Budget 2017: Mixed response to Family Incomes Package

UNCONVINCED: Jazmine Tipene 7, Rawinia Tipene, Lathan Tipene 2 weeks, Ripo Matau 13, Manaaki Tipene 1, Hemi Tipene, Wiremu Matau 11 and Erika Tipene, 6. Photo/file

The centrepiece of the Budget 2017 will put more cash in the hands of low-income families, but it has left social agencies unimpressed.

The Family Incomes Package, which includes a mix of tax cuts and increases for many on Working for Families and the Accommodation Supplement, will cost $6.5 billion over the next four years.

From April next year, low-income families could receive between $9.25 to $25.81 extra a week through tax credits, depending on the number and ages of children living at home.

Households on the Accommodation Supplement could receive up to $25-$75 more a week maximum while larger households could receive between $40 and $80 a week, as Tauranga has been identified as a 'high support' area.

Agencies in Tauranga, who deal with families facing empty dinner tables or homelessness, were thankful for the increases, agreeing every little bit helped.

"Any relief for our families is welcome," said Diane Bruin, Budget Advisory Service co-ordinator.

However, the "devil was in the detail".

Some families on middle incomes would get less or no longer be eligible for Working for Families payments because the Government dropped the income threshold at which the credits start to decrease from $36,350 to $35,000 - and increased the rate at which the entitlements decrease from 22.5c in the dollar to 25c in the dollar.

The Accommodation Supplement was also overdue for an increase - it had not been adjusted since 2007 when it was set to reflect rents at the end of 2005.

In Tauranga, the median rent had jumped to about $460 per week, up from around $270 in 2005, according to Landlord's housing data.

"Tauranga has such high rents it means debts get behind and the last thing that is left is money for food. So even the buffer of $20 a week extra might mean a family will have a better grocery shop."

Ms Bruin said the Accommodation Supplement increase was especially welcomed and despite the delayed start it was a "sign of change".

"We just have to accept that at least it's happening."

Cath Page, St Peter's in the City manager, said it was about time changes were made.

The families that came for help for budgeting, counselling or foodbank referrals broke her heart, and any extra money would help them.

The increase in funding did not sound like a lot, she said, but it could mean an extra meal for a family.

"Anything is going to help, but who knows if it will be enough and for some families, it probably won't be," Ms Page said.

Hemi Tipene, father of four children and foster parent of two more, said some families would be better off with the changes but he was unconvinced his family would benefit.

Mr Tipene said the cost of living was rising and the tax credit scheme had not been keeping up.

Tauranga MP Simon Bridges said the benefits from the package would be "wide-reaching" in Tauranga.

"The average Tauranga family is set to get an extra $26 a week, while a couple, with both partners working on an average wage, are set get an extra $41 a week in their pocket.

"The changes to the accommodation supplement will also see families in Tauranga lifted above the threshold for severe housing stress," Mr Bridges said.

Labour leader Andrew Little said the facts had dawned on National after nine years in Government and four months out from a general election.

Mr Little said the changes meant some Kiwis would get $11, but have $10 taken away.

Family Incomes Package
From April next year:
- Cost to government: $6.5 billion over the next four years.
- Includes a tax cut of about $11 a week for workers on more than $22,000 and $20 for those on more than $52,000 a year. Those on more than $127,000 will get about $35 a week.
- Working for Families family tax credits will rise by $9.25 a week for a first child under 16 and between $17.75 and $26.81 for other children - expected to cost about $318 million a year from 2019. It means families get the same rate for younger children as for those aged 16-18.
- Impact about 1.3 million families by an average of $26 a week as well as 750,000 superannuitants and 41,000 students.