate to have than some of this quasi-philosophical discussion about whether rights may or may not exist etc.
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Actually my old English teacher would actually have me shot for actually writing that actual sentence…
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IS vs SHOULD BE
While in my view Andrew’s response (in post 79) does not directly address Russell’s question^, it does usefully highlight the issues why we debate the merits of policies on a blog such as this, and the extent to which existing community opinion (whatever it might be) is relevant in that context.
Both Russell and BG have at various times sought to justify particular policies on the basis that most people, and/or certain institutions, think it they are a good thing and/or have committed themselves to those policies.
For example, in post 76, BG sought to justify financial assistance for some parents on the basis that most people would feel that it was a preferable option to (some) alternatives. But if that supposedly wins the argument, why are we having a debate about parental subsidies at all, given that we know that most people currently favour them?
Imagine, for example, if 30 years ago when economists started challenging tariffs in Australia, the response had been that the imposition of tariffs by government is justified because most people support them. Within its own limited logic that statement might well be true, but in the context of a debate about the merits of tariffs it would also be pretty vacuous.
Similarly, in post 65, Russell argued that by agreeing to a particular definition of rights, the government “is obligated” to see that people aren’t deterred from exercising those rights.
When boiled down, this is an argument that the government should do X because the government has said that it will do X. Again, while within its own mechanistic logic the statement may be correct*, as a basis for assessing the merits of a policy it is essentially vacuous.
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^ Russell’s question related to the extent to which people might get psychic external benefits from government actions in pursuit of fairness. Of course, whether parental subisidies are fair or not is partly what we are debating, but given that many people feel they are fair, such policies in my view would indeed generate some benefits in this respect. The question, then, would be how significant these (and any other)benefits are relative to the costs and other inequities that arise from parental subsidies.
Note that this argument is similar to arguments about the benefits to (often ill-informed) Westerners who gain a “warm inner glow” from trade restrictions on the basis of labour standards in third world countries. In that case, an assessment I did found that those psychic benefits are likely to be real, but would be swamped by the effects of such policies on people in developing countries themselves.
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* Of course, even in this limited logic, governments have another alterantive – specifically, to rescind their earlier endorsement of whatever the particular right is. Again this highlights that labelling something a right is not of itself a sufficient condition to justify a policy to ensure the right can be exercised.
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Ah but Tom, in the end policy is a lot to do with politics, like it or not. Which is why what most people support is important to politicians even if some of us can rise above it. 🙂
In the end, I understand both the arguments for and against transfers on behalf of children. As someone with children who receives no FTB and as a woman who has always sought to be financially independent, I don’t have any particular problem with some of the money I pay in taxes going to improve the living standards of lower-income families with children. I do have a problem with anyone arguing that adults are entitled to a minimum level of support from taxpayers, but children are not. Because in the end, I believe that children are human beings, not just someone’s consumption choice.
As Leopold said, unless you are prepared to argue that there should be no transfers on behalf of children in any circumstances (I think you have conceded that this isn’t your position, although I think it may be Rajat’s), then we would be more productively engaged in discussing the quantum and criteria for making those transfers. I have said on a number of occasions, both here and elsewhere, that I regard those issues as clearly open for debate.
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In response to the issue of whether financial subsidies increase the incentive for people to breed, I would have to say that I think they probably do (though maybe not in the straightforward “I want another baby bonus so I’ll have another baby” fashion). Because of the system of family assistance we have here, it is true that lower-income Australians suffer little or no reduction in their standard of living from having another child (indeed, in the short term, they may make a profit). So their incentive to limit the size of their family is not the same as for a middle income family, where even if Mum does not drop out of work altogether, there is likely to be a net reduction in the family’s standard of living with each additional child.
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In post 80, Leopold said:
I cannot of course speak for Rajat, Leopold, but as you have have repeated the implication from you earlier post (no. 67) that Rajat, Andrew and I are being unclear on whether there should ever be subsidies for parents, let me repeat for the record something I said in post 47, about what would happen if, after the removal of general parental subisies, some people continued to reproduce beyond their means:
That said, I would also point you to the arguments in that post as to why the extent of the problem (ie the number of people who would be unable to afford family with the removal of parental subsidies) would be much less than some on this thread seem to imagine.
(I would also draw your attention to the contextual remarks I made in post 47 is relation to options such as requiring recalcitrant parents to relinquish their children.)
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Actually, I disagree with BG and Leopold that the issue of parents’/children’s rights to assistance (or whatever one calls it) is uninteresting and the quantum of such assistance is the interesting or productive question.
No, I am sticking to my guns on the question of whether parents should receive anything extra at all. As I said once before, children miss out on a number of rights and entitlements presently enjoyed by adults. So, just because children are people does not imply, in my view, that they should be entitled to financial assistance just because adults enjoy such an entitlement. I think the role of the state is to intervene in the raising of children only when there are serious threats to the welfare of a child. Where that occurs, parents should face – in the extreme – losing their rights to raise their children, rather than the receipt of money as a reward for making stupid or selfish decisions.
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I think part of the problem that people have in discussing Australian family policies is that Australia has adapted features common in other countries to reflect its extremely unusual comitment to egalitarianism.
For example, when income tax was introduced in Australia there were deductions for dependent children and dependent spouses. This was on the basis that families with dependent children and spouses had less capacity to pay tax than people without family responsibilities (even though there was a system of basic wages that was set to meet the needs of families). Child endowment was introduced as we moved away from the family wage system. Payments for children of poor families (mainly widow pensioners) were introduced as a cheaper alternative to increasing child endowment, which was initially not paid for the first child in the family. In 1976 the tax rebates for children were moved out of the tax system and added to child endowment and became family allowances. This not only made the system more progressive, it also made the overall cost cheaper (because for a time the tax system was indexed, but family allowances were not). Even the current payments for birth grants were introduced in order to reduce the pressure for more expensive paid maternity leave. Child care benefit can be thought of as a more progressive, cheaper and administratively more efficient alternative to tax deductibility for child care costs (a cost of working that reduces capacity to pay).
So what we have in Australia is an extremely progressive system that has been constructed this way in order to avoid the more universal and costly systems that are common in other countries. For example, in the US there are still tax deductions for children as well as relatively new refundable tax credits for children and the EITC for low income working families. In France and Germany there are forms of income-splitting that are extended to children in the case of France. In Nordic countries there are no tax allowances for children, but there are universal family allowances that for middle and higher income are significantly higher than the payments received by middle income Australian families (and housing benefits for lower income households that vary by the number of children).
Most countries except the US also have paid maternity leave that is significantly more generous than the Australian payment.
The fact is that all other developed countries support families fundamentally on the basis that families with children have reduced capacity to pay taxes. In fact, Australia is one of the few countries apart from NZ that doesn’t do this on a universal basis. Many countries also give higher support to low income families on the basis that backroom girl has pointed out to alleviate child poverty.
Now the fact that everybody does something doesn’t necessarily make it right. But what it does imply is that the majority of people and governments in democratic countries find the basic arguments in favour of family support more convincing than the arguments against.
So what we have in a sense is different value positions as a starting point, so I’m not sure that we will ever reach agreement. But this also implies to me that in practical policy terms the more interesting debate is about details of design – about how to achieve these sorts of social objectives more effectively and with greater efficiency.
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The detailed design of policies to achieve some social objective can indeed be interesting, Peter, but:
(a) it is not what we are debating on this thread; and
(b) knowing the legitimate reasons – if there are any – for intervening in a particular area is vital if one is to design policies in the most beneficial (and/or least harmful) manner.
Your point that most countries having familiast policies is well understood here, but similarly most countries have tariffs on imports and most citizens find the arguments in favour of protectionism more intuitively appealing than the arguments for free trade: that, however, does not make them right.
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Tom N – you are ignoring what I said except in the last paragraph.
The substantive point I made is that family policies started out on the basis that governments and people believed that people with children had reduced capacity to pay tax compared to people without children. In Australia this has been adapted to make the system much more targeted to low income families with children and payable in cash, but the fundamental principle remains the same.
So rather than framing this debate in terms of rights – which I also find unconvincing, I think it is normally framed in terms of capacity and needs.
Reduced capacity to pay is regarded as “the legitimate reason” for families with children being assisted and increased needs is the reason for directing more of the assistance to lower income families.
Now no-one has to agree that they find these reasons compelling – my point is that these reasons do exist, whereas many of the people commenting on this thread appear to operate on the basis that there are no legitimate reasons for family assistance. There are – you simply don’t agree with them, while other people do.
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As I have pointed out several times already in this debate, Peter, the fact that something is costly does not of itself warrant its subsidisation. Of course, it is true that people who choose to bring children into the world have, as a result of that decision, less ‘capacity’ to pay tax than people in otherwise equivalent circumstances. But spend money on anything, and/or take time off work for anything, and you will have less income left, and thus less capacity to pay tax (or to spend on other things), as a result.
Simply asserting that “Reduced capacity to pay is regarded as ‘the legitmate reason’ for families with children being assisted…” does not justify such assistance: it is merely another fluffy statement that attempts to win the debate without actually arguing the merits of the case.
Tom
PS: Another point you made that I did not respond to was your comment that family policies have been introduced in Australia reflect our “committment to egalitarianism”. I am not sure if you were suggesting that those who oppose parental subsidies are anti-egalitarian, but if you were I would respond that I consider my position to be perfectly consistent with egalitarian principles. In fact, I would argue that, if anyone, it is those who favour general parental subsidies who are being anti-egalitarian, by discriminating between people on the basis of their lifestyle choices.
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Tom
On the egalitarianism issue you are being over-sensitive. From comment at No. 87, it is clear that by talking about Australian family policies as being egalitarian what I was referring to was the distinction between how Australia structures its family payments compared to other countries. Australia income tests its family payments and its child care assistance and provides a flat-rate payment on the birth of a child rather than providing compensation related to past earnings, and so in the sense of income progressivity Australian family payments are more egalitarian than those in most other countries. Perfectly obvious, I would have thought.
No the fact that something is costly doesn’t justify subsidisation. What justifies differential treatment – which you label as “subsidisation” – is that these costs can reduce the living standards of some individuals – children – who will potentially be adversely affected, and who had no say in the choice to have children.
Now it is standard in economic analysis to treat households of different sizes as having different levels of need. After all no one thinks that because China has roughly the same aggregate GDP as Germany that individual Chinese are as well off as individual Germans. Welfare comparisons of households are made on the same basis as welfare comparisons of countries, but with a bit more sophistication. In the welfare comparisons of households rather than using a simple per capita income comparison, income is adjusted by equivalence scales, which normally gives children a lower weight than adults. This is precisely what family payments do also.
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Peter, you justify benefits on the basis that “costs can reduce the living standards of some individuals – children – who will potentially be adversely affected, and who had no say in the choice to have children”.
Why only children, and not the adults whose living standards are adversely affected? Is it the element of choice … and is having children a choice like any other everyday choice?
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Russell
I hope it is clear that I don’t think that having children is like any other everyday choice (even though it can be analysed as if it is).
No system of family payments fully compensates parents for the extra costs of children – there is an assumption in all systems that it is a mix of adult responsibility and community responsibility.
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“Why only children, and not the adults whose living standards are adversely affected?”
Russell – where I have some limited sympathy with Tom and Rajat’s arguments is the notion that people should preferably not have children that they cannot afford to raise. So, like Peter, I don’t believe that people should be fully compensated for the “costs” associated with having children. Most people accept that their material living standard is likely to decline when they have children, but presumably they receive other benefits which make up for that reduction in living standards.
However, unlike Rajat and Tom, I have a little more tolerance for human frailty and for plain bad luck. Many children are not intentionally conceived but their parents decide that they will have them rather than abort, other people inherit children that they never intended (like grandparents raising their grandchildren when the parents die or prove incapable of the task), and some people give birth to severely disabled children that are likely to cost them significantly more than non-disabled children, both in direct costs and in income forgone to provide the care those children need.
The other thing that makes children unlike other consumption choices is that if you find that you bought a lemon (ie the child is severely disabled) or that you miscalculated your capacity to keep up the repayments, it’s a bit difficult to return the faulty child to the manufacturer or to sell it off to the highest bidder.
But as Peter observed, I think the likelihood of all of us ever agreeing is pretty small, so I’m just happy to abide by my values and presumably Tom and Rajat will abide by theirs.
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BG, I see the severly disabled child issue as a separate one on a number of grounds to what we have been discussing. (1) There is little or no risk of moral hazard; (2) I assume this is an area where the government already steps in to provide institutional care if parents lack the resources or ability to provide that care – in other words, parents already can and do often relinquish their role as caregivers. Therefore, there is an ability for parents, in a sense, to ‘return the faulty child to the manufacturer’; and (3) This does not currently seem to be a risk that can be insured against. For these reasons, I could support something like a voucher scheme where the government offered parents the cash it would otherwise spend on the upkeep of these children.
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Rajat Sood wrote:
…moral hazard…
I can see moral hazard in the context of insurance being a genuine problem (i.e. arranging for your over-insured car to be stolen) but in the context of welfare it is meaningless.
Nobody having children views it as some kind of financial jackpot unless they are seriously deluded. Having the attitude that children are a life style choice (LCD or plasma dear?) is ridiculous on many levels. You need children to keep society ticking over, helping people have them is less a problem of costs and more a solution (who is going to pay for the legal system, for example, when you have finished working?)
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Rajat – all I can say is that you seem to have little experience of the actual relationship between parent and child, if you think it is such a simple thing for parents to just abort an unplanned pregnancy or to give their child up to unknown adoptive parents or to a government bureaucracy. The fact that you actually believe that this would make for a better world just boggles my mind, really.
It seems that you really do view children as a commodity like any other. Does this mean that you also believe that parents ‘own’ their children and are therefore entitled to do whatever they like with them?
In the end, aren’t you and Tom just disagreeing with decisions that governments have made about what to do with the money they have collected from you and others through taxation. If that is your beef, I’m sure there are plenty of others in the same club, though I imagine most of them would be exercised about other expenditure items.
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Tom,
My apologies. It is a long thread; I must have skidded over that comment. Interesting thoughts, which I’d like to spend some time considering before I responded.
Rajat
The idea that removing children from their parents is a better option than giving said parents some extra money is so alien to my personal views that I see no particular point in debate on it – we are genuinely outside each others frame of reference on this.
Peter Whiteford has put my own thinking – that egalitarianism is the main case for family payments – better than I could have myself. In this context I would add that the FTB system, tied as it is to AWE and extending deeply into the middle class (thereby building political support for it), may in time come to be seen as the single most effective long-run egalitarian policy ever implemented in Australia.
Which of course would add to the annoyance it causes philosophical liberals.
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BG, you’re right – I have no direct experience of the relationship between parent and child. So I can only go on observation. What I observe is that women abort foetuses from unplanned pregnancies all the time. So it’s not too hard for some. On the other hand, of those that choose not to terminate, I observe that very few if any babies are put up for adoption these days. This suggests that once children are born, parents find them very hard to give up and are likely to do just about anything to provide for their children. Great – why don’t we make use of these observations? Women who are not really desperate to have a child can use contraception or can abort (or abstain?) and those that are desperate to have children can make the necessary sacrifices. State takeover can remain a last resort. Whilst reproduction may or may not be a right, I believe that raising children is a privilege. And, yes, I am unhappy about lots of other areas of government expenditure as well.
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Can’t stop at 99 comments, so just an obervation about analysing things: it must annoy most of you that my comments are so subjective, just as it strikes me that most of your comments are so inhuman. Disposition, family background etc count towards this but also perhaps education – in the arts and humanities we are always exposing ourselves to and reflecting on subjective experiences, in economics you are looking at statistical data. A bit like the two cultures idea of C P Snow.
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