Tuesday, May 17, 2011

Key on Working For Families

John Key has admitted that some families will be worse off due to his cuts for Working For Families. But he tries to have it both ways as well:

Prime Minister John Key confirmed yesterday that there would be cuts to the Working for Families scheme in Thursday's Budget. He insisted many would be better off under the changes, but for the lowest-income-earners he could only guarantee increases to reflect inflation.


The cost of the $2.8 billion scheme would come down "slightly". "Overall, the emphasis of the Government is to try and reorientate more towards lower-income New Zealanders – at least that's where any kind of future gains would be. There is less higher up and, overall, I would describe the changes as modest."

This is confusing, to say the least. Cuts will be made, but some will be better off because of them. But not the poor, despite the scheme supposedly being reoriented more towards them. Does Key have any idea what his policy actually is, or is he just blowing smoke?

Meanwhile, the Herald's Simon Collins lays out the options for cutting Working For Families. He shows that there is no real way to cut the top without also cutting the bottom and the middle. And unless payments are increased for people on higher incomes - an outright regressive move - there is no way to deliver the policy Key is claiming.