'Teenager tax': Kiwi families lose out under Budget, Labour claims
Six thousand Kiwi families with teenagers could be missing out on the equivalent of their children's school fees under National's Budget, Labour claims.
Finance Minister Steven Joyce on Thursday announced his first Budget, the centrepiece of which was a $2.2b Family Incomes Package which included changes to tax thresholds, Working for Families tax credits and the accommodation supplement.
- Tax thresholds change from $14,000 to $22,000 and from $48,000 to $52,000
- Those in the $22,000 bracket will get a $10.77 tax reduction a week or $560 a year, while those on $52,000 will get $20.38 or $1059 per year
- Family Tax Credit increases the maximum credit for the first child under 16 by $9 a week, and each subsequent child under 16 by between $18 and $27 a week.
The Budget splashed cash on 1.3 million Kiwi families, but Labour leader Andrew Little says there is a group of Kiwi families who'll actually be worse off.
Speaking to the AM Show on Tuesday, Mr Little says the Budget gave with one hand and took with another for 6000 families with teens between 16 and 18.
"Once the changes come in in April next year, they'll be worse off than they are now. [Families will] get a bit of tax money extra but they lose a lot more in terms of Working For Families so they'll be worse off in net terms.
He estimated for that group it would mean $700 a year less.
"That's some school fees, a couple of school trips perhaps, those sorts of things that make a difference when you've got teenagers and trying to get them through their last years of school."
The party has already picked another hole in the tax plan, saying one-child families will get less than childless families.
The tax changes are also skewed toward richer New Zealanders - those who don't need the money, Mr Little says.
"Bill English and I don't need another $20 a week in the hand. That's money across top income earners that ought to be going into our schools, getting people in homes, getting the 90,000 young people not in work a job, I'd rather see that money there."
Mr Little says that shows the Government had put the plan together in a hurry.
"This is a government which after nine years has suddenly realised there's a whole bunch of people whose incomes haven't kept up with the real cost of living, whose accommodation costs have gone through the roof and they better do something about it, but having cobbled it together in a hurry now all these cracks and gaps are showing up."
Labour broadly agrees with the Government's Working For Families and the Accommodation Supplement, but is now looking to put together its own alternative tax package which it expects to unveil in the next few weeks.