300,000 New Zealanders to get relief from rates

Prime Minister Helen Clark today announced that a Labour-led government in its third term will be making big improvements in the rates rebate scheme.

Helen Clark will tell the annual meeting of Grey Power in Rotorua that under a Labour-led government up to 300,000 low-income New Zealanders will be eligible to have up to $500 deducted from their annual rates bill. Provision for the change is being made in this year's budget. Helen Clark said that Labour from its first year in office had progressively implemented policies to support older New Zealanders. For example: Superannuation levels were lifted in 2000 The NZ Super Fund was set up in 2001 Asset testing on older people in care begins to be phased out from 1 July Changes to subsidies for doctors visits have greatly reduced doctors fees for superannuitants Comprehensive legislation protecting the interests of older people in retirement villages has been passed

Helen Clark said that the rates rebate scheme has existed in New Zealand since 1973 but that its effectiveness has been dramatically eroded by inflation. Use of the scheme has shrunk from 102,244 households in 1977 to 3,529 in 2004.

"A prolonged period of economic growth has significantly lifted property prices in many areas of New Zealand with a corresponding effect on the rates of many people on low and fixed incomes. This particularly affects older New Zealanders.

"From 1 July next year under Labour, the maximum rebate available under the rates rebate scheme will rise from $200 to $500. The income threshold under which people will become eligible for a full rebate is to increase from $7,400 to $20,000. The additional income allowance for dependants is also to increase from $156 to $500 per dependant.

Under these settings, up to 300,000 ratepayers could be eligible for rebates.

A single person receiving $16,645 in superannuation a year in 2006 will be eligible for a full rebate of $500 if their rates bill is over $1,000.

A superannuitant couple receiving $25, 276 in superannuation a year in 2006, will be eligible for a rebate of $234 if the rates bill for their home is $1500.

"The government's investment in this scheme will have a real and beneficial effect on the lifestyles of many older people and others on low-incomes. It will also ease pressure on councils who have struggled to accommodate the plight of low income households when setting their rates," Local Government Minister Chris Carter said.

"Older people deserve to enjoy the fruits of economic growth alongside all other New Zealanders. Under Labour, big improvements to the rates rebate are now being given priority," Senior Citizens Minister Ruth Dyson said.

While the cost of the new scheme will depend on the take up of it by eligible people, the government has budgeted $50million a year to implement the policy.

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