Budget 2004

Forecasts for Year to June 2005

Where the Money Goes   

($billion)

Welfare benefits   

9.79

Health   

8.90

Education   

8.01

NZ Super   

6.23

Finance costs   

2.25

Law & order   

1.78

Core services   

1.78

Defence   

1.34

Transport & communications   

1.34

Other   

3.12

Where the Money Comes From   

($billion)

Individual tax   

21.03

Company tax   

7.82

GST   

10.27

Other indirect tax   

4.40

Other income tax   

1.47

Money from investments   

2.45

Fees, fines   

0.49

Other   

0.98

ACC

People with injuries will have cheaper treatment as a result of an increase to the subsidies ACC pays health professionals. The increased subsidies are part of a $75 million package which, over the next 4 years, will boost ACC contributions towards injury treatment. The package also includes funding for changes to medical misadventure provisions announced earlier this year. A total of $21 million, over 4 years, will be invested in subsidies to medical practitioners, another $21 million for dental treatment, and $11 million for radiology services. Another $19 million will fund the implementation of changes, announced in March, to medical misadventure provisions.

Biosecurity

$46.5 million in new funding, over 4years, to strengthen NZ's Biosecurity. This includes:

  • $19.5 million, over 4 years, to improve marine biosecurity: $4 million next financial year rising to around $5.2 million in subsequent years;
  • another $1 million a year to the Protect NZ programme, which encourages NZers to help keep the biosecurity system vigilant;
  • another $7.8 million, over 4 years, for monitoring to ensure decisions on border management remain consistent and cost effective;
  • the national saltmarsh mosquito surveillance programme gets $1.6 million more this financial year followed by a total of $6.3 million over the next 4 years;
  • $404,000 this financial year and $405,000 in out years to fund a foot and mouth disease vaccine bank; and
  • $400,000 to ensure conservation biosecurity is maintained.

Broadcasting

A $20.6 million package (all figures over 4 years unless otherwise stated) includes:

  • NZ on Air gets $12 million more to maintain local television programming hours;
  • $4.7 million more is going to Radio NZ to enable it to: enhance its news, current affairs and features programming; develop the RNZ website to provide audio on demand; carry out more in-depth audience research; and promote National Radio on FM;
  • Radio NZ International receives $3.9 million, over 3 years starting in 2005/06, to buy and operate a new transmitter; and
  • Television NZ receives increased funding next year to put in place its charter, as part of decisions announced in Budget 2003 (direct funding for charter programming rises from $15 million this financial year to $16 million in 2004/05 and $17 million annually from 2005/06 onwards).

Child, Youth and Family Services (CYF)

CYF received the biggest baseline funding boost ($61 million this year, $66 million the year after) of any government department in the Budget. The extra money will boost total spending in 2004/05 to $506 million. CYF allocates more than half of its total budget to care and protection services - with $270 million set aside for that purpose in this financial year.

Culture & Heritage

  • $12.6 million over the next 3 years will go on three memorial parks: a National Memorial Park in Wellington to honour those who have served NZ in war, the NZ Memorial at Hyde Park in London, and helping to upgrade facilities at Gallipoli for next year's 90th anniversary of the landings;
  • $10 million per year for the Film Commission and for the administration of the Large Budget Screen Production Grant (this funding was announced last year);
  • $3 million per year to NZ on Air to fund television programmes;
  • $1.5 million to Creative NZ, and similar amounts in subsequent years, to "enhance the leadership role of major performing arts organisations";
  • $1.868 million to Te Papa as a contribution to the refurbishment of its Tory St storage space; and
  • an additional $1.52 million, over 4 years, for the Film Archive for restoration, preservation and presentation services.

Customs

Customs will get $5 million more this year. The budget package includes a new Passenger Analysis Unit (PAU) that will enable Customs to identify people of potential interest based on a variety of factors that could indicate risks to NZ, such as drug smuggling. Also, Customs will increase its airport and marine staff by around 25 percent.

Defence

Defence gets $20 million a year more to increase regular force pay and $16 million a year to develop and maintain effective manning levels in the Air Force.

Economic Development

Attracting overseas investment is seen as being crucial to NZ. Specific Budget initiatives include:

  • an additional $26.5 million, over the next 4 years, goes to Investment NZ to further bolster the agency's efforts to attract new overseas investment;
  • the Strategic Investment Fund (SIF) is to receive additional operating funding of $4.025 million a year starting in the 2004/05 financial year (SIF's main purposes are to attract investment, by contributing part of the costs associated with establishing the feasibility of an investment, and to facilitate investments);
  • a new fund to help businesses take advantage of market opportunities and to develop a presence in global markets (the Market Development Assistance Scheme). Funding of $7.5 million for this year and the next 2 years, rising to $12.5 million each year from 2007/08 onwards;
  • up to $2 million per year for the Brand NZ programme; and
  • up to $10 million a year extra to NZ Trade and Enterprise for the next 3 financial years, rising to $12 million a year in 2007/08 and subsequent years; to strengthen NZ Trade and Enterprise's global network.

Negotiating Trade Agreements. Extra funding to help negotiate trade agreements with other governments ($1.7 million this year and $0.8 million next year).

Aichi Expo. $3.5 million to help NZ participate in next year's Expo (NZ is investing $8.5 million in its Expo Pavilion).

Tourism Infrastructure for Small Communities. An $11 million initiative to help small communities fund water and sewerage infrastructure was announced just before the Budget.

Education

An additional $2 billion will be spent in education over the next 4 years, bringing the total annual operating expenditure to $9.2 billion by 2007/08. The main components comprise:

Early Childhood Education. New funding of $365 million, over the next 4 years, is going into in early childhood education, bringing total annual funding by 2007/08 to around $660 million. From the middle of 2007, three- and four-year old children will be entitled to 20 hours free attendance per week at a community-based early childhood education service. Rural early childhood education services will, for the first time, have a guaranteed minimum amount of funding, of either $15,000 or $20,000 annually depending on size, to support sustainable services in the most isolated areas.

There is also going to be more help with childcare costs through the "Working for Families" package (see elsewhere in this Budget special). As part of Working for Families, childcare subsidies provided through Work and Income are being increased to make early childhood education and care more affordable. From October 2004 more families will qualify for a subsidy and subsidy rates will increase. The package (all figures are for 4 years) includes:

  • an extra $307 million to put in place the early childhood education strategic plan which is aimed at lifting quality of education and increasing participation;
  • an extra $22 million for an inflation-adjusted increase to early childhood education funding rates to ensure funding keeps pace with cost increases until the new funding system is in place;
  • an extra $13 million for programmes to help teachers better assess children's learning ability and needs, and to implement professional standards in kindergartens; and
  • an extra $23 million to increase specialist support for special needs children in the early years, and to provide better information and support for specialists, teachers and parents.

Student Allowances. A $110 million package for students includes an expansion of the student allowances scheme. There is to be an increase in eligibility for student allowances. By increasing the lower (from $28,080 to $33,696) and upper parental income thresholds (from $50,572 to $62,148), nearly 12,000 students who currently receive a partial allowance will now be eligible for a full allowance and a further 28,000 students will receive a partial (or abated) allowance. Also, around 3,000 students each year who currently get a partial allowance will get a higher allowance. And from now on, parental income thresholds will be annually adjusted for inflation.

There's also an extension of the Student Loan Scheme's coverage:

  • from 1 January 2005, students studying between 0.25 and 0.3 of a full time course load will be able to get a student loan for tuition fees if their course meets certain conditions and they are in employment or studying for a qualification that will lead to employment; and
  • "no asset procedure" debtors will in future be able to qualify for a student loan.

New funding of $2.4 million is being invested in Student Job Search (SJS) to support the organisation to help students find employment (moving it away from short, low-skill job placements to a focus on assisting students into skilled placements of longer duration). Further information can be found in the Guide to the Student Support Changes in Budget 2004 which is available on the Ministry of Education website at www.minedu.govt.nz.

"Enhancing the Tertiary Sector". $149 million goes towards "greater levels of excellence in the tertiary education sector and to connect teaching, training and research with NZ's economic and social needs". Several of the moves, for example, are aimed at better anticipating and meeting the skill needs of business (funding over 4 years):

  • $25.3 million to introduce a single funding rate of $3,200 for all industry training organisations over the period 2005 to 2007;
  • a $21.5 million fund for polytechnics to develop industry engagement plans setting out how they intend to meet the needs of business and industry stakeholders; and
  • $1.1 million to expand the 3-way Skill NZ campaign partnership with Business NZ and the Council of Trade Unions.

Funding of $1.5 million goes to build greater tertiary education sector capability. Includes:

  • a national conference early next year for managers, council members and stakeholders to showcase NZ and international best practice examples of how the sector can and is evolving;
  • an expanded induction and training seminar programme for public tertiary institution council members and senior managers; and
  • the second phase of a strategic review and development of a plan for the tertiary education workforce.

Fisheries

$4.3million, over the next 4 years, provides for a nationwide radio communications network for fisheries compliance officers.

Health

An extra $550 million will go into health in 2005, rising to $571 million in 2006 and $609 million in 2007. Primary health gets the fastest increase, from $48 million in 2002/03 to $264 million this year, to $280 million the following year. Specifics include:

  • $802 million during 4 years to upgrade public hospitals, with the Wairarapa and Capital and Coast district health boards set to benefit. Money has been put aside for new hospitals in Horowhenua and Tauranga;
  • an extra $250 million, during 4 years, for mental health services;
  • from 1 July, people aged 65-plus and enrolled in primary health organisations will pay $3 for prescriptions;
  • twice as many hip and knee replacement operations will be performed in the next 4 years to plug a gap in orthopaedic services;
  • $20.5 million during 4 years for suicide prevention and new drug addiction programmes (see below); and
  • a financial boost for medical research - $48 million will be spent in the coming year and this will rise by $22 million during the next 4 years.

Health Snapshot: Suicide Prevention and Drug Programmes

$5.52 million, over the next 4 financial years, for new measures aimed at all age groups and building on the NZ Youth Suicide Prevention Strategy, including:

  • improving assessment and management of people at risk of suicide: $700,000 a year for the next 3 years, $250,000 thereafter;
  • planning and designing a national initiative to combat depression: $300,000 in 2004/05;
  • expanding the Suicide Prevention Information NZ (SPINZ) project: $2.8 million over 4 years; and
  • reprinting suicide prevention guidelines for schools: $60,000 over the next 2 years.

The drug-related health initiatives comprise:

  • $1.4 million this year and $1.06 million for each of the next 3 years, for agencies working with young people in the central North Island;
  • $135,000 for prevention training to allow those working with patients to better identify signs of potential problems and risky behaviour;
  • $191,000 for each of the next 2 years and $157,000 for the third year, to place alcohol and drug clinicians at court;
  • $344,000 this year and $194,000 this year to evaluate the 15 recently established community action on youth and drug sites;
  • $3.06 million to discretionary fund for inter-departmental drug policy projects;
  • $140,000 for each of the next 4 years, for a ministerial committee on drug policy and for the national drug policy;
  • $1 million per year for the next 4 years, for needle and syringe exchange programmes; and
  • $300,000 this year and $283,000 for the next 3 years, in extra funding for the Drugs Foundation.

High-Country Tenure Review

$80 million, over 4 years, will go towards the administration of the tenure review process ($32 million), and the purchase of South Island high country land ($48 million) for conservation.

Housing

$128.9 million (including $126 million capital) for housing acquisition by Housing NZ Corporation (HNZC) over the next 3 years. This takes the total for next year to $232 million and will allow the Corporation to increase its housing stock by 1,054 homes and to make improvements to a further 856. Further funding of $4.8 million is also provided in 2004/05 to continue to repair substandard housing in Northland, the East Coast and the Eastern Bay of Plenty.

Funding of $6.2 million, over 4 years, will support better regulation and protection for tenants and landlords. Details include:

  • the Ministry of Housing gets $3.4 million to extend the Residential Tenancies Act to better inform landlords and tenants about trends in the rental market;
  • an on-line database of Tenancy Tribunal decisions will be established to allow easy access to information about past tenancy disputes (at a cost of $1.3 million including $310,000 capital in 2005/06);
  • $700,000 will be spent on a review of the Residential Tenancies Act, which defines the rights and obligations of landlords and tenants and sets out disputes resolution processes.

Immigration

$62 million, over the next 4 years, will go on a series of measures to help migrants, refugees and their families make a greater contribution to the economy and society. Specifics include (all figures are for 4 years):

  • $4 million to Career Services, to provide specialist employment advice, information and guidance to migrants;
  • $1.6 million for a pilot for a programme targeting adults with professional qualifications who need to improve their English skills;
  • $37.9 million for schools to provide more English language teaching to children from a non-English speaking background;
  • increased resources for the Refugee and Migrant Service ($6 million);
  • $11.7 million for setting up a network of migrant resource services; and
  • $1 million for a national secretariat, based in the Department of Labour, to support communication on migrant and refugee settlement issues between community groups, other organisations, and central and local government.

Intelligence Services

The Security Intelligence Service (SIS) budget goes up to $22 million (up $5 million), and the Government Communications Security Bureau (which monitors communications systems) has been given an increase of $8.3 million, taking its budget to $39.2 million.

Budget Snapshot: More Support for Seasonal Workers

$6.3 million, over 4 years, will go on changing benefit stand-down rules to improve incentives for people on benefit to undertake seasonal work and other short-term employment. From 1 May 2005 benefit applicants will be able to choose an income assessment period of either 26 or 52 weeks for the assessment of the initial stand-down, so they can choose which is the most advantageous. This change recognises that some seasonal workers and others who have obtained short-term employment face financial stress because of the way the initial stand-down is assessed. The stand-down change complements a number of other initiatives that Ministry of Social Development (MSD) is undertaking. Specifically:

  • encouraging job seekers to adopt seasonal work as a sustainable employment option, with associated benefits to major NZ industries that employ seasonal workers;
  • examining and improving MSD operational processes and policies for seasonal workers to facilitate seasonal work as a sustainable employment option;
  • looking at innovative ways to promote seasonal work as a sustainable employment option; and
  • working with key employer and industry groups to encourage them to address issues beyond the Ministry's control including pay, conditions, accommodation, transport and occupational health and safety issues.

Justice

$1 billion is committed to the justice system over the next 4 years. This includes $404 million to cover decisions taken since last year's Budget, and an additional $596 million for new initiatives and infrastructural projects, some of which have been announced in recent weeks. There is an increase of $34.3 million, over 4 years, for extra fines collection staff and resources.

There is also more than $200 million for the Department of Corrections, including a capital injection for the building of four new prisons. The prisons, in total, will cost $610 million. The Department also gets a baseline funding boost of $30 million in 2004/05, rising to $40 million a year in 2006/07 (for staff training, property maintenance and prison health services). NZ Prisoner's Aid and Rehabilitation Society and organisations doing related work were allocated an extra $450,000.

Already-announced initiatives include $39 million, over 4 years, on tackling the methamphetamine trade and organised crime. Specifics include:

  • a third 12-person Police "clan lab" team, four chemical intelligence analysts, and the creation of a national supervisor position to co-ordinate Police meth operations;
  • increased meth analysis work by Environmental Science and Research (ESR);
  • funding for more staff (from 13 to 31) at the National Interception Centre (NIC), which undertakes electronic intelligence aimed at organised crime and gang involvement in the drug trade;
  • a third six-person surveillance team plus additional technical support for the Auckland Metro Crimes Services group, which focuses on on-the-ground surveillance of gangs and trans-national organised crime; and
  • three research projects into what underlies the phenomenon of meth abuse, and possible solutions.

Increased pressure on the court system will be eased by a $73 million injection, including $30 million, over 4 years, into running digital audio technology (DAT) to improve evidence recording and transcription in the High and District Courts. Also:

  • $1.56 million for a 2-year pilot using mediators rather than judges in four Family Courts to work with families involved in custody, access or guardianship proceedings; and
  • $10 million capital injection over 2 years, and $7.9 million operating funding over 4 years, to replace old computers.

$9 million, over the next 4 years, will go on to increasing jurors' fees, plus the car parking and childcare allowances. The increases will see jurors paid $31 (up from $25) for up to three hours; $62 ($50) for a full day; $89 ($70) if attending later than 6pm, and $127 ($100) after 9pm. On the sixth day, rates increase to $40 for up to three hours (previously $35), $80 for a full day ($70), $114 after 6pm ($100) and $163 after 9pm ($140). And, a new courthouse for Queenstown is to be built ($3.5 million).

Labour

$30 million, over the next 4 years, to help businesses run more smoothly and productively. Initiatives are:

  • $11.8 million to fund expert teams to work directly with small and medium enterprises on how to manage workplace issues;
  • $7.6 million for a workplace support contact centre to provide rapid access to workplace information and advice;
  • $3.1 million to fund the National Occupational Health and Safety Advisory Committee's work programme and research aimed at preventing work-related injuries and illnesses; and
  • $8.2 million for a linked data collection system with Statistics NZ to provide better statistical data on business growth and productivity to assist policy and business planning.

Lake Taupo Project

The Government will contribute towards a programme to improve Lake Taupo's threatened water quality. In the first 4 years of the 15-year programme, the Government will contribute $7.5 million. The total cost of the programme is estimated to be $81.5 million - the Government will contribute $36.7 million, over 15 years, with Environment Waikato and Taupo District Council funding the remainder.

Maori

$14 million a year goes to Whanau Development. This money will support locally based whanau initiatives, with a focus on strengthening and supporting whänau-based action and research programmes, sporting and cultural activities, and enterprise development.

$10 million of operational funding, over the next 4 years, to support and expand the successful Maori Business Facilitation Service (MBFS) to advise and mentor Maori in business. A new area of support is assistance with the Hui Taumata, a major summit focused on expanding Maori economic pathways and accelerating Maori economic development. This hui, scheduled for later this year, will be tasked with setting 20-year goals for Maori development. Additional resources will also be allocated to expand the current Maori Regional Tourism Programme.

Budget Snapshot: Getting Young People into Education, Training or Work

$56.9 million is being spent, over 4 years, on a package of initiatives to assist young people moving from school to further education, training or work. They are:

Designing Careers. A two-year pilot to improve career planning in schools. Individual Learning and Career Plans will be piloted in 75 selected schools to help students create a "coherent and flexible programme of learning that leads to higher achievement and successful transitions from school into work, education or training". The plans will also help keep track of students' learning and career development. Every student in Year 10 on the pilot will prepare an individual learning and career plan with assistance from parents and caregivers, the careers advisor and their form teacher. The pilots will extend to those students in Years 11, 12 and 13 who have been identified as at risk of not making a successful transition from school.

More STAR Support. STAR assists senior secondary school students to find suitable work or further study at secondary or tertiary level by enabling schools to: facilitate smooth progress and access from schooling to employment, including work-based learning; or tertiary type study or training; and improve retention in senior secondary schooling. Five permanent school support positions at colleges of education throughout NZ and a position in the Ministry of Education will be created to co-ordinate the implementation and evaluation of senior secondary transition education programmes. Best practice materials will be developed in different formats, such as printed material or videos, giving schools accessible resources that can be used to improve the effectiveness of their STAR programmes.

New Youth Transitions Service. The new service is for young people who are at risk of not finding education, training or work after leaving school. The transitions service will be delivered by a lead provider in each area who will:

  • engage with school leavers and young people who are not in work, education or training by developing informed consent referral processes with the help of schools, families/whanau, Police, Child, Youth and Family, health, education and training providers;
  • provide customised support and career planning for young people at risk of prolonged disengagement from work, training or education;
  • work with local employers, training and education providers to identify and support the development of appropriate opportunities for young people; and
  • help integrate youth services in each area.

The Transition Service will be progressively rolled-out, with five sites established early next year, 10 sites in 2006, and 14 sites in 2007. Priority will be given to those regions that have both a high number of disengaged young people and socio-economic deprivation as well as the community capability to deliver the service.

Enhancing "Gateway". From 2005, Gateway opportunities will be expanded to decile 6 schools. Gateway opportunities will be available to all decile 1-6 schools in 2008. Gateway is a programme that integrates structured workplace learning with senior students' classroom-based learning. Students achieve credits in the workplace, which they can use towards qualifications on the National Qualifications Framework.

Expanding Modern Apprenticeships. The programme expands to 8,000 Modern Apprentices by June 2006. Modern Apprenticeships is designed to increase the participation of young people in formal industry training and to reinforce the concept of apprenticeships pathways to employers and young people.

Training Incentive Allowance Pilot for Teenage Parents. A pilot programme is being established to work out if the Training Incentive Allowance could be used to encourage teenage parents to remain in, or return to education. Under the three-year pilot, 200 teenage parents will be provided with access to the Training Incentive Allowance to help overcome financial barriers to education including childcare, transport and course-related costs.

International Education

$40 million package to lift our overseas profile, and strengthen international education sector through, for example:

  • up to four offshore education counsellor positions in key overseas markets;
  • looking at ways to strengthen quality by identifying the best ways to improve achievement of international students;
  • from next year about 33 scholarships will be available annually for international students at post-graduate level, and there will be 33 scholarships at the undergraduate level (by 2007 it's planned to have 200 of these scholarships);
  • "Study Abroad" awards - to increase opportunities for talented NZ students, teachers and researchers to undertake overseas study. By 2007 there will be at least 100 awards each year at secondary and 100 at tertiary level. The first 33 tertiary awards will be available next year, while the secondary awards will be introduced progressively from the beginning of 2006;
  • funding to help NZ providers research risk factors, build capability, access seed funding for new products and partnerships, and undertake feasibility studies on options like satellite campuses, e-learning, and off shore courses; and
  • generic promotion and marketing - to help promote NZ education internationally.

Overseas Aid

This year sees a $15 million increase, to $260 million, in NZ's international aid budget. Includes:

  • Pacific assistance is up 13 percent to $122 million; including $16 million to help rebuild the Solomon Islands;
  • Vanuatu's assistance goes up to $6.36 million, for new rural development, law and justice initiatives and education;
  • support for development Non Governmental Organisations goes up by $1 million to $11 million;
  • NZAID's Trade and Development programme to reduce poverty will grow by $2.2 million; and
  • there's more funding for climate change initiatives to meet our international obligations.

Research, Science, Technology

$212 million of new funding in research, science and technology (RS&T) over the next 4 years. Includes:

  • Research for Industry funding, which supports strategic research underpinning the development of new products, processes and services, is increasing by $75 million over 4 years. New funding for this year is $17.3 million (up 9 percent) raising the total to $205 million. New funding for each of the following 3 years is $19.2 million a year.
  • Funding for the successful Research Consortia programme is being increased by more than $17 million over 4 years, and by $2.5 million to $17 million next year. This money supports research projects developed by science providers and users working in partnership, with matching investment from the private sector.
  • The new International Investment Opportunities Fund will be open to researchers who have the opportunity to participate in international research collaborations. It will help NZ research organisations compete in the global market for funding for scientific projects and could help overseas researchers to relocate here. The fund will have $3 million available in 2004/05, increasing to $4 million in 2005/06 and $5 million from 2006/07 onwards.
  • More stable long-term funding for Crown Research Institutes (CRIs) comes through an increase in Organisational Capability funding, which will increase by $4 million in 2004/05 to $32 million, and by up to $10 million in reprioritised funding in 2005/06, conditional on further policy development. This money will help CRIs maintain strategically important research capabilities, including by the recruitment or retention of top researchers.
  • The New Economy Research Fund increases by $21 million over 4 years. The fund supports new areas of research with the potential to create new types of business for NZ. Funding will total $70 million for 2004/05;
  • Environmental Research funding increases by $21 million over 4 years, with an increase of $6 million in 2004/05 bringing the total for the year to $94 million. Priorities for the new funding include research into sustainable development opportunities, updating nationally important collections and databases, and ecosystems research;
  • Funding for Health Research increases by $22 million over 4 years, with new funding of $5.5 million a year. Total funding for this year is $48 million; and
  • The Technology for Industry Fellowships programme, which enables students and experienced researchers to complete R&D projects in companies, is expanding with $10 million of new funding over the next 4 years.

State Services

An extra $14.8 million, over the next 4 years, goes to further develop a secure system for people wanting to use government services over the Internet.

Statistics NZ

$70 million, over 4 years, will be spent on Statistics NZ. Initiatives include:

  • $20 million to improve census data collection by boosting funding for census enumerators and use of the Internet;
  • $22.5 million to create a stronger foundation for social policy spending and evaluation;
  • $14 million to strengthen official statistics by improving co-ordination, access and use of statistics;
  • $10.5 million to develop Linked Employer-Employee Data;
  • $2.7 million additional funding to secure new office accommodation for Statistics NZ in Wellington; and
  • $1 million to collect better information on the economic contribution of volunteering and non-profit activities.

Super Scheme

This Budget commits $2.1 billion to the NZ Superannuation Fund. As at 30 June 2005, the Fund will contain $6.3 billion. By 30 June 2008, this is forecast to have increased to $15.5 billion.

"Working for Families"

Touted as one of the centerpieces of this year's Budget, the Working for Families package is said to shift the focus of NZ's social assistance system from passive welfare entitlements to active support to move into employment. Central to the package is the new In-Work payment that will be available to over 100,000 low-and-middle income working families. Although beneficiary families will see their incomes rise, those who move into, or remain in, the workforce will receive the most gains from the changes.

The package also makes changes to family income assistance, to childcare assistance and to accommodation assistance. Working for Families will deliver an average increase of around $100 a week in direct income assistance to families with children in the $25,000 to $45,000 band by 2007. Many families with higher earnings will also benefit from this package.

The package steps up in stages over the next 4 years:

  • From October 2004 pre-school and after-school childcare subsidies increase and are extended to families on higher incomes. Beneficiaries will no longer have their Accommodation Supplement reduced if they earn additional income and working families can earn more before their Accommodation Supplement is reduced.
  • From 1 December 2004 many people receiving the Invalid's Benefit will be able to trial working more than 15 hours per week without losing their benefit eligibility to see if they can sustain employment.
  • From 1 April 2005 Family Support rates increase. Higher maximum rates apply to the Accommodation Supplement to help people living in places that have high accommodation costs, particularly in Auckland. The child component of benefits and student allowances move into Family Support. This means that support for children will be available primarily in one payment, Family Support, and this will be readily transferable between benefit and work.
  • From 3 October 2005 Childcare Assistance increases again.
  • From 1 April 2006 a new In-Work payment is introduced to ensure movement into employment is rewarded.
  • From 1 April 2007 Family Support rates increase further.

The Government will also legislate to have the rates and thresholds of Family Support regularly adjusted for inflation in the future.

"Supporting Families"

Parenting support programmes receive a major boost as part of a $75.5 million Supporting Families package, which is designed to stand alongside the Working for Families package (see above). The package provides (all figures over 4 years unless otherwise stated):

  • $31.9 million to expand Family Start from 16 to 24 communities over the next 3 years, reaching 2,205 additional high needs families by 2007;
  • $16.4 million to employ an additional 38 Social Workers in Schools, increasing the number of low decile schools with access to the programme from 220 to around 330 by 2007;
  • $20.7 million to expand the Waitakere Family Violence Intervention Pilot Programme to all 12 Work and Income regions, and to work with Pacific community leaders on family violence prevention strategies for their communities, as part of the implementation of Te Rito - NZ Family Violence Prevention Strategy;
  • $3.3 million for home and community based mentoring programmes by older NZers to support young families; and
  • $3.2 million to continue support for the seven communities piloting the Stronger Communities Action Fund in 2005 and 2006.

WINZ is setting up a freephone service to give people information about changes to benefits and family assistance. The number is 0800 774 004. People calling should have information about their income, their childcare and accommodation costs, to see what they might be eligible for.

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