BOUNDARIES SET BOUNDARIES, PROTECT YOUR PRECIOUS TIME AND ENERGY.

MOST people believe new mothers should have the opportunity to spend time at home with their baby before returning to the workforce. Paid maternity leave would enable them to do this, but the federal Government has been reluctant to go down this path.

There are good reasons for this reluctance. If the law required employers to fund maternity leave, this would increase labour costs, depressing employment and making Australian companies less competitive.

But if the Government funded maternity leave, this would unfairly discriminate against non-working women who would receive nothing.

In the May budget, Peter Costello tried to resolve this dilemma by introducing a lump sum payment of $3000 for all new mothers. This will enable working mums to take some time out of employment following the birth of a new baby, but it will also help stay-at-home mums as well.

Everybody (with the possible exception of taxpayers) should be happy. But in the run-up to today's implementation date, a controversy has erupted about the likely effects of offering a $3000 one-off payment as a reward for having a baby.

Critics have warned that this could encourage young girls from disadvantaged backgrounds to get pregnant. There are also concerns that the cash might get squandered on booze and gambling rather than helping with the costs associated with raising a new child.

The issue of the money being squandered is a red herring. Many welfare payments get spent in inappropriate ways, but ultimately, if people are entitled to the payments, it is for recipients to decide how they use the money.

The more serious concern is that the new payment could lead to an increase in teenage pregnancies. Traditionally it is conservatives who think this way, but in the present controversy the political roles have been reversed. It is Labor's Wayne Swan who is worried that "vulnerable teenagers" might start having babies "for the wrong reasons", while Government ministers assure us that this is unlikely to prove a significant problem. So who's right?

For a well-educated, mature woman with reasonable employment prospects, a $3000 payment will have little significance in the decision about when and whether to start a family.

But youngsters have much shorter time horizons than adults do, and young girls of relatively low education with poor career prospects are unlikely to make rational decisions based on an informed calculation of long-term costs and benefits.

This new lump-sum payment could make unmarried motherhood a more attractive and feasible option for some young, lower-class, poorly educated girls. This is particularly likely in environments where family and school friends regard teenage pregnancy as normal or even desirable.

Girls looking at a future offering little more than a series of mundane, low-paid jobs (or the dole) may see the idea of a baby to love and to care for as quite appealing, and a $3000 maternity payment could tip the balance. A policy intended to help promote responsible parenthood could therefore end up producing unintended negative outcomes.

All of us respond to some extent to financial inducements, and those with least money and the worst prospects are likely to be most tempted when governments start waving dollars in their faces.

American libertarian Charles Murray has been warning us for the past 20 years that government payments unintentionally encourage various forms of irresponsible or self-destructive behaviour. In particular, Murray claims the dramatic rise in single parenthood in the US from the 1960s on was the product of a welfare system that rewarded people for making bad choices. Welfare rewarded girls who had illegitimate babies while enabling boys to escape the social and financial consequences of paternity.

By making single parenthood financially viable, Murray believes the welfare system ends up encouraging it. The lesson he draws is that if you don't want high levels of teenage single parenthood, you should stop paying teenagers to have babies outside marriage.

In Australia, the main welfare payment for single mums is not the new $3000 lump sum that is causing all the consternation. It is the single parent payment that was introduced in the '70s. Since then, the ex-nuptial birthrate has tripled. Today, almost one child in three is born to an unmarried mother and 20per cent of children are growing up with only one parent.

THE new maternity payment may well reinforce and perhaps even accelerate this trend, especially among poorly educated young women short on career prospects and employed partners willing and able to help support a family. Offering it as a lump sum rather than a series of fortnightly payments may make matters even worse. But if we are seriously to confront the question of how government payments generate undesired outcomes, this new payment should not be the main focus of our concern.

If we are determined to discourage teenage girls from early single motherhood, we need to start by looking at how the single parenting payment operates. A young girl who has a child on her own is entitled to remain on welfare benefits for the next 15 years, until the child leaves school. The parenting payment is more generous than the dole and incurs very weak mutual obligation requirements.

If a one-off $3000 payment is thought to be sufficiently attractive to lure girls into unmarried motherhood, how much more powerful is the offer of 15 years of obligation-free payments worth $386 per week (the parenting payment plus Family Tax Benefit and rent allowance for a single mum with one child)?

Murray's warnings about welfare have hitherto fallen on deaf ears in Australia, so it is encouraging to see policy commentators at last coming to terms with the idea that welfare payments can and do influence behaviour in all sorts of unintended and undesirable ways. But there are bigger fish to fry than the new maternity payment.

Barry Maley and Peter Saunders are social policy researchers at the Centre for Independent Studies in Sydney.

I COULD NOT HAVE WRITTEN THIS ANY BETTER THAN THESE 2 GENTLEMEN. IT IS SO MUCH BETTER TO GO TO THE ROOT OF THE PROBLEM.