This guy makes sense

Randall Denley, The Ottawa Citizen, ottawa citizen
Published: Friday, March 30, 2007

Budgets normally lose their media profile a day or two after their release, but
Ontario’s new child benefit is worth more detailed scrutiny. By making a new social welfare program the centrepiece of his budget, Premier Dalton McGuinty is making a clear statement of values. He’s telling us that government’s job is to provide handouts, not to encourage and reward
individual effort and entrepreneurship. Just to underline the point, McGuinty dismissed tax cuts as “trinkets and baubles.”
Unfortunately, his big social program is pretty much in the trinket range itself. It will provide $250 per child to low-income families this year, rising to $1,100 four years from now. Despite all the rhetoric about giving children the best possible start in life, that kind of cash isn’t going to lift anyone out of poverty.
After the budget, CTV
Ottawa anchor Max Keeping asked McGuinty how many fewer children would be in poverty because of the program. McGuinty wisely
refused to provide a figure,
but if you guessed zero, you’d be pretty close to the mark.
When McGuinty came to power, a person on welfare with one child was getting $10,195. The amount should have been $11,658, but the Mike Harris Tories were clawing back the federal National Child Benefit, which was still being received in full by the working poor.
McGuinty campaigned on a promise to end this unequal treatment. As a result of his new Ontario Child Benefit (OCB), that same parent on welfare will receive $11,660 by 2011. So after eight years, the person on welfare will be $2 ahead of where they should have been in 2003.
The government says parents on welfare will ultimately get $25 million more than was originally clawed back, but that includes three small increases in the general welfare rate.
The new program broadens eligibility for child benefits so low-income families get them, too. This roughly triples the number of families getting a government cheque.
Denley: Money won’t make much difference
Continued from page E1
Families earning up to $20,000 will get the full benefit, but for every dollar they earn above that amount, the government will reduce their child benefit by eight cents. A family with two children will still get some benefit up to an income of $47,500.
The fundamental strategy is correct, to treat parents the same whether they are on welfare or are working poor. McGuinty put it in a rather unusual way, saying that children of working poor families were being “discriminated against” because they don’t get the same kind of child benefits the people on welfare get. One would have thought their higher incomes would offset the discrimination.
Ontario already has two existing programs that pay child benefits to people on welfare and the budget says that if those people have higher benefits under the old program, they will continue to get the larger amount. One would logically conclude that the old benefits plan, while confusing, pays more. So are people on welfare ahead, or not?
The good thing is that people moving to welfare from work won’t lose their child benefits. The government says this removes the disincentive to work, but not quite. People on welfare now lose 75 cents in welfare payments for every dollar they earn, after a small exemption. The government has reduced that to a 50-per-cent reduction, but it’s still a powerful disincentive to take part-time minimum wage work. In effect, the welfare person only gets half the pay others would get.
For the government, the Ontario child benefit is a politically attractive solution to a tricky problem. The challenge for the McGuinty government was how to take an unmet four-year-old election promise and turn it into a shiny new program. Just saying that you were ending an unfairness for people on welfare, eight years after you promised to do so, isn’t a winner. The details of the new program are nearly impossible to follow, but so much the better. Just think of it as “a bunch of money for poor families.” Unfortunately, social programs that try to deliver a little money to a lot of people tend to be ineffective. The maximum $1,100 a year still leaves the single mom on welfare pathetically poor, but the government is sending money to other parents with four times the family income. Other than encouraging them to vote Liberal, what’s the real benefit?
How much difference will the few hundred dollars a year per child low-income working families receive really make? Certainly far less than the premier claims. In the same CTV interview, McGuinty said this new program will enable children to go to school ready to learn and they will graduate, move into apprenticeships, university or college, get good jobs and develop into caring citizens that contribute to our economy. And all that for a maximum of $1,100 per child per year.
McGuinty says his child benefit is “a powerful economic strategy.” What low-income families really need are those $20 an hour manufacturing jobs that have been disappearing at an astounding rate during the McGuinty regime. What offers low-income families the greater hope, a better job or a better handout?
Contact Randall Denley at 596-3756
or by e-mail, rdenley@thecitizen.canwest.com