31 May 2005

National would stop Working for Families in its tracks

National would scrap the second half of the Working for Families package to support its policy of tax cuts, Social Development and Employment Minister Steve Maharey has warned.

"John Key has been clear National would slash elements of the Working for Families package to fund tax cuts," Steve Maharey said.

"This would be at the expense of the 60 percent of families with children who stand to gain an average $66 a week in extra assistance by the time Working for Families is fully rolled out in 2007. More than half of this gain would be eroded by National's plan to pay for its tax cuts."

Steve Maharey said the first casualty would be the In-Work Payment, which will reach an estimated 136,000 working families from 1 April next year. The payment is designed to ensure the move from a benefit to work is always financially worthwhile.

"Around 75 percent of families will get the full In-Work payment of $60 a week, and be between $15 and $45 better off than with the current Child Tax Credit.

"While an In-Work Payment is regarded as best practice by the OECD, National would prefer to abolish it to pay for tax cuts that will inevitably give working families less help to make ends meet.

"It is clear that National's tax cuts could not come close to delivering the gains under Working for Families, and would heavily disadvantage the nearly 90 per cent of income tax payers who do not earn above $60,000."

"National should come clean and admit to New Zealanders that they plan to scrap nearly half-a-billion dollars in assistance to families with children."

ENDS

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