Labour's Families Package good for Maori, children and parents

Labour's Families Package is being hailed as good for parents, children and Maori - but some don't think it goes far enough.

The package will kick in from July next year and is forecast to almost halve the number of children living in poverty.

The changes are expected to benefit 384,000 families with children by an average of $75 a week. A further 650,000 families without children are expected to benefit by an average of $14 a week through the increases in Accommodation Supplement and Winter Energy Payment.

Auckland Action Against Poverty co-ordinator Vanessa Cole did not believe the package would effectively tackle poverty. She said the Government needed to look at poverty in a general sense instead of just focusing on children.

The key to dealing with child poverty was to increase the income of the parent, Cole said.

"There needs to be an increase in benefit levels across the board. Benefit levels should be a liveable amount to live in dignity and participate in society.

"Right now benefit rates are at poverty levels."

Prime Minister Jacinda Ardern explains The Families Package at a press conference in South Auckland. Photo / Doug Sherring

The Electricity Networks Association welcomed the move but now wants Labour to follow through on its election policy to review the low-user tariff subsidy paid by poorer households to wealthier households.

Currently, households which use less than 8000 kWh of electricity a year contribute 15 cents a day towards the cost of providing a connection to the network. This covers only 5 per cent of the cost of supplying those users with electricity.

Around 60 per cent of consumers are on the low fixed charge. The low fixed charge benefits every consumer – including the wealthy, chief executive Graeme Peters said.

"Larger families, who might also be living in draughty, uninsulated or rented homes, usually don't qualify for the low user charge, whereas smaller families or individuals living in smaller, well-insulated homes and apartments do."

The New Zealand Taxpayers' Union called the Winter Energy Payment an "expensive mistake" and said it should be means tested.

Chief executive of the social services organisation, Te Whānau O Waipareira, John Tamihere called the package "a start". The increased support would give low income families more headspace and was a wise social investment, he said.

Tamihere believed there was a responsibility for the working poor, beneficiaries and children to be adequately cared for.

"It's a social contract that Kiwis gave up I reckon over the last 30 years.

"In the last 30 years there's been a massive wealth creation capacity in the country. Good on those who have been a recipient of it, but there are large numbers of working poor people and people on benefits

"If they have one thing go wrong, one car break down they don't have the resilience in their budget and the babies suffer… Now, we're heading in the right direction."

Labour deputy leader Kelvin Davis said the package would make a real difference to Maori by providing targeted support and focusing on tamariki.

"We all know the statistics. About a third of our tamariki are in low-income households and around a quarter are living in crowded homes.

"We know whānau have been struggling for too long and we promised we would make a difference to them and their communities. Today we deliver on that promise," Davis said.

It is projected to lift 88,000 children out of poverty through a combination of higher Accommodation Supplement changes, more generous Working for Families scheme, a "Best Start" payment for parents of young babies, and a "Winter Warmer" grant for beneficiaries and superannuitants.

The package is expected to cost $5.3 billion over four years and would be paid for by cancelling National's tax cuts -a step that will free up $8.4b over all.

The Government will also introduce a new requirement to report on child poverty numbers as part of the Budget process - the first time that would be used was in Budget 2018.

Children's Commissioner Andrew Becroft welcomed the package as he hoped it would make a big difference for children's lives.

"These are really positive steps... Raising family incomes, enabling warmer homes, and providing additional assistance for the first year of a child's life (targeted thereafter), will do a great deal to improve outcomes for our children. Income is fundamental to better outcomes for families."

​The details:

PEOPLE WITH CHILDREN

•Working for Families payments will increase by $1056 a year for children under 16 and $575 for 16-18 years olds.

•26,000 more families will be eligible after the abatement threshold is lifted from $36,350 to $42,700. The abatement rate will increase from 22.5 to 25 per cent.

•For low income families the threshold for family tax credits will increase from $23,816 to $26,156 - the increase was made to ensure people with children would be better off working full time than on the benefit.

•The Foster Care Allowance, Orphan's Benefit, and Unsupported Child's benefit will increase by $20.31 a week.

PEOPLE WITH BABIES:
•Available for babies born on or after July 1, 2018.
•The Best Start payment of $60 a week for those not on paid parental leave until the baby turns one.
•Low and middle income earners get it until baby turns 3 - it abates over $79,000 income.
•Also available to foster parents and the carers of orphans and unsupported children.
•About 65,000 newborns a year will qualify.

LOW INCOME HOUSEHOLDS ON ACCOMMODATION SUPPLEMENT:
•significant increases to Accommodation Supplement, especially for those living in areas such as cities with high cost of living. Changes take effect April 2018.

SUPERANNUITANTS and BENEFICIARIES:
•a Winter Energy Payment of $450 a year for singles and $700 for couples.
•Paid to superannuitants fortnightly and beneficiaries weekly from May to September.
•Expected to benefit about one million people, including 710,000 superannuitants.
•It is auto-enrolment - people can opt out.
•Does not need to be spent on heating.
•Begins July 2018.

SINGLES AND THOSE WITHOUT CHILDREN:
•Independent Earners' Tax Credit of up to $10 a week will be retained for low income earners on $24,000 to $48,000 a year.