Baby bribe details not made clear

3 News reports:

Labour sold the baby bonus as $60 per week “for a baby’s first year”. But the truth was buried in the fine print. For most parents it only starts after an expanded 26 weeks of paid parental leave.

Labour’s own publicity showed the $60 payment applying from birth to age one. It actually starts after six months.

“If the parents are getting paid parental leave, they don’t get this concurrently,” says Mr Cunliffe.

“When I read the speech and looked at it, I thought absolutely you got it for the entire year your child was under one year of age,” says Prime Minister John Key. “I think David Cunliffe is being very tricky. I think he’s actually trying to mislead the New Zealand public.”

And further it seems you may be earning hundreds of thousands you until having the baby, and still get the baby bribe:

If Labour wins power, all families who earn less than $150,000 will get the bonus. Mr Cunliffe says that limit would be judged when they had the baby and were down to one income.

“It applies to income at the time they are applying for the $60-a-week benefit,” says Mr Cunliffe.

That means a couple earning a total of up to $300,000 would get the bonus if one took leave to be with the baby and they fall under the $150,000 mark. But before this could be properly clarified, Mr Cunliffe walked off.

It’s even worse than that. If Theresa Gattung was still CEO of Telecom and took a year off from being CEO to have a baby, then she’d get the baby bonus (if her partner earns less than $150,000) even though she was returning to a job that paid over a million dollars a year.

Matthew Hooton also looks at the policy. He notes:

• A family on $49,000 with a three year old will be taxed to pay an upper-middle-class welfare to families on $149,000 with a three month old.
• As a parent he knows the first year of a baby’s life is the cheapest as they eat so little. Costs rise as they get older.
• Will increase child poverty as the experience in Australia is that a baby bribe bonus increases the birth rate, leading to larger families in communities that can least afford it

Matthew also picks up on the point I highlighted a few days ago. David Cunliffe claimed that one in five Kiwi kids can’t afford a second pair of shoes, when in fact the real number is one in 20. He generously suggests Labour mixed up 20% and one in twenty!

UPDATE: Patrick Gower blogs on Labour’s misleading policy:

The Labour Party has been putting voters wrong about its baby bonus.

Labour has been deliberately misleading, and in my view dishonest by omission.

On Monday night I told 3 News viewers that under Labour’s $60 a week baby bonus policy, families would get $3120 a year for their baby’s first year.

A simple calculation you might think, of $60 mutiplied by 52 weeks, given David Cunliffe announced in his State of the Nation speech: “That’s why today, I am announcing that for 59,000 families with new-born babies, they will all receive a Best Start payment of $60 per week, for the first year of their child’s life.”

Now most normal people would think that means “all” those parents will get the payment “for the first year of their child’s life”.

But it wasn’t true – not that you would know that from Cunliffe’s speech, media stand-up, the MPs who were there to “help” and all the glossy material handed out to us.

Because buried in the material was a website link that takes you to a more detailed explanation policy.

And on page six of that policy document, in paragraph 3, it revealed the payment would commence at the “end of the household’s time of using Paid Parental Leave, ie. after 26 weeks in most cases.”

So translated, in most cases, the $60 a week payment is not for the first year, but for the second six months.

Most journalists, like our office, only had time to find this overnight on Monday.

Here’s a question. When all the media reported the policy as applying for a full year, instead of six months, did anyone in Labour contact them and tell them they were wrong? Or were they happy for the media (like everyone else) to report it the way they did, and hoped they wouldn’t notice the fine print?

Now Cunliffe and Labour knew this $3120 for one year figure was wrong, but nobody rang to correct it.

Usually political parties and the taxpayer-funded spin doctors are screaming down the phone if there is an error (and rightfully so, I might add), but in this case Labour was dead quiet.

Question answered.

And I believe that’s because Labour wanted the punters to think it was $60 for a year.

They were desperate to get cut-through and were happy to omit key information and let the wrong message get out there.

And I think that is deliberately misleading and dishonest from Labour.

At some point, I’m sure senior Labour people made a decision to omit key details on the day to maximise publicity – it was no mistake.

But not the way to win friends and influence people.

And it goes on: Labour’s Sue Moroney has just explained to me that there are 60,000 births in New Zealand each year, 59,000 of those families earn under $150,000, 26,000 are eligible for paid parental leave, meaning 23,000 will get the $60 for the full twelve months.

That means Cunliffe should have said 23,000 people will get the baby bonus for a year, which is not “most” of the 60,000 familes that have babies each year – it’s actually under half.

Interestingly it means the baby bonus will mainly go to those who were not working when they got pregnant!

Cunliffe also struggled to explain yesterday whether families would be judged on their pre-baby double income (ie. two earners of $140,000 each, getting $280,000) or after-baby income $140,000.

This seems a pretty straightforward aspect to me, and I wonder if it was policy-on-the-hoof. He either didn’t know the policy properly or was trying to avoid showing how generous the policy is.

For the record, it’s judged on the after-baby, one income and Cunliffe says he misunderstood the questions from myself and Brent Edwards.

So as I said above, the CEO of Telecom could get the baby bonus if she takes a year off. This isn’t middle class welfare, but universal welfare – which we pay for!

The bonus kicking in after six months is nothing to be ashamed of. It is a generous policy and has set the political agenda this week.

Labour didn’t have to be dishonest – it could have just told voters the truth.

Media will be very very careful with the next announcement to ignore the speech and press release and look for the fine print.