Child poverty advocates see no relief in Budget

Child poverty advocates say the Budget provides no relief for families struggling to cope with high rents and low incomes.

Child Poverty Action Group economist Dr Susan St John said she was hoping for improvements in housing subsidies and family tax credits, but the Budget provided neither of them.

Instead, the Government is quietly implementing changes announced in 2011 to lower the income limit for the maximum family tax credits from $36,827 to $35,000 a year, and to raise the rate at which the credits are reduced from 20c to 25c for every extra dollar earned above the limit.

"So in terms of family incomes, Working for Families is virtually ignored, so the policies that that were set in 2011 are just continuing to work their way through, eroding the value of Working for Families," Dr St John said.

"The other thing is that there is no commitment to acknowledging the massive failure of the design of Working for Families by excluding the poorest families from the [in-work tax credit of] $72.50."

The in-work credit is paid only to two-parent families who work at least 30 hours a week between them and to sole parents who work at least 20 hours.

The Budget also failed to increase the maximum rates of accommodation subsidies, which have not changed since April 2005. Many families, especially in Auckland, are now receiving the maximum subsidy so they get no relief from any further rent increase.

Dr St John said housing subsidies needed a complete overhaul.

"There is nothing in the Budget. It doesn't even tinker with housing policy," she said.

"Fundamentally the housing market with all this speculative activity is what needs to be properly addressed. Unless we deal with that root cause, we are just pouring fuel on the fire to increase the accommodation supplement."