23 August 2005

Child poverty is the price for National's tax cuts

National's tax package would lead to an 18 percent increase in child poverty by 2007, Social Development and Employment Minister Steve Maharey said today.

"In its most cynical and mean-spirited policy to date National has announced it will help pay for its tax cuts by cancelling the $10 a week per child Family Support increase scheduled for April 2007," Steve Maharey said.

"The impact of this change would cut deep into the pockets of low income families. The incomes of 125,000 beneficiary families would be reduced by an average of $20 a week, pushing thousands of children below the poverty line. A family with three children would get $30 less every week.

"As the incomes of New Zealand's poorest families were reduced, the top 3 percent of earners – includng Don Brash and John Key – would enjoy an increase of $92 more a week.

"National is pulling the rug out from under the poorest families to feather the nests of the most wealthy New Zealanders."

Steve Maharey said working families on low incomes would also be worse off from this policy.

"A two-child family on $25,000 would lose $20 a week in family tax relief and gain only $8 a week in tax reductions. The bottom two-thirds of taxpayers would get less than $10 a week.

"It is now clear why Don Brash and his welfare spokeswoman Judith Collins have both refused to guarantee that child poverty levels would not rise under National."

When asked by Sean Plunket to guarantee his tax cuts would not increase poverty levels, Don Brash said 'look there's a cycle of these things, they go up and down. I can't promise anything in that area.'

Judith Collins later told the same programme 'we can't guarantee anything in terms of getting kids out of poverty'.

"They weren't willing to promise anything because they knew that their tax policy would have a direct negative impact on children in the lowest income families.

"And to top it off they want to scrap the government's annual Social Report because they know it is the only way to measure the negative impacts of their policies."

Steve Maharey said Labour was committed to eliminating child poverty in New Zealand.

"This government has made major investments to rebuild social services and reduce poverty rates. In just 3 years to 2004, 61,000 children were lifted above the poverty line. We are committed to ensuring these rates continue to fall.

"By 2007 Working for Families is set to reduce child poverty by 30 percent. By 2007 National would be well on the way towards reversing that progress."

ENDS

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