Budget delivers for low-income families and beneficiaries

By Eruera Rerekura - eru.rerekura@tvnz.co.nz | @erurerekura

The Labour Government has delivered a budget which it says will bring about greater fairness in its determination to make a difference to the lives of many New Zealanders so more can share in the gains of economic growth.

Prime Minister Jacinda Ardern was explicit about this in the Half Year Economic and Fiscal Update 2017 (HYEFU 2017) and said it was about ensuring the dividends of economic growth were more fairly shared.

"It will be a Government that makes reducing poverty and inequality a priority. That is why we are moving with urgency to introduce legislation for the Families Package. This delivers on one of the key promises in our 100-Day Plan."

Ms Ardern said the Government will be using the money saved from National's tax cuts to pay for the Families Package including its fees-free policy for tertiary education.

"The Families Package will provide a significant boost to the incomes of low and middle-income families. No family will be worse off than they are today, and most families with children will be better off."

By 2020/21, more than 380,000 families will be better off by an average of $75 a week, with many lower-income families receiving more.

“We know working families struggle at times to provide the very best for their children. The early years of a child's life are critically important to their long-term well-being and development.”

Family Package key points:
•    Projected to lift 88,000 children out of poverty by 2020/21 - a 48% reduction in the number of children living in poverty compared to the status quo.
•    That equates to 39,000 more children lifted out of poverty compared to the previous National Government package.
•    Includes a targeted boost to Working for Families, giving more money to low and middle income families, and increasing the number of families who will be eligible for support
•    Money saved from reversing National's tax cuts will be invested in Best Start as part of the Families Package - boosting income for all families with newborns.
•    Winter Energy Payment will support one million superannuitants and beneficiaries who face big heating bills in winter.

Families Package will make a real difference to Māori - Davis
Labour's deputy leader and Te Tai Tokerau MP Kelvin Davis says he stands by the Government's Families Package saying that it will make a real difference to whānau and give their tamariki a better start in life.

"We all know the statistics. About a third of our tamariki are in low-income households and around a quarter are living in crowded homes.

"The Best Start payment and the increases to Working for Families payments will significantly benefit tamariki by helping to give them a better start in life. We know that successful investment in a child's early years can prevent the need for more costly investments and support in later years.

"The Accommodation Supplement and Accommodation Benefit changes will help whānau with high housing costs, and the Winter Energy Payment will help ensure they stay warm and healthy during the coldest months." Mr Davis said.

Māori homeownership has fallen over the last 30 years by 20% - more than the general population (down 15.3%). That comes as the number of Māori renting has risen by 88% - double that of the general population.

Kelvin Davis said he was keen to turn this around.

KiwiBuild is forecast to deliver 100,000 affordable homes for first home buyers over the next 10 years.

As for the Government Fees-Free policy for tertiary education students, Mr Davis said it will give people who have never been able to access tertiary training a chance.

"This just won't be for just students leaving secondary school. An important aspect of this policy is that it is available to people who have never accessed tertiary education and want to reskill. We know that Māori are disproportionately represented in areas of work which is facing automation, such as warehousing, transport and communications."

After paying for the Families Package, the savings from reversing the former National Government's tax cuts will leave an extra $2.84 billion for the Government to invest in other priorities over the next five years.

Budget ‘too tight’ says National
The leader of the Opposition was quick to criticise the HYEFU.

“It doesn’t include a lot of the other major undertakings they’ve made say in health and education – so it looks very tight,” Bill English said.

He said that Labour have also got limited future allowances for the very large number of promises they have yet to fund such as the regional development fund of $1 billion a year.

But Mr English also added that the budget reflects the strength of the economy in the Government’s books that it inherited from National.