National’s tax cuts out, Labour’s families package in

National’s tax cuts have been shown the door in parliament by the Labour Party, and bringing-in its families package, which by its own admission will hand 385,000 low and middle-income families an extra $75 a week.

The government has released the Treasury’s Half Year Update The Budget Policy Statement pledging to build a sustainable and productive economy that shares the benefits of prosperity with all New Zealanders.

This treasury half-year update was much awaited to demonstrate how Labour Party would manage to provide for some of the popular policies announced recently as a part of government’s first 100 days program – a detraction that the main opposition National Party often invokes.

However, the government is appearing confident to be able to find money for all major policy announcements.

 Finance Minister Grant Robertson reiterated confidence that the Government’s policy programme will deliver a stable and growing economy which is fair for all New Zealanders.

“We will fix New Zealand’s social and infrastructure deficits by investing in families, education, health, housing and our regions,” Mr Robertson said.

$5.5 billion packages for poorest families

The government is envisaging reducing child poverty by investing $5.5 billion in range of social schemes including Accommodation Supplement changes, Working for Families scheme, a "Best Start" payment for parents of young babies, and a "Winter Warmer" grant for beneficiaries and superannuitants.

The government will be generating this fund by cancelling National’s tax cuts that will make free about $8 billion.

As part of improvements to Working for Families, the Family Tax Credit rates will be simplified to a single eldest child rate and a single subsequent child rate – with substantial increases,” Minister for Social Development Carmel Sepuloni said.

The eldest child rate will increase to $5,878.

At present, it is $5,303 if the eldest child is aged 16-18, and $4,822 if the eldest child is aged 0-15

The Government is also introducing a Best Start payment of $3,120 per child ($60 a week) for the first year, providing extra help to the parents of the estimated 65,000 newborns each year.

The changes will come into effect on July 1, 2018.

Best Start will be available to all families with a baby born on or after 1 July 2018, and to families with a baby born earlier if they had an expected due date of July 1, 2018 or later.

National laments increased spending

National Party is denouncing half yearly accounts from Treasury alleging that Government debt will be going up instead of dropping over the next five years after just 49 days of the new Coalition Government.

“The previous Government left the books in very good order. Treasury’s Pre-Election Fiscal Update had net Crown debt reducing to $56 billion by 2022 from $59 billion at the start of this financial year,” National Party Finance Spokesman Steven Joyce said.

“After just seven weeks with Grant Robertson as Finance Minister, this has turned around to an expectation of net debt growing to $69 billion by 2020 despite significant growth in tax revenues,” Mr Joyce further added.