$911m election spend-up leaves many out in cold

Helen Clark

The Labour Party has promised to spend an extra $911 million a year on its election pledges so far - but between a third and two-thirds of New Zealanders will still miss out on its largess.

Yesterday's $438 million a year in extra family support by 2008-09 comes on top of $300 million a year to write off interest on student loans, $81 million for extra cataract, knee and hip operations, $50 million for a rates rebate for low-income homeowners, $25 million for extra community police and $17 million for 5000 new modern apprentices.

But at least 1.6 million New Zealanders do not have the incomes and family sizes to qualify for either family support or the rates rebate, do not have student loans, do not need cataract, hip or knee operations, and do not plan to become apprentices.

All they can hope for is to share in the benefits of the extra police and of the sixth, uncosted promise on Labour's election pledge card to date - to settle all Treaty of Waitangi claims by 2020.

Prime Minister Helen Clark will unveil her seventh and final pledge at her campaign launch on Sunday. This is believed to focus on the KiwiSaver initiative, a personal savings scheme.

The figures are:

* The higher income limits for family support (not included on the pledge card) will benefit about 60,000 families, on top of the 290,000 who already qualified for assistance under the Working for Families package announced in last year's Budget. At last year's average of 3.76 people in each family household, that means around 1.3 million people live in households that will get family support.

* The rates rebate will allow homeowners to deduct two-thirds from their rates bills above $160 a year, reduced by $1 for every $8 the household earns above an income limit. The limit is $20,000 for the adults plus $500 a year for every dependent child. Labour estimates this will benefit 300,000 households. Overall, the average household has 2.7 people, so that's 810,000 people.

* The student loan interest writeoff will benefit everyone living in New Zealand with an outstanding student loan. There were 393,382 people at the last tally in October, not counting another 25,379 people living overseas.

* Cataract operations will increase from 8000 last year to 12,000 by 2007-08, and hip and knee replacements from 4665 last year to 9450, a total increase of 8785 patients a year.

* There will be new apprenticeships for 5000 people.

Add all those up and you get 2.5 million potential winners. Out of a population of 4.1 million, that leaves a minimum of just 1.6 million losers.

However, there will obviously be a lot of overlap between all the categories. At the other extreme, if all students and low-income families claiming rates rebates and the other groups also live in households claiming family support, then 2.8 million people will miss out.

The truth, as usual, is somewhere in between.