Labour coy over tax hikes

STACEY KIRK AND VERNON SMALL
Last updated 08:17 28/01/2014

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David Cunliffe is remaining coy about how much money Labour will tax from the rich to give low and middle-income families bonus payments for their newborns.

Yesterday, during his state of the nation speech, Cunliffe announced a $60 a week payment for each new born child for families earning less than $150,000, until the child's first birthday.

He also outlined Labour's plans to boost free early childhood education from 20 hours to 25 hours, and increase paid parental leave to 26 weeks.

But it's the baby bonus payments that have drawn the most criticism from opponents.

The child payment would be phased in from 2016 and would cost $151 million in 2016/17 rising to $273m in 2020.

The extra cash would help cover the cost of a week's supply of nappies and baby food, he said.

The overall package would cost $271m in 2016/17 rising to $566m a year by 2020 compared to a cost of about $150m a year for National's policy plan last week.

Meanwhile, Labour has dropped its 2011 plan to extend the current in-work family tax credit to beneficiaries.

Economic Development Minister Steven Joyce said the money was not there - Cunliffe had to either significantly lift taxes or blow the surplus.

Labour has said the policy would largely be funded through a tax hike for those in the top tax bracket - but Cunliffe said he would not reveal how much higher their taxes would be.

"We'll announce our tax policy when we announce it. Which won't be too far away - next few months I would say," he told Breakfast.

"I wouldn't make any assumptions about exactly what it's going to be. We'll be looking at the detail of that and we'll make the announcements when we do."

Cunliffe made his announcement yesterday, off the back of John Key's speech on Friday.

National announced an overhaul to the education system, promising lucrative allowances for a raft of newly-created positions in schools, including executive principals, expert teachers, lead teachers and change principals.

But some were questioning whether a strategic gaffe was made by scheduling Cunliffe's speech on the same day as the Grammy Awards, where it was known earlier Lorde would be a probable winner.

"Not at all," Cunliffe said.

"For a start, you can't control the Grammys - we're delighted that Lorde's won. Just think of all those young people who are watching the news who might not otherwise have been so. So praise the Lorde."

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