Finance Minister Steven Joyce said his first Budget would benefit almost all workers and an estimated 1.3 million families.
From April next year, the bottom two tax rates will lift from $14,000 to $22,000 and from $48,000 to $52,000.
The change will give tax cuts totalling $2 billion a year of between $11 and $20 a week to all workers earning more than $14,000.
As well as the tax cuts, there were significant boosts for those with children aged up to 16 on Working for Families, and average increases of $35 a week in the Accommodation Supplement which had not changed since 2007.
Those with large families and high costs could get up to $80 a week more.
The total package is expected to cost $6.5 billion a year.
Labour is the only party which is not voting to support National's Budget legislation to introduce tax cuts and increases to Working for Families and the Accommodation supplement after both the Green Party and NZ First confirmed they would support it for the support it gave to lower income earners.
In a very rare move, the Green Party and NZ First are supporting the Budget legislation to introduce the tax cuts and changes to Working for Families and the Accommodation Supplement.
However, Labour is opposing it, saying it will only deliver an average of $5 more to those who earn less than $24,000 but more than $30 to households on more than $127,000.
The Green's support comes despite co-leader James Shaw describing the 'Family Incomes Package' as "just another tax cut for the wealthy in disguise."
Co-leader Metiria Turei said the party did not agree with tax cuts for the wealthy and believed National had been eroding Working for Families.
"[However], what we are seeing in this legislation is a very meagre opportunity to provide additional funding to the families that need it the most."
However, Labour leader Andrew Little said Labour would not support it because it delivered an average of less than $5 a week to households on less than $24,000 but more than $30 to those earning more than $127,000."
Voters should not spend up large in anticipation - the tax cuts are not due to come into effect until April next year and Labour leader Andrew Little would not rule out cancelling them if Labour was in Government after the September election.
Little said it was a clear pitch by National to try to win an election, and noted it was crafted by Joyce, who is also National's campaign chair.
He said Labour would decide whether to cancel the tax cuts after inspecting the numbers more closely, but said it would not support the package.
He said there was nothing of substance to address the country's most urgent issue - the shortage of housing, and criticised the 1.3 per cent school operation grants increase as totally inadequate.
"[This] is not a Budget for the future, it's a Budget for September 23."
It was almost impossible to find a loser - but for some the Government took as much as it was giving.
Middle income earners at the top of the Working for Families ladder will be affected by the decision to lower the abatement threshold to $35,000 income and speed up the abatement rate from 22.5c in the dollar to 25 cents.
Labour's deputy leader Jacinda Ardern said National was fundamentally changing Working for Families by gradually closing out middle-income earners.
"Labour made Working for Families for lower and middle-income workers and now National is squeezing them out."
Those on incomes below $44,000 without children lost the $10 a week Independent Earners' Tax Credit - Joyce said that would be "compensated" for by tax cuts of about $11 a week.
Little said that left some on low incomes with just $1 more a week while those at the top got $20 a week.
"A single cleaner on a minimum wage will get just $1 a week extra."
Those who were getting temporary extra housing assistance would also lose that - which Joyce said would claw back about a third of the cost of the increases to the Accommodation Supplement.
The Government also announced it was doubling the cost of the EQC levy, which will add to insurance costs.
The increases to Working for Families and the Accommodation Supplement earned National some rare praise from groups including the Child Poverty Action Group which said it was encouraging but more was needed.
However, Child Poverty Action spokeswoman Susan St John said the WFF boost was a "long-awaited" change that signalled some relief for those low income and beneficiary families which got family tax credits.
However, the tax cuts offered nothing for beneficiary families and the package would also only lift 35,000 children out of housing poverty, less than half of those suffering material hardship.
Ian Hutson, the Salvation Army social policy director, said the Budget did not deliver on social housing, but the increases in the family tax credit and accommodation supplement would help vulnerable working families.
He said he was pleased the Government had listened to pleas to alter the bottom thresholds rather than the top.
"The imbalance in New Zealand society between the "haves and have nots" has been increasing over the last five years. This Budget is a step in the right direction."
The Property Investors' Federation head Andrew King was also pleased with the decision to increase the Accommodation Supplement, saying it would lead to a decline in overcrowding and missed rental payments.
King also said it was myth that the increase would simply end up lining landlords pockets.
"The accommodation supplement is paid directly to tenants. Landlords usually have no idea if their tenants receive the allowance or not."
