$5.5b income boost may be a big stretch
It is generous, there is no doubting that.
And it is targeted to those who need it most, far more than the previous Government’s last iteration of a families package.
The much-needed income boost that has come into effect today is the result of one of this Government’s first actions when it came into office, after a campaign promise to repeal National’s tax cuts and target more to lower income families.
According to Treasury’s calculations, a family on $55,000 with a 6-month-old and 4-year-old is $129 a week better off with its package – and $88 better off a week than they would have been under National’s package.
There is also a winter fuel payment for beneficiaries and superannuitants, delivering $450 a year to a single person and $700 to a couple or a person with dependent children.
And the Government has done a reasonable job of regaining the narrative on this package, after it was left on the backfoot during the election campaign. National at that time convinced a large swathe of voters that this was a raid on their $2 billion tax cuts.
The Government has restored a relative sense of acceptance that this is a required measure however, when problems of homelessness and overcrowding in dark and damp houses have not magically gone away. But it won’t last forever – on either side.
One thing the previous Government was always aware of was how quickly voters banked the wins. And at the time Finance Minister Grant Robertson unveiled his package, forecasts also showed there was little by way of reserves to follow up with a second round in subsequent years. That appeared to be reinforced by Prime Minister Jacinda Ardern when she unveiled her child poverty targets earlier this year. This was the big one – the Government’s books did not allow for another bite.
That could change as the economy changes, of course, as could priorities. The families package comes in on the same day as fuel tax hikes – a double-whammy for Aucklanders. And while the gains from the families package do considerably outweigh the losses a person suffers from the fuel tax hike, roughly estimated to be $2.50 a week for most and Prime Minister Jacinda Ardern celebrated the launch of her families’ package with a message from her couch. Going live on Facebook, she looked happy and calm, with baby Neve on her lap. She revealed ‘‘this is my permanent state at the moment’’. ‘‘Either breastfeeding or this,’’ she laughed. Ardern said she ‘‘wasn’t too tired’’ and was ‘‘doing great’’. twice that for Aucklanders, it is symbolic of the fact that as soon as many families start to get a little bit ahead, start to break even or tread water, there are always more costs to eat into those gains.
The Government will learn that $5.5b is an awful lot of money, but maybe not enough to buy a parliamentary term’s worth of goodwill.