Baby bonus ‘scrapped’ in budget

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The baby bonus has been scrapped in the federal budget.

The Howard-era payment that provides $5000 for newborns will be replaced with a much lower payment.

This will see eligible families receive $2000 for a first child and $1000 for a second child.

The Gillard government had already reined in spending on the baby bonus. Last October, it flagged that payments to second and subsequent children would be cut to $3000 from July 1.

Earlier on Tuesday, Fairfax Media reported that almost $100 billion in expenditure on education and disability insurance would be locked in for a decade as the Gillard government tries to insulate its reforms from future economic pressures and force the hand of Opposition Leader Tony Abbott.

The unprecedented move is designed to guarantee the survival of both signature reforms, quell doubts over their long-term funding and prevent cash-strapped governments from diverting resources to other areas.

The political manoeuvre is set to enrage the Coalition, which has already complained of ”booby traps” being laid in the budget.

The budget contains savings to limit this year’s deficit and plans to ensure dedicated funding streams for the Gonski education reforms and the national disability insurance scheme, DisabilityCare Australia.