National gets hands on Budget papers

By KEVIN TAYLOR political reporter

Papers on the Government's centrepiece "Future Directions" Budget package have been released to the National Party in what National says is an embarrassing error.

A primary objective of the package is to improve work incentives for families with children in the $25,000 to $45,000 income bracket, the papers say.

The package is to include an increase in the family tax credit, which thousands of families get through a scheme administered by Inland Revenue.

National says the papers, marked "withhold", came in a bundle of documents on the minimum wage released under the Official Information Act from Labour Minister Paul Swain's office.

National deputy finance spokesman John Key said the release of the papers was embarrassing because they revealed details of the Budget, due to be delivered on May 27 by Finance Minister Michael Cullen.

A spokeswoman for Mr Swain said last night that after speaking to his staff he was "not convinced" the papers had come from his office.

The papers are a report to the Cabinet on the interaction between the recently raised minimum wage and the Future Directions package, and emails between Labour Department officials.

A spokeswoman for Dr Cullen said the papers were from mid-January and were dated.

The package had been finalised "very recently" and National was brave to assess a large and comprehensive package on the basis of a small amount of information.

Dr Cullen has indicated the package would be worth about $1 billion and be aimed at low to modest income earners.

Mr Key said the papers proved the package would be "beneficiary biased" and would offer no incentives for people to move from welfare into work.

"The lot of a family whose primary income is a benefit will be enhanced as a result of this Budget.

"Therefore, the probability of encouraging those which now represent 300,000 New Zealanders off that lifestyle will be reduced."

The papers contain candid emails between Labour Department officials usually kept from the public's eye.

Mr Key said the papers revealed a debate between the offices of Dr Cullen and Social Development and Employment Minister Steve Maharey.

The former wanted a higher standard of living for families irrespective of income while the latter wanted to send the right messages to families about work.

"The reality is the Future Directions package is not about encouraging people off welfare to work.

"It's about increasing the overall income of all families no matter how they derive their income."

The papers also reveal the Labour Department estimated the increase in the adult minimum wage to $9 an hour from April 1 would result in 300 to 800 job loses.