John Key, Bill English and Steve Joyce have delivered up a “bludger budget”, delivering more money to non-contributing members of society.
While I expected the Government to spend a small amount of money on helping low income families, never did I think they would be announcing the first real increase in benefit rates in 43 years as part of an almost $800 million child poverty package.
It will be almost impossible for Labour and Greens to credibly attack this Budget, because it looks a lot like the sort of Budget they would deliver. I’m impressed with the politics of it, but not impressed with the economics.
The main initiative is the child poverty package. The details are:
- $25 a week net benefit increase for families with children – 1st increase since 1972. An 8.3% increase in the base benefit rate for most on welfare.
- To counter against any incentive to remain on welfare due to higher benefit levels, work testing for sole parents to start when youngest child is three, down from five
- Work testing obligation increases from 15 to 20 hours a week
- 110,000 beneficiary families with 190,000 children get a net extra $23 a week
- WFF increases for working families earning under $36,350 a year by $12.50 a week, up to $24.50 a week for very low income
- Families on WFF who earn over $88,000 a year get a bit less from WFF as abatement rate increases from 21.25c to 22.5c
- WFF changes benefit 200,000 families and 380,000 children
- 4,000 very low income working families get a net extra $24.50 a week
- 50,000 low income working families get a net extra $21.50 a week
- 150,000 other families get up to $21.50 a week
- Childcare subsidies for low income families up from $4 to $5 an hour. Families eligible for up to 50 hours a week so worth up to $50 a week.
- Cost of package $790 million over four years and then $240 million a year