Cash incentives work: that's why governments use them

ANDREW LEIGH
SHADOW ASSISTANT MINISTER FOR TREASURY
SHADOW ASSISTANT MINISTER FOR CHARITIES

FEDERAL MEMBER FOR FENNER

CASH INCENTIVES WORK: THAT’S WHY GOVERNMENTS USE THEM

HOUSE OF REPRESENTATIVES

FRIDAY, 6 AUGUST 2021

16 per cent of Australians are vaccinated, the second-lowest rate in the advanced world. The Grattan Institute estimates that we need to reach 80 per cent vaccination of the entire population, which is 90 per cent of adults, if we are to avoid overwhelming the hospital system. The government has a lower target; its phase C triggers when 80 per cent of adults are vaccinated. Until now, the problem has been supply—going back to that fateful decision the Morrison government made in July 2020 not to pay Pfizer a billion dollars for enough vaccine to vaccinate every Australian adult. But the government tells us that by 1 December there will be no problems with supply and that the challenge will then switch to getting the available vaccines into arms.

That's why Labor has proposed a $300 payment for everyone who gets vaccinated by 1 December. According to Essential polling, 11 per cent of Australians say they will never get the vaccine and 27 per cent say they wouldn't get it straightaway. Saul Eslake's analysis suggests that Australia has a higher rate of vaccine hesitancy than 13 other advanced nations. We have seen vaccine uptake slowing sharply in the United States, below the 80-per-cent mark, with daily vaccinations dropping from three million doses in April to about half a million today. The same pattern holds in the United Kingdom. In fact, no OECD country has yet vaccinated 80 per cent of its population, the highest being Iceland at 75 per cent.

Surprisingly, the Prime Minister called Labor's constructive proposal 'a bad idea' and said that ‘financial incentives are likely to discourage vaccination’, which is pretty strange, because back in July he said he would change the laws so a pub could give away beer to encourage people to get vaccinated. The international research shows that cash payments encourage vaccination. A recent randomised trial by Raymond Duch, Laurence Roope, Mara Violato, Philip Clarke, Adrian Barnett and Maciej Filipek found that cash incentives boosted COVID vaccine uptake by around 50 per cent. The same study found that vaccine lotteries had no impact on boosting uptake.

But ignoring the evidence isn't the strangest thing about the Prime Minister's rejection of Labor's positive proposal. The strangest thing is that he himself set up a financial incentive plan to get kids vaccinated. Every parent knows it: it's the No Jab, No Pay scheme. If you don't have your kids vaccinated then you're ineligible for the child care subsidy and family tax benefit part A. Indeed, in his second reading speech, the now Prime Minister described it as:

… an important initiative, aimed at boosting childhood immunisation rates.

So we asked him in question time this week, what's the difference between Labor's proposal to use cash incentives to boost COVID vaccinations and the policy you spruiked of using cash incentives to encourage childhood vaccination? I won't take the House through his entire answer. Instead, I'll quote former Liberal adviser, Niki Savva, who described the Prime Minister's answer as 'convoluted, unconvincing gobbledegook'.

And, stranger yet, the federal government provides plenty of financial incentives to encourage people to do what the government is keen to get them to do. There's the research and development tax incentive, the mature aged worker incentive, the apprenticeship incentive, the HomeBuilder incentive, the harvest trail incentive, renewable energy incentives, rural doctor incentives, the private health insurance tax incentive and the bulk billing incentive—an incentive paid directly to general practitioners who encourage unvaccinated kids to get vaccinated.

Incentives work. It's time we used them to get Australia vaccinated.

 

ENDS

 

Authorised by Paul Erickson, ALP, Canberra


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  • Andrew Leigh
    published this page in What's New 2021-08-06 10:07:49 +1000

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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.