Cullen delivers family Budget

2.45pm - By PETER WILSON

Working families get a $3 billion income boost in today's Budget and benefit increases will claw back the cuts of 1991.

Over 300,000 households and more than 60 per cent of all the families with dependent children will be the winners from programmes spread across the next three years.

Finance Minister Michael Cullen said there would be no losers.

"This government was not elected to slash the incomes of the poor," he told Parliament.

"This is not a Budget for the few, or for vested interests. It is a budget for the many.

"It does not seek to make those on modest incomes feel better off by pushing those below them further into poverty."

The new assistance package starts in April next year and will be phased in through the following two years.

The household income eligibility range is $10,000 to $80,000 and the number of dependent children is an important factor.

A family with an income of $40,000 and two children will be $40 a week better off in April next year, and $114 a week better off in 2007.

Benefit increases are relatively modest and system is being simplified. The gains, which begin next April, range from an extra $7.86 a week for a couple with one child to $52.86 for a couple with four children.

Sole parents get slightly lower increases.

Dr Cullen said that in most cases the increases would easily exceed the previous National government's 1991 benefit cuts.

The Working for Families programme is the centrepiece of his budget, and while all the Government's core spending areas get significant funding increases he has still been able to forecast a surplus of $5.7 billion.

"It is my fifth Budget and the best yet," the finance minister said.

"It is a big Budget, and one of which I am extremely proud."

New spending totals $2.4 billion in the 2004/05 financial year, far higher than any previous Budget the Labour-led government has produced, and will increase to $3.8 billion in 2007/08.

Most of the spending programmes are spread over three or four years, with substantial increases for health, education and the welfare agencies.

The troubled Child, Youth and Family Service gets a biggest funding boost, with an extra $61 million going in this year and $66 million next year.

The Government is also paying attention to accommodation needs, and there will be 1054 new state houses next year with upgrades to 856.

There is significant new spending for economic development initiatives -- $500 million over the next four years.

Dr Cullen said that over the last year economic growth had been substantially higher than forecast in his last Budget, largely driven by the domestic sector.

He said that when external factors were taken into account, growth was expected to run at 2.8 per cent through to March next year and 2.5 per cent for the year ending March 2006.

Dr Cullen said his critics had consistently predicted gloom and doom amid evidence of success.

"There are extreme ideologues who, in order to feel comfortable, need to see policies that make most people miserable," he said.

"The Government has been guided by the belief that economic progress cannot be achieved by the waging of near permanent war on the hopes and aspirations of most New Zealanders."

- NZPA