ROCKET MAN
Will tax cuts give Natonal election lift-off?
Steven Joyce’s first Budget delivers tax cuts of $11 a week for workers on more than $22,000 — and $20 for those on more than $52,000 a year.
The tax cuts are part of a $2 billion family incomes package starting next April, which also includes increases in Working for Families tax credits and the Accommodation Supplement for housing costs. The changes mean
50,000 children will no longer be in low-income households by April next year — a 30 per cent reduction in one measure of child poverty. A school funding freeze is lifted and tertiary students get up to $20 a week more in allowances. Immigrants — including Australians — will have to wait for three years before collecting the unemployment benefit.
House prices are tipped to rise by a further 7.8 per cent in the next 12 months but the Budget contains no major initiatives to tackle Auckland’s chronic housing and transport problems.
A$20-a-week tax cut leaves one Auckland family still “despondent” and planning to leave the country. Kelly and Wayne Slattery, who pay $650 a week to rent a fourbedroom home in Botany, live on his base income of $92,000 a year plus bonuses — slightly above the median Auckland household income of $87,500.
That’s too much to get any benefit from higher family tax credits, which for a two-child working family such as theirs will cut out at a household income of just over $90,000.
It’s way too much to get the new, higher accommodation supplement, which for two-child families in Manukau will cut out at household incomes of $78,000.
The Slatterys will get a $20-a-week tax cut because of higher income thresholds for the two lowest tax brackets. But Wayne Slattery, who is in the top 33 per cent tax bracket, is unimpressed.
“When you get up to what I’m earning, it doesn’t really give me anything, to be honest,” he said.
“To me, a tax cut is the Government actually cutting tax, not saying we’re going to give you a subsidy. It’s actually saying you shouldn’t be paying 33c in the dollar [income tax] plus 15c [GST] on just about everything you purchase. You are really paying half your income, 48 per cent, in tax.
“You get to a point where you get quite despondent even reading Budgets because, to be honest, every time it’s the same sort of stuff. They are throwing money into their own inability to fix things.”
Kelly Slattery, who chairs the Howick Intermediate School board of trustees and is a member of the Howick College board, is happy with extra operational funding for schools.
“At the intermediate we have a lot of students that need extra help. That might go towards getting more teacher aides,” she said.
But she has family members on Queensland’s Gold Coast and the family sees better prospects there.
“I wouldn’t own a house in Auckland even if you paid me to,” said her husband, trade director of the group that owns Super Cheap Autos.
“I don’t believe you can honestly tell me that a house in this area is worth $1.3 million when you can go to the Gold Coast and buy a house a lot better with a pool and air conditioning and you are paying $550,000 — half the price.
“I believe a lot of our young people will leave New Zealand solely because of housing. I have young guys working for me saying they will probably move overseas solely for that fact.”