It is clear that Labour’s new baby bonus in its revised Families Package is a rushed addition to a spaghetti of entitlements that will only confuse families, National Party Finance Spokesman Steven Joyce says.

“As Parliament debates this new programme under urgency it is apparent that having yet another entitlement for families will result in families facing high effective marginal tax rates and confusion as to how different entitlements interact with each other,” Mr Joyce says.

“This is one of the difficulties of rushing through this sort of legislation under urgency. And that’s ironic given that the House has been marking time over the last several weeks before this bill has finally come before it.”

Mr Joyce says that the National Opposition has put forward a number of other changes to improve the legislation and the $1.1 billion Best Start proposal. These included proposals to:

  • Incorporate the baby bonus into the existing Working for Families Tax Credit system to reduce high effective marginal tax rates and target it to lower income families
  • Allow parents to receive tax credits for an extra month following a death of their child
  • Ensure children receive their immunisations and Well Child checks

“During the debate National is also proposing to keep modest tax cuts for low-income earners in line with Green Party policy, but indications are the Government will vote against these demonstrating that there are no circumstances under which the Government would let workers keep more of their own money.

“When Officials warn about high effective marginal tax rates, possibly in excess of 100 per cent, then it is crucial that these proposals are fully examined and considered.”

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