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Budget 2015 Explained

Posted by on in The Economy

The seventh Budget from Finance Minister, Bill English is very much a balancing act with increases in benefits for some citizens offset by the removal of incentives for others.

Family Forecast

Fresh off plenty of political discussion around Child Poverty, the Government has introduced benefit increases for families with children by $25 per week after tax, the first non-inflation adjusted increase since 1972:

  • Childcare assistance for low-income families will increase from $4 an hour to $5 an hour for up to a maximum of 50 hours of childcare a week for each child.
  • Student Allowances for families with children will increase by $25 a week.
  • Both the Working for Families (WFF) in-work tax credit and the WFF tax credit abatement rate will increase from 1 April 2016:

* Low-income working families earning $36,350 or less a year, before tax, will receive an extra $12.50 per week and some very low-income families will receive an extra $24.50.

* Working families earning more than $36,350 will receive more from WFF, but the amount is dependent on each family’s income and it won’t be more than $12.50 a week

* Families earning more than $88,000 a year will see slightly lower WFF payments, with the average reduction being around $3 a week

These increases have been tempered by part-time working beneficiaries needing to work 20 hours per week versus the 15 hours of the past. Sole parents and partners of beneficiaries are also now expected to seek at least part-time work once the youngest child turns three, as opposed to five years previously.

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I'm married to a teacher and so have been very close to what has been going on in the media as a result of Budget changes for schools.  I must say, I really feel for the schools.  As Gary Sweeney alluded to at a recent NZAIMS conference, the current issue is not about Teachers wages or contracts, it is about budget cuts affecting their ability to do the job they were charged with - teaching children.  It appears that Intermediate schools will no be doing everything they can to voice their displeasure and bring pressure to bear on the Ministry.  I believe this is a sensible approach to highlight policy decisions that will have a negative impact on what must surely be the most important thing we do as a country - the education of our future generations.

What saddens me is that there is no discussion around what other areas could be cut back.  Balancing a budget as a country is vital.  Just look at Ireland, Greece, Spain and Portugal to see what happens if you throw caution to the wind and borrow to fund a lifestyle beyond our means.  We have short patience for any one who does it personally, let alone a country that should know better.

Fine, campaign to stop the attempted $43million savings the Government are pursuing in a admirable attempt to balance the budget, but rather than whinging with your hand out, say what you are willing to give up to make it possible.  Suggest the areas that the Government could save money to offset the Educational Spending.  To the protesters, contribute more than clever banners and poorly sung Pink Floyd songs.  Start some meaningful dialogue rather than singing rhymes.  Show some of the maturity you are supposed to be passing on to the youth you are seeking to protect.

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To avoid being a hypocrite, I should say what I would do.  What about:

    • Treating prisoners in Prison as though they are there to be punished.  Drop the perks provided (under-floor heating, personal TVs, etc.) that would be denied to our Elderly in their homes

 

    • Get rid of Tertiary Institutions that teach no courses of value (and "steal" funding from those that do)

 

    • Get rid of funding for PC initiatives that bring no value other than promotion of "diversity" in society - if they were so valuable we would be doing it ourselves

 

    • Remove the option of being a beneficiary as a lifestyle choice (I have a wonderful view of the Pukekohe Courts, and I can see where your tax-payer dollar is going)



No I don't have a perfect answer, and I know there are people who would take exception to my suggestions above, but for us to be a country that is proud of the way we teach our children, we still need to balance our budget.

Till next time.

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