'Feel-good' Budget promises to slash child poverty and make nearly 400,000 families better off by $75 a week

The Government is promising to cut in half the number of children living in poverty within the next five years.

Finance Minister Grant Robertson delivered his mini-budget outlining a families package to lift 88,000 children out of poverty. Source: 1 NEWS

Labour's flagship Families Package – outlined and costed in a mini-budget – will turn around the lives of 88,000 children.

For more on this story, watch 1 NEWS at 6pm. Source: 1 NEWS

Around 384, 000 families will be better off by $75 a week.

"We will take action on child poverty and to reduce homelessness," Finance Minister Grant Robertson said.

"We are very, very proud of this package."

The Working for Families tax credit will go up from July next year.

Judge Andrew Becroft said the fact 70,000 to 80,000 Kiwi children are living in "hardcore" poverty must change, but there is room for "cautious optimism". Source: Breakfast

The eldest child rate goes up by between $575 (for 16-18 year olds) and $1056 (for under 16s) to $5878 a year.

The rate for subsequent children goes up by between $920 and $1400 to $4745.

More families - up to 39,000 by 2021 - will also be eligible for those tax credits because the Government will increase the income threshold.

Other new benefits include a $60 per week baby bonus, for children born after July 1, next year.

Beneficiaries can access a winter energy payment of $450 for single people, and $700 per couple. Pensioners are also eligible.

It’s a critical time for the New Zealand government, and provides a look into the country’s future financial decisions. Source: 1 NEWS

It won't be means-tested, but people can opt out.

But around 600 families will lose out – and the Government has set up a "transitional" fund to help them out for a year.

Labour says the poverty package will cost just over $5.5billion dollars.

It will pay for it by reversing National’s promised tax cuts, which were due to kick in in April.

Repealing the tax cuts will save $8.36billion, leaving the Government an extra $2.84billion to play with.

Labour says tackling child poverty is "at the heart" of the Government agenda.

Ministers will update on how many children have been lifted out of poverty at every Budget, starting next year.

And instead of assessing the economy by GDP growth, Mr Robertson says the Government will measure it by wellbeing and living standards from 2019.

"This is world leading work," Mr Robertson said.

"It is important work."

From tomorrow, the Government will also resume contributions to the New Zealand Super Fund, starting at $500m.

Treasury says inflation – i.e. prices – and interest rates will start to go up from next year.

But wages are also predicted to grow by just over three per cent over the next five years.

"We want New Zealanders to feel rewarded by the wages that they earn," Mr Robertson said.