Middle class welfare

This week, in the post, I got a cheque for $50 from Morris Iemma, Premier of NSW, which included a cheesy message reminding me that he is the father of four children. It was the back-to-school allowance for Chatterboy (I get Hungry Boy’s in a month’s time after he’s actually started Kindergarten).

In 2006, according to the census, there were 985,363 students attending school in NSW.  So the NSW government spent $49m on this handout, plus whatever it took to actually administer it. From the website, it appears that they created their own database from information provided by the schools purely for this purpose. So based on similar things I’ve been involved with in the private sector, the cost of getting the information, creating the mailout, and then administering the returned mail and unpresented cheques is unlikely to be less than another $5 per student ($4m in total in 2002, according to this press release).

My sons’ own school has around 650 students, so there is around $32,500 that our school could have used to educate our children. That’ll get you a teacher for 2 days a week to provide intensive reading training for kids who are struggling, or six new smart whiteboards to spread them around the classrooms a bit, or 10 extra days of teacher in service training … you get the picture. It’s more money than most P&Cs will manage to raise each year. 

There are undoubtedly some parents in NSW for whom $50 at the start of the school year means that their children can afford a new pair of shoes, or the textbooks that the school asks them to buy. I’m betting that they’re in the minority, though. For people like me, the amount makes absolutely no difference to my boys’ welfare, where nearly $50m could improve the education of the children of NSW much more.

For those families who do struggle at this time of year with the costs of going back to school, the right place to deal with this is in the various other forms of family support – Family Tax Benefits A and B. Perhaps they (particularly Family tax benefit A, which is really for people on low incomes) could do with an increase at this time of year. But of course, that’s a Federal Government payment, so the state government has chosen to appear the good guys in a relatively cheap way, but one in which is completely ineffective at targeting either the real people in need, or the educational needs of the state’s children.

  3 comments for “Middle class welfare

  1. January 22, 2008 at 7:17 am

    These things are rampant here in the States (bush just proposed another middle-class give-back to “jump start the economy”) and I think they do two things: (1) Buy votes and (2) push the consumption part of the economy.

    Both of them seem like bad ideas to me. Wasteful, inefficient, etc.

    The irony is that welfare for the genuine poor in the USA is tied up in reams and reams of regulations and paperwork, because the poor aren’t trusted to spend the money appropriately. But child tax credits for the middle class? (who in this day and age include the folks earning $100-200K, even though the median household income is around $60K) we’re glad to do that.


  2. January 22, 2008 at 9:32 am

    We have the same kind of thing – £20 pounds a week solemnly paid out to everyone, regardless of income or tax band. Baffling! But oh the rage of the Daily Mail reader if anyone tried to make it means tested (and imagine what a further punishment for the poor it would become if it was).

  3. January 27, 2008 at 3:06 pm

    Good analysis. I think this money is pure PR. There’d be only a small percentage of people who crucially need it to buy the new shoes, pencils etc.

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