UF has solution to OECD problem

United Future leader, Peter Dunne, says his party has the obvious solution to a problem identified by the OECD in its report Babies and Bosses, due to be released tomorrow, which reviews New Zealand’s policies that support parents in their choice of work and childcare options.

“Although much public attention has been focussed on the recommendation that the Domestic Purposes Benefit be cut,” he says, “a much more fundamental matter is the observation that the Government’s ‘Working for Families’ package does little to lower the tax rates facing the second earner in a two-parent family, giving them limited incentive to work or search for a job.

“United Future has for years been advocating income splitting for tax purposes – a system in which the income of both parents is combined and then halved for tax purposes, leading to a lower tax rate for working families.

“This leaves more money available to the family for childcare and other family support services, precisely at the time when it is most needed.

“For example, a couple with a single income of $55,000 a year now pay tax of $13,020, leaving them with $41,980 in the hand.

“Under income splitting, their annual tax would be $10,725, leaving them with $44,275 in the hand, a pay rise of $2295 a year.”

Me Dunne said United Future will continue to push this policy right through to the next election and beyond as part of its commitment to improving conditions for the New Zealand family.

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