By Bernard Hickey
Labour Leader David Cunliffe has unveiled an election year proposal for more state-funded support for young families in his State of the Nation address in Auckland. Labour estimated the measures would cost NZ$566 million a year by 2020/21.
Cunliffe announced 59,000 families with new borns would receive NZ$60 per week from the Government through to the child's first birthday, while that grant would continue until the child turns three for those on "modest and middle incomes."
A policy document later detailed how the payment would be universal for all families earning up to NZ$150,000 in the first year, covering almost 95% of children under one.
The second and third year payment would go to around 63,000 families, covering 56% of all one and two year olds. It starts reducing for the second and third year for families with incomes over NZ$50,000.
The 'Best Start' payment would replace the existing Parent Tax credit, saving NZ$15 million. Best Start would begin for children born after April 1, 2016 and the cost would ramp up to a peak of NZ$281 million per year by 2019/20
A Labour-led Government would also expand free early childhood education to 25 hours a week from 20 hours a week at a cost of up to NZ$63 million, and paid parental leave would be extended from 14 to 26 weeks, at a cost of NZ$125 million.
“Our Best Start package will focus on the first five years of a child’s life and help families struggling to meet the rising costs of living," Cunliffe said.
Cunliffe announced last week Labour would drop planned exemptions for fruit and vegetables from GST and a tax exemption for the first NZ$5,000 of income. That would save it NZ$1.5 billion a year.
“Sixty dollars will make a real difference to the lives of struggling parents. For example, it will pay for a weekly supply of nappies and baby food," he said.
“There will also be free antenatal classes for all first time mothers and early home visits."
Cunliffe said the Best Start payment was in line with similar schemes in other OECD countries.
“These are tough times for New Zealand families. This package is a first step in Labour's overall programme of reform which includes education, health, housing, and economic development," Cunliffe said.
“With the best start in life, all our kids will do better in school, achieve more and contribute to our country's future," he said.
Political reaction
National's Economic Development Spokesman Steven Joyce described the plan as a bribe.
“Once again, the moment we get a lift in the economy, they want to start bribing people with massive extra spending," Joyce said.
"Mr Cunliffe has to come clean with New Zealanders on where the money is coming from. Is it even more taxes, more borrowing and much higher interest rates; or is he getting out Russel Norman’s printing presses?"
United Future leader Peter Dunne described the plan as a 'crass bribe'.
He said he supported the extension of paid parental levave to 26 weeks, although United Future wanted to extend it to 12 months.
Taxpayers Union Executive Director Jordan Williams described the plan as 'Middle Class Welfare designed to grow votes.
(Updated with more detail, reaction)
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