Labour has dramatically boosted its Working for Families package -- promising to extend targeted tax breaks to 60,000 more working families from April next year, Prime Minister Helen Clark announced today.
The extension of the package means about 350,000 families would be eligible from April next year under a Labour-led government.
The changes would mean a family with two children and an income of $65,000 would receive $64 a week in tax relief from April next year, rising to $84 a week in April 2007.
Miss Clark said the extension meant that almost all families with a combined income of $70,000 or less would receive tax relief.
Families with three children earning up to about $90,000 would become eligible, as would families with four children earning up to $110,000.
Families with children and an income of less than $35,000 a year would, in effect, be paying no tax at all from April 1 next year.
Miss Clark said that at the lower income end of the scale the policy represented an "aggressive assault on child poverty". But she said even families with children on much higher incomes struggled to make ends meet. Tax cuts would deliver little to these families, whereas Labour's tax relief plan delivered large amounts of money where it was needed most.
The extension would cost an extra $440 million a year by 2009, with a cumulative four year cost of about $1.3 billion.
Miss Clark said if the eventual $440 million a year cost of the extension was spent on tax cuts it would deliver only about $4 a week to most people.
She said the Government had always intended to eventually expand the programme, but when it became aware of the extra cash available to it three or four weeks ago, it decided to move sooner rather than later.
People can find out what they would receive by using a calculator on the Labour Party website [link below].