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Single child tax?

Labour (Andrew Little) has claimed Single Child Tax hidden in Budget

Buried in National’s so-called family Budget is a Single Child Tax that will hit medium to low income families, says Labour Leader Andrew Little.

“National’s Single Child Tax will see a family with one child lose as much as $830 a year in Working For Families payments.

But there is no ‘single child tax’. Labour seem to have found that in some situations (dependant on income and number of children) some people won’t benefit as much from tax changes in the budget as others.

It seems very dumb calling not as much of a reduction on tax as a tax.

David Farrar at Kiwiblog: Labour now calls an increase a cut as someone got a bigger increase

So actually they are around $750 a year better off. Claiming they are worse off is like claiming that if you win $800 in Lotto and someone wins $1,000 in Lotto you are $800 worse off.

Stuff: Govt’s income package leaves 20,000 families with one child worse off: Labour

Leader Andrew Little is calling it the “single child tax”, and says it’s the consequence of a more aggressive abatement rate that the Government also introduced to ensure the package was targeted to those who needed it most.

But it had failed to look after a large chunk of low to middle-income families, he said.

While those families would still see a net positive gain to their weekly pay packet, ones with a single child would get a smaller piece of the pie.

So Labour’s complaints are misleading and stupid. Do they think that everyone should get the exact same net positive gain (less tax taken off them)? Except rich people.

“Whenever you’re putting these packages together, there’s always a complexity about it. But I’d be surprised if they understood there’s 20,000 odd single-child families that will now be worse off – but that’s the reality. “

Joyce said those families still saw an overall gain, and Labour was failing to see the bigger picture.

“The abatement changes mean they don’t get as much from the Working for Families part of the package, but they gain more from other parts of the package, in particular the tax changes. They may also in some cases gain from the Accommodation Supplement Changes.

Farrar claims:

They are $15 a week better off as a minimum and if they get accommodation supplement may be up to $115 a week better off.

The Standard pushes the Labour line in Family package that punishes families but does include :

While those families would still see a net positive gain to their weekly pay packet, ones with a single child would get a smaller piece of the pie.

It’s notable that that post got very few comments – perhaps deflated by ‘JamieB’:

From reading the headline and first couple of paragraphs I was under the impression this was a demographic that would have their incomes reduced from the changes.

But then “While those families would still see a net positive gain to their weekly pay packet, ones with a single child would get a smaller piece of the pie.”

So they’re not actually worse off, and Labour and this opinion post are really grasping at straws to find an actual problem with this budget.

Labour have handled their budget reaction quite poorly.

It will be interesting to see if Little or Grant Robertson try to push this in Question Time today.

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