Friday, May 23, 2014

Metiria Turei: Govt "punishing" newborns

On Wednesday Green's co-leader Metiria Turei questioned John Key about the extra assistance for newborns in the budget. She wanted to know why the Parental Tax Credit wasn't being extended to children of beneficiary parents. In fact she asked for it to be immediately extended and the Prime Minister said, "No". Turei has now twisted this into:

"It’s bad enough to punish an adult for not having a job but to punish a newborn baby is a step too far," Mrs Turei said.

Adults are not punished for not having a job. They are supported by the benefit system. This country is amongst the most generous in the world in its means-tested but otherwise universal  social security coverage for the unemployed.

When a child is born to someone on a benefit they receive extra weekly financial assistance. That is the Family Tax Credit. It used to be called Family Support. Back in 19931 the maximum amount for the first child was $42 and additional children received $22 (with 16-18 year-olds receiving the higher of the two payments).

According to the Reserve Bank inflation calculator

A basket of goods and services
that cost $1.00
in quarter 4 of 1993
would have cost


in quarter 1 of 2013
Total percentage change 54.8%
Number of years difference 19.25
Compound average annual rate 2.3%
Decline in purchasing power 35.4%
Index value for 1993 quarter 4 is 758.4
Index value for 2013 quarter 1 is 1174.0

OK. So if Family Support had been linked to inflation it would now be worth $64 for the first child, and $34 for additional children. In fact it is much higher.

Today it is $92 for the first, $157 for two, etc.

So newborns, regardless of their parent's source of income are well-supported by the government. They are not punished.

Metiria Turei's description of the situation of children of beneficiaries is deceitful. The Family Tax Credit was not increased in the budget because it would have been inconsistent with the philosophy of incentivising work.

1/ Social Developments, Tim Garlick, p146


Dave said...

The NZ Greens are radical feminist 1st extreme socialist 2nd and only if it doesn't interfere with those 2 ideologies are they Green 3rd.
If a child is conceived while the parents are on a benefit it is a lifestyle choice. A bad choice for the child and for society. A choice that the tax payer should not be forced to fund.

Manolo said...

That Luddite woman is mad, dangerously mad.