Labour promises $60 a week for new babies

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Last updated 16:30 27/01/2014
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David Cunliffe
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LABOUR LEADER:David Cunliffe.

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Labour leader David Cunliffe has launched his election year pitch to voters with a promise of a cash payment to low- and middle-income parents of newborns and an expansion of free early childhood education.

The Best Start package, the flagship of Cunliffe's state of the nation speech in Auckland today, will focus on the first five years of a child's life and help families struggling to meet the rising cost of living, Cunliffe said.

It would give all families with a newborn and earning less than $150,000 a year, a payment of $60 a week through to the baby's first birthday.

It would apply to 59,000 families or about 95 per cent of children under one year old, he said.

"That investment will continue for parents on modest and middle incomes until their child turns 3," Cunliffe said. About 63,000 families, or 56 per cent of all 1 and 2-year-olds, would qualify for the extended payment.

It would make a real difference to struggling parents, for example covering the cost of a week's supply of nappies and baby food, he said.

At the same time Labour has dropped its earlier plan to extend the current in-work family tax credit to beneficiaries.

He said there would also be free antenatal classes for all first-time mothers and early home visits.

Free early-childhood education for 3 to 5-year-olds would be expanded from 20 hours a week to 25 hours and paid parental leave will be extended from 14 to 26 weeks as set out in list MP Sue Moroney's bill.

There would also be more help for expectant parents.

Cunliffe said the package was a first step in Labour's reform package which would include education, health, housing and economic development.

Labour has costed the package at $147 million in 2015-16 rising to $566m a year by 2020.

His speech stressed the increasing gap between the "haves and have-nots", saying the wealthiest few were doing well, while people in the middle stayed there and those at the bottom went backwards.

"This is now a country where one in four children is growing up in poverty. That's not acceptable," he said.

The top 10 per cent owned 50 per cent of the country's wealth while the bottom 50 per cent owned just 5 per cent of it, he said.

Rising interest rates would also hit household budgets.

Cunliffe said that under Labour there would be more jobs and a full day's work would cover the cost of the basics. The amount New Zealanders paid in tax and for power and groceries would be fair.

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He reaffirmed Labour's commitment to a capital gains tax and reform of the Reserve Bank Act.

NATIONAL: BRIBES WILL HAVE MASSIVE COST

National accused Labour of "bribing people with massive extra spending".

Economic Development Minister Steven Joyce said Labour was pledging to spend "the thick end of an extra three-quarters of a billion dollars a year" and the party haven't learned any lessons from their last time in Government.

"It's like the [global financial crisis] never happened," he said.

"Labour's last big spending splurges between 2005 and 2008 increased the deficit, dramatically increased interest costs, and put the economy into premature recession."

He questioned if Cunliffe would find the extra cash for the pledges from increased taxes or more borrowing and much higher interest rates.

"Mr Cunliffe acts as if he has magically got $1.5 billion a year to spend because he cancelled some already-cancelled Labour Party policies last week that have never been budgeted in the country's accounts," he added.

GREENS: LABOUR TAKING CHILD POVERTY SERIOUSLY

Green Party co-leader Metiria Turei said welcomed Labour's plans to boost support for the families of new-born children.

She said many of the proposals, matched her own party's own policy.

"We're really pleased that they are taking the child poverty issue seriously and investing in our kids, Turei said.

"It's been needed for some time."

Turei said the policy "looks affordable" although she later admitted she did not know how it was going to be funded.

She did not have an issue with the payments going to households with incomes of $150,000 a year, saying the Greens supported a universal child payment.

The policies announced in recent days showed a "real contrast" between the Greens and Labour on one side, and National.

Judith Nowotarski, president of the teacher's union New Zealand Educational Institute,praised Labour for promising to invest more in children's early years.

The policies would give parents more time to bond with their babies "and less financial anxiety", she said.

"Research shows that for every dollar spent on high quality [early childhood education], more than $10 is saved in spending in the justice, social welfare and health systems later in life," she said.

LABOUR'S PLAN

* $60 a week for newborns in families on a combined income of $150,000 or less for the first year of their child's life. That will continue up to the child's third birthday for those on low and middle incomes

* Early-childhood education will be increased from 20 hours to 25

* Labour will fund the development of more early-childhood centres in lower income communities

* Extending paid parental leave from 14 weeks to 26 weeks

* Free antenatal classes, making sure 80 per cent of pregnant mothers are booked in for antenatal checks by 10 weeks, extending visits by Well Child providers like Plunket, and access to free early childhood education for vulnerable under-3s.

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