Benson-Pope David: Motions — Family Support Tax Credit—Increase 
Benson-Pope David: Motions — Family Support Tax Credit—Increase 
[Volume:638;Page:8335] 
Hon DAVID BENSON-POPE (Minister for Social Development and Employment) 
: 
 I will begin by reading a letter that I will ask for leave to table at the end of my comments. It is a letter from someone called Jenny to the Prime Minister received just last month. I will read only excerpts from it. “Dear Prime Minister I just want to say I am forever grateful to your Government for that package. Working for Families has meant the difference to me and my son in being able to eat decent food and not having to stress any more about when I can juggle the budget in order to buy food. This might not seem much to someone who has never had to struggle”—[ 
Interruption 
]; yes I am not surprised that National members do not like hearing this—“but I can tell you from me it is huge. Thank you so much for looking after the families in this country. I really appreciate it. Kia kaha and please carry on for a fourth term. I think you and your party are fantastic.”—signed “Jenny”. 
Hon Maurice Williamson 
: Signed “Your loving daughter.” 
Hon DAVID BENSON-POPE 
: I did not actually write it I tell Mr Williamson but I have to say that not many people out there in New Zealand are writing letters to the National Party about its attitude to this policy. As I said I will ask my colleagues for leave to table that letter at the end of my comments. 
So what is the Working for Families package that Jenny is so appreciative of? Well it is targeted tax credits mostly and it is targeted tax credits that are directed towards Kiwi families to help them raise their children. As of 1 April it will be affecting almost three in four of all New Zealand families with dependent children and as speakers before me have commented that is around 360000 families New Zealand families. What is it costing? It is an investment really of $1.6 billion per year to help families raise their children. This year is the only year it will cost $1.6 billion because of course one of its many advantages is that these payments are indexed. So next year it will cost more and the year after it will cost more than that. What better contribution could we make to the future of this country? 
So a family with two teenage children aged say 11 and 16—a family earning around $67000 in total and paying $350 per week on its mortgage—from 1 April will get an extra $88 a week in the hand from family tax credits. In fact almost all families that have children and earn under $70000 a year are eligible for these tax credits. Many families depending on the number of children they have that may be earning jointly between $70000 and $100000 are also eligible. So I take the opportunity to encourage people to make sure they check their eligibility. 
Families earning less will get more. That is a bit different from the flat-tax promise that the National Party had on the table at the last election. Its promise was that people earning more would get more and those attitudes have not changed. But they are not Labour Party attitudes. Our policy is about targeting money to people on lower incomes—the people who have the greatest needs. One of the key factors of this policy is the fact that Dr Cullen referred to earlier and I will repeat it that families that have children and earn less than $35000 a year will effectively be paying no tax at all from 2008. We believe that is the most effective way to target and support our families and children. It is also an approach that is common internationally. 
Dr the Hon Lockwood Smith 
: What marginal rate will they pay? 
Hon DAVID BENSON-POPE 
: The only thing in this House that is marginal is Dr Smith and his policies. 
This is the most effective way to target and support New Zealand families and children. It is also a tax credit approach that is widespread in the OECD. 
Before I come back to some of the impacts of the other 1 April changes I would like to share with the House the reasons so many people are supportive of this policy direction. The first couple I want to talk about are Josephine and William. I can tell Mr Harawira that they live in Northland. 
Hone Harawira 
: They work in my kura. 
Hon DAVID BENSON-POPE 
: They do indeed. Josephine and William have four children aged 3 5 11 and 12. They do indeed work at the kura in Kaitaia the member referred to where Josephine is the receptionist and William is the caretaker. Josephine works 30 hours a week and William works 20 hours a week. Together they earn $610 per week. They are currently receiving the following amount in extra assistance from Working for Families. The accommodation supplement sees them receiving $42 per week. Their childcare allowance amounts to $66.20 per week. Their family tax credit is $203 per week and their in-work tax credit is another $60 per week. On 1 April they will be getting an extra $40 a week in family tax credits. So the total amount that Josephine and William will be getting from Working for Families is $411.20 per week. I say to the member that I bet that Josephine and William do not think that $411.20 a week is an April Fool joke. I bet that Josephine and William do not think they are worse off than they would have been if a National Government had given them the $10 that National promised them at the last election. 
I would like to move down the country to Auckland. Aveael has one son aged 2. Whilst on the domestic purposes benefit she used the training incentive allowance to help her train as a lawyer. She is now practising in a small law firm in Auckland earning $576.92 per week. She is currently receiving the following assistance from the Working for Families package. She is getting $125 of accommodation supplement. She is getting $120 for 45 hours of childcare allowance. She has a family tax credit of $72 and she is receiving a $58 in-work credit. She will also get the extra $10 a week of family tax credits on 1 April. So the total amount of Working for Families money that she receives will be $385 per week. I bet your boots that Aveael does not think the Working for Families increase is a 1 April joke. I bet your boots that Aveael knows she is a lot better off on targeted tax credits of this sort than she would have been with the $10 tax cut that National offered her at the last election. 
I also want to talk about Raewyn and Bruce. Raewyn and Bruce have three children aged 9 6 and 3. Raewyn works part-time as an early childhood teacher and Bruce is a youth pastor at the Papatoetoe Baptist Church. They live in South Auckland. They are currently receiving the following support. They get a childcare allowance of $30 a family tax credit of $36 and an in-work tax credit of $60 and having three children means they will get an extra $30 a week of family tax credits on 1 April. So the total family tax credit package that Raewyn and Bruce receive will be $156 which is just a tad more useful to them than the $10 the National Party promised them at the last election. 
Let us just have a look at what the National Party has said about this initiative. John Key said: “National doesn’t support the current Government’s ‘Working for Families’ package …”. Well that is obviously news to his co-leader Bill English who just half an hour ago said that National would not roll back these social support initiatives. What another wonderful example of the left hand not knowing what the right hand is doing. What else does the so-called leader of the party say? John Key said: “Working for Families also imposes high effective marginal tax rates on families. These are a disincentive to work overtime and at weekends and for partners to seek part-time work.” 
Well Mr Key should tell that to Josephine and William Aveael Raewyn and Bruce and to Natasha whom I have not had time to describe to the House. John Key continues: “Policies that turn every second family with children into State dependents might be a result the Labour Party is comfortable with but simply put National is not. National doesn’t support this policy.” What National supports is flat-tax cuts so that its mates like people sitting in this Chamber get $150 or $200 a week in tax cuts but working New Zealanders get $10 a week. 
I do not know about the National Party but working New Zealanders are not stupid. They know the huge gains that are visible and that will become even greater gains as part of these Government initiatives. 
Just in case people are not sure what the National Party thinks about anything—and no one would be surprised at that—let me repeat a quote I have used before in the House. It is from an interview with the Leader of the Opposition published in a magazine earlier in the year. This is a quote from John Key: “… while I’ve used a slightly softer tone in the last few weeks than maybe Don did … fundamentally we” —the National Party—“are still going in exactly the same direction with values that line up with where we think New Zealand is heading.” What can New Zealanders expect? With this Government in power they can expect this package to continue.