No more scrambles, it's time to save - Joyce

If National win this year's election, don't expect Steven Joyce to keep throwing out tax cuts and supplements like they're candy.

The Finance Minister told The Nation on Saturday after next year's lolly scramble, it's back to preparing for the next rainy day.

"We literally have no more money," he told host Lisa Owen, defending deliberate omissions in the Budget's otherwise scattergun approach.

 "Yes, we've got the surpluses, but out of your surpluses once you've done it and made your spending decisions and taken the costs out, the rest is all allocated for infrastructure. There's nothing left after that."

Critics have pointed out while the Government has made much of the Budget's boost for those on low-incomes, some groups that fall into that category have missed out: low-paid workers in Housing New Zealand accommodation, for example, and people without children.

Mr Joyce is making no apologies.

"[Housing NZ tenants] have rent capped at their level of income, so they are already looked after... Everybody could make an argument for more, but in the context of the resources we have and our declared focus - low-income families with young children that are struggling to get ahead, and to make sure people with high housing costs are looked after - I think we are looking out for people."

Child Poverty Action Group (CPAG) said the boosts to Working for Families (WFF) do little to help many of the country's poorest children, who are living in beneficiary families. This is because the boosts were made to the Family Tax Credit, with no changes to the In-Work Tax Credit, which beneficiary families don't get - and can be as high as $117 a week.

Mr Joyce says WFF family "tax credits go to everybody with children, whether they're employed or unemployed".

"Those family tax credits for children are applied at the same rate, on the same basis, with the same income and the same thresholds as anybody else.

"It applies to everybody, irrespective of their source of income… They are being treated fairly."

He didn't mention the In-Work Tax Credit part of WFF, which CPAG has been campaigning on since April last year.

Over the threshold

The changes to the tax thresholds have also been criticised as delivering more cash in the hand to high-income earners than low, but Mr Joyce says there's no other way to adjust tax thresholds so middle-income earners don't end up paying the highest tax rate.

He said the median income is $49,000 - which is above the current $48,000 threshold where the 30 percent tax rate kicks in; and the average income is $58,000 - well on its way to the top tax rate of $70,000.

"You can't change the thresholds without changing them for everybody," he told The Nation.

As for the $1000 windfall he's delivered himself in the changes to the tax thresholds, Mr Joyce says he's not sure what he'll do with it.

"I haven't considered that, and it's the least of my considerations."

Newshub.

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