Alliance Response To Budget

The Government's Budget will increase the gap between beneficiaries and workers, says the Alliance.

It is calling for an immediate increase in benefits, especially to beneficiary families with children.

President Jill Ovens says a major cause of child poverty is, put simply, not enough income, indicated by the high number of people needing a special benefit to supplement their income. Overwhelmingly these are women on the domestic purposes benefit struggling to feed and clothe their children.

"There has been virtually no movement in benefit levels since Ruth Richardson cut the incomes of the most vulnerable in our society in her 'Mother of all Budgets'. We can't wait till next year to address this."

The Alliance says that benefits need to be increased on an annual basis in line with gains of the unionised workforce.

While the Alliance acknowledges that moves to address abatement levels will help low income workers and their families, again they will have to wait too long to see an improvement.

"The thresholds for abatement of accommodation supplement and other forms of targeted assistance have not moved for years and this has meant that low income families are effectively taxed at 100% as they try to improve their situation by working longer hours."

The Alliance supports a more progressive taxation system with tax cuts that will benefit low-income people and increased taxes for those on higher incomes, rather than the targeted approach adopted in the Budget.

"The IRD does not require workers on PAYE to file a tax return and often people don't file for fear they might end up owing money. Thus they miss out on tax credits to which they might be entitled.

"The other problem is that targeted assistance inevitably hurt those who are just over the threshold, wherever it is set, because of abatements."

Though the Alliance welcomes the change in income threshold that will mean an increase in the number of students who will be eligible for student allowance, the Party is opposed to a system based on parental income, favouring a universal student allowance and abolition of student fees.

Ms Ovens says the Government could also do a lot more to address the staggering $7 billion student debt, which unfairly affects women graduates because they earn much less than their male colleagues and therefore pay back more in interest.

ENDS

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