‘Perhaps the largest middle-class support scheme in the world’ – Stuff.co.nz

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Prime Minister Jacinda Ardern addresses the Labour Party conference via Zoom on Saturday. Morgan Godfery says additional support announced at the weekend is not enough for those most in need of extra support.-

OPINION: The trouble with criticising benefit increases and additional tax credits is that, every time, you fall into the same trap: you come across as being ungrateful.

At the weekends Labour Party conference, Prime Minister Jacinda Ardern made an announcement via Zoom that the Government will lift the family tax credit by $15 for the first child and $13 for subsequent children, boost the Best Start payment from $60 to $65 per week, and implement a modest $5 increase to the orphans benefit, unsupported childs benefit, and foster care allowance.

Its obvious, but worth stating for the record, that these changes are a public good. In her first term, the prime minister set out to challenge her own Government, promising New Zealanders that this country would become the best in the world in which to raise a child.

The changes announced at the weekend, however modest, are one step towards that. In tough times, even $5 can make the difference between, say, being able to take the bus trip to the supermarket and not.

READ MORE:* Government announces new boosts for family tax credit and newborn payments* Budget 2021: Here's what's in the Budget for households* Working for Families falls behind wage rises: Child Poverty Action Group

But this column isnt meant as a message of congratulations to the Government.

No, this is the ungrateful routine. According to the Child Poverty Action Groups (CPAGs) Susan St John, the Governments changes mean that low-income families will be only $5 better off by April next year.

Like I said, thats the difference between taking a bus trip to the supermarket and back, and not being able to do that and in the time of Covid-19 we know how important the essential shopping trip is but once youre there, that $5 wouldnt even buy a mince pack for dinner. How, then, is that $5 meant to lift thousands of children out of poverty?

The short answer is that it isnt meant to. The long answer is that it wont do so.

Even the benefit increases made in May as part of Budget 2021 are yet to come into full force. The announcement at the weekend that extra $5 and changes to Working for Families (WFF) wont come into full force until April 2022 either.

To quote CPAG again, children cannot live on promises of minor changes next year. If the Government was serious about making New Zealand the best country in the world in which to raise a child, it would implement these changes today, and then boost them again in April 2022.

Its impossible not to come across as ungrateful when you argue additional support isnt enough. But equally, its impossible for the Government not to come off as complacent when the changes its making will primarily benefit households earning moderate incomes.

That $15 boost to WFF is squarely aiming for the middle ground, because under that tax credit scheme, children whose parents receive a benefit of some kind miss out on up to $72.50 per week in support. In other words, the poorest households in New Zealand will still forgo up to $72.50 in support that other, moderate income families receive.

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Morgan Godfery: If the Government was serious about making New Zealand the best country in the world in which to raise a child, it would implement these changes today, and then boost them again in April 2022.

Thats an inequality thats impossible to justify. The poorest households that is, those on some kind of benefit are in most need of extra support, and they cannot afford to forgo whats available to people in higher income brackets.

The absence of a comprehensive capital gains tax in New Zealand means that successive governments have run perhaps the largest middle-class support scheme in the world.

We dont need another middle-class support scheme. Instead, we need that $15 boost and the $5 boost, and more to find its way to the people who need it most.

Morgan Godfery is a senior lecturer at the University of Otago and the te ao Mori editor at Metro. He is a former Parliamentary staffer for the late Labour MP Parekura Horomia.

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'Perhaps the largest middle-class support scheme in the world' - Stuff.co.nz