want a pay increase - have more kids

The Government leaks more news of the budget to the Herald. What they wrote is along the lines of what I was going to post last night.

Have more kids and get a bigger mortgage and you could be in with income assistance, is the story. But don't expect much before April 1 next year (now that the date has finally been leaked). However what is needed is not just a lift in the accommodation supplement, but for more people to be entitled to it. You can't benefit from an increase of something you are not entitled to. Also, people are missing out on tax credits not because they are not entitled to them, but because they don’t know about them, according to the Government. Some people are missing on them because the income thresholds are not high enough. That's not likely to change in the budget. But the Government will be telling people what they are entitled to. I thought that was what we paid IRD to do.

Rodney Hide is disappointed that there is not a tax cut for the rich. He doesn't mention that having kids is more of a measure of income support than salary is, and the more kids you have the more support you should have. He`d rather you get tax relief if you are a high income earner. That would mean that high income "double income no kids" families would be doubly better off than those who do not have kids in terms of net income.

Perhaps it's something to do with his assertion that those who earn $50,000 work twice as hard at those who get $25000. That’s crap. What Hide meant was that the family earning $25,000 has to work double the hours on their wage to get to $50,000 - they would not get double the net income, but they may be entitled to more income support. So why didn`t he say that? Doesn't he want to admit that the people who are needy - and therefore deserving are the ones with kids, not the ones overtaxed. The ones who are overtaxed and struggling are struggling because they have more than one person to support - like lots of kids, in some cases.

In Rodney's example, both Auckland families pay $300 a week in rent. Family A earns $481 a week. Family B earns $962 week. Family B earns too much to get income support but not enough to be comfortable - a bit like a family of three earning $35,000 who don’t pay $300 a week in rent, they may pay $160.00 a week in rent. Now Rodney would never have used that $35,000 example in his question to Cullen. They don’t have enough kids or pay enough accommodation costs - they probably can't afford to. Except family B is earning $20,000 more than the family getting $35,000. Both on the same tax rate.

How many families getting $481 a week pay $300 a week in rent, for starters? Of course their income needs to be topped up, by according to Hide, $128 a week. Its actually more than that if you add the DWI accomodation supplement, and if they have another child that’s a further $300 parental tax credit.

However tomorrows budget should supposedly see a larger gap between welfare and work - from April 1 next year at the earliest. The biggest beneficaries will be sole parents who should see some childcare relief. Or will that be sole parents on a benefit who want to move into work but are prevented from doing so due to childcare costs.