Labour aims to help kindy kid families

David Cunliffe's speech is scheduled for 1pm today at Kelston Girls' College. Photo / APN

Payment tipped for struggling parents of preschoolers in leader's policy speech.

Parents with preschool-age children are expected to be the big winners from Labour leader David Cunliffe's State of the Nation address today.

Mr Cunliffe said the policy would help lower- and middle-income parents who were struggling to keep up with the cost of living.

That help is understood to be an investment in early childhood education, and it is believed Labour is considering child payments for families with preschool-age children.

Last week, Mr Cunliffe formally announced Labour was dropping its 2011 policies for tax breaks on the first $5000 of income and to exempt fruit and vegetables from GST.

That was expected to free up $1.5 billion in its alternative budget, which he said Labour believed could be better targeted to help low-income families.

He is unlikely to announce today how all of that will be allocated, but Labour's policies are expected to be based on the recommendations of an expert advisory group in the Solutions to Child Poverty Report, which advocated a universal child payment for all families until the child turned 5, and ongoing payments for lower-income families with children over 5.

Labour's social development and children's spokeswomen, Sue Moroney and Jacinda Ardern, have both previously said the party hoped to implement as many of the recommendations as possible.

Last October, Ms Moroney said she supported a universal child payment, which would fit in with her bill to extend paid parental leave. She said Labour hoped to support families while the children were young.

The child poverty report also includes extending the Working for Families in-work tax credit to beneficiary families, and Mr Cunliffe has said he will reveal whether the party will renew its 2011 policy to extend the Working for Families tax credit to beneficiaries - a topic the party is divided on.

The former Labour Government deliberately restricted it to working families to act as an incentive for parents to work and some are reluctant to change that.