Budget to benefit '60 per cent of families with young children'

5.00pm

Sixty per cent of families with dependent children will benefit from the Government's family assistance package to be announced on May 27, Finance Minister Michael Cullen said today.

Dr Cullen told Parliament that 300,000 families would benefit from the Government's Future Directions package, which is designed to help working families and create a bigger gap between work and benefits.

About 50,000 of those families do not currently receive any form of direct assistance.

Under questioning Dr Cullen denied that more than half of the money -- expected to eventually be about $1.1 billion a year -- would go to beneficiary families.

"Those who are not on benefits will gain substantially more than those who are," he said.

But ACT leader Richard Prebble said there were currently 540,000 families with dependent children, about a third of whom were beneficiaries, meaning most working families would miss out.

"Simple maths shows the majority of working families will get nothing from the budget."

In all there were 1.5 million households in New Zealand, he said.

"The only role for the other 1.2 million households is to pay the taxes that he is so liberally spreading out to welfare families."

But Dr Cullen said a further 300,000 of those households were superannuitants who also received support from the Government.

Family assistance is currently made up of four different payments -- Family Support, Family Tax Credit, Parental Tax Credit and the Child Tax Credit, with family support the most common payout.

Inland Revenue figures show that 259,200 households received such payments in the year to the end March 2003.

Of those 174,100 were on benefits and 85,100 were non-benefit families.

Government officials last week told NZPA that around 48,000 working families would benefit for the first time as a result of the package.

Who gets help currently, and how much they get, depends on income and how many children there are in the family.

Dr Cullen previously suggested that families with income of up to almost $60,000 will get more assistance if they have enough children.

He has stressed the total cost of the package was to be phased in over a number of years.

Besides the family assistance package the Government is also promising increased housing and childcare assistance.

- NZPA