Families to benefit in $15b plans

The Government is estimating its Families Package will lift 88,000 children out of poverty and hand 385,000 families an extra $75 a week in the back pocket.

Finance Minister Grant Robertson has lifted the lid on how he plans to finance the Government’s election promises. The package was fully revealed yesterday within a mini-budget announcement and will be passed with urgency before Christmas.

A $15.1 billion price tag for the policies of the three-way Government features a centrepiece $5.5b package targeting the poorest families. It includes a ‘‘winter energy payment’’ of up to $700 a year, boosts to incomes, and a new child payment.

The Government has already repealed $8b worth of planned tax cuts, implemented but not delivered by the last government, to pay for much of it.

Operating allowances to 2021 provide for $21.7b in new expenditure across the next four Budgets.

There appeared to be about $660 million a year of unallocated funds, which would likely pay for future policies yet to be signed off. Families package The Government is forecasting its suite of measures will give the poorest 385,000 families with children an extra $75 per week, once it is fully implemented in the 2020-21 financial year.

A further 365,000 can expect an extra $39 a week and another 650,000 families will gain about $14 a week extra in their wallets.

Robertson said his Families Package was expected to lift 39,000 more families out of poverty than the measures announced by National in May.

Increases to Working for Families payments will be achieved by boosting the payments, as well as the income threshold before slightly larger abatement rates begin to bite.

From July 1, 2018, a ‘‘Best Start’’ tax credit of up to $3120 a year will give all parents of a newborn an extra $60 a week for the baby’s first year.

For families earning less than $90,000, that payment will continue for up to three years.

For anyone on a main benefit, including superannuitants, a Winter Energy Payment will be available to pay power bills.

Single people will get a flat pay- ment of $450 a year, and couples $700 a year. About 1 million people were expected to be eligible for it.

The Government has retained a major feature of its predecessor’s families package, which was a boost to the accommodation supplement. Kiwibuild The Government is planning a $2b capital injection by 2020 to deliver 100,000 affordable homes over the next 10 years.

The Treasury said there was a ‘‘high degree of uncertainty’’ about the impact of such policies, designed to alleviate capacity constraints. The extent of demand for Kiwibuild housing was one source of uncertainty. The cost of governing Robertson has laid out a promise that the costs of delivering on the commitments Labour made to its governing partners NZ First and the Greens, will be met within the operating and capital allowances over the next four years.

‘‘On current estimates, beyond the 100-Day Plan, the Government’s policy programme is expected to result in $15.1b of additional operating spending across the forecast period.

‘‘This includes the costs of the commitments in the coalition agreement between Labour and New Zealand First, the confidence and supply agreement between Labour and the Green Party, and remaining policy elements.’’ The state of the books Economic growth was set to remain ‘‘strong’’, averaging 3 per cent, Robertson said.

Unemployment was forecast to fall to 4 per cent target by 2022, and with more people in work, wage growth was forecast to rise on average by more than 3 per cent annually.

‘‘The Treasury forecasts we will keep government spending within its recent historical range, and that net core Crown debt will fall to 19.3 per cent of GDP within five years of us taking office – as promised,’’ Robertson said.