Labour on attack over Budget tax move

Michael Cullen explains some of the details of the Budget to Kapiti Coast Grey Power yesterday. Picture / Mark Mitchell

Nearly 200,000 families have gained an average of $28 a week in family assistance from Working for Families increases last month, says the Government.

Extra cash has gone into families' pockets through accommodation supplement and childcare support increases included in the package.

The Government released details of the impact of the increases yesterday as the debate over tax cuts continued.

It is on the offensive after criticisms its tax threshold changes will deliver low-income earners less that $1 a week and not for three years.

Social Development and Employment Minister Steve Maharey said the results were clear evidence the package was already working.

And he claimed National's proposed tax cuts would be at the expense of those families.

While there were accommodation supplement rises last October the first family assistance increases flagged in last year's Budget package took effect from April 1.

Further increases will occur next April and the following April.

The figures showed that in the first two months of the family assistance increases an extra 13,950 families were receiving a payment.

The Government claimed the uptake figures were higher than expected. In total 196,230 families with an estimated 385,000 children now received family assistance.

The average payment had increased by 33 per cent - an average of $28.

The average gain from increases to childcare assistance was an extra $23 a child, while the widened eligibility also meant parents received assistance for 8 412 more children than in April last year.

The average gain from increases to accommodation supplement was $19 a household in April.

"Not only could National not afford to continue with Working for Families and deliver a tax cut, they would need to borrow heavily or cut core Government services to pay for their promises."

Deputy Prime Minister Michael Cullen, meanwhile, was out selling the Budget to Grey Power members in Kapiti.

He stressed the Budget was about the long-term security of New Zealanders and said they would understand the need to save.

If the nation wanted fiscal security in the future, it had to start working towards it now.

"Excessive tax spending or tax cuts may be popular in the here and now, but they simply weaken the economy in the long term."