The National Party will commit to implementing a further Family Incomes Package in the next term of government, subject to certain fiscal conditions being met.
“Our strong economy means the Budget 2017 Family Incomes Package will provide a positive boost to after-tax family incomes on 1 April of next year,” Finance Spokesperson Steven Joyce says.
“We are committed to delivering more for New Zealand families in the next term of government, subject to maintaining our strong plan which is allowing New Zealand companies to compete and succeed on the world stage.”
“The best indications from today’s PREFU announcement is that a similar sized Family Incomes Package to the current one would be possible from 2020, unless the economy performs better than expected,” Mr Joyce says.
The first Family Incomes Package will deliver an average of $26 a week to 1.34 million working families from 1 April 2018 through a combination of tax threshold changes, increases in Working for Families tax credits, and increases in the Accommodation Supplement. The Package will also provide an additional $13 a week per couple for 750,000 superannuitants.
Mr Joyce laid out a number of key conditions to be met for a second Family Incomes Package to proceed. These are:
- Maintaining the Government’s debt targets of reducing net debt to 20 per cent of GDP by 2020 and 10-15 per cent of GDP by 2025
- Meeting the Government’s spending commitments and forecasts for building infrastructure and improving public services laid out in Budget 2017.
- Funding any Family Incomes Package from cash surpluses and not from additional borrowings
The Pre-election Fiscal Update showed that cash surpluses beyond current and future budget spending commitments would commence from the 2020 financial year.
Mr Joyce says that a second Family Incomes Package would have a similar emphasis to the first package that commences 1 April next year.
“We would want to focus particularly on lifting the incomes of low to middle income families, look to simplify further the tax and transfer system so people can more easily see the link between their work and their earnings, and continue to lift the lower tax thresholds as incomes grow,” Mr Joyce says.
“The average wage is predicted to grow from $58,900 at March 2017 to $65,700 over the next four years. It is very important that we aren’t taxing middle income earners at 30 cents in the dollar. ”
“National has shown it can lift incomes and invest in public services and infrastructure. Under our responsible programme we can continue to do both.”
Mr Joyce said that the ability to have an ongoing conversation about boosting family incomes is only possible because of New Zealand’s strong and growing economy.
“Whether it’s investing in better public services, investing in infrastructure, or boosting family incomes, every budget initiative is only possible because our small and medium-sized businesses operate in an economy that allows them to compete successfully on the world stage.
“It’s crucially important that keep encouraging them to compete and succeed and not weigh them down with poorly thought through new taxes and polices that would stall the economy and stunt growth,” Mr Joyce says.