How National and Labour's plans would affect five Kiwi families

Here's how Labour and National's plans would effect five Kiwi families.
Alistair Hughes

Here's how Labour and National's plans would effect five Kiwi families.

The two main parties - National and Labour - have two different plans to help families. The chief architects of each, Steve Joyce and Grant Robertson, clash in a debate on Stuff tonight at 7pm. To prepare, we've applied each of their plans to five hypothetical families.

Way, way back when the Budget came out, we looked at what five imaginary families from across New Zealand would get out of it.

The families were created before the Budget details were announced so they're not designed to fit any particular plan.

Now, ahead of the Stuff finance debate at 7pm tonight, we've decided to do the same thing for Labour's policies, and compare them to all that National are offering.

We did the calculations but gave the parties a chance to look over the figures before we published them. Some minor adjustments were made.

Let's get started.

The Petrovs - Gain $178.50 a week from Labour and $154 from National

Hamilton solo-mum Selena Petrov heads the poorest of our families. She takes home $35,000 a year from a benefit and has three kids to take care of.

Both parties would give more to her than any other family.

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The biggest change comes from an accommodation supplement increase, which National announced in the Budget and Labour will keep as well - that brings in another $100 thanks to the part of Hamilton Selena lives in being upgraded to a new type of area.

The Working For Families changes that National have announced would bring her a total of $54, while the more generous changes Labour have announced would net her an extra $65 a week.

Finally, Labour would also introduce a Winter Energy Payment which would give them $140 a month from May to September - which comes out to $13.50 a week if averaged across the entire year.

The Bennetts - Gain $138 a week from Labour and $103 from National

The Bennetts are a sole-income family living in Dunedin, with mother Joan bringing in $49,000 a year while Fraser looks after the kids.

National's tax threshold rise - aka the tax cuts - means Joan's income between $14,000 and $22,000 would be taxed at 10.5 per cent instead of 17.5 per cent. Another $1000 over $48,000 will be taxed at a different rate too.The result is a $13.17 tax cut every week.

But that's small fry compared to the extra they would get from the accommodation supplement - another $40 a week - and Working for Families changes, which would bring in $50.

Labour would cancel the tax cuts, taking away $12.12 a week. But Labour would keep the accommodation supplement boost of $40 and make the Working for Families cash much more generous - $98 a week instead of $50.

The Seuseus - Gain $73 a week from Labour and $45 from National

Mum and dad Jasmine and Iuta live in Papakura with Jasmine's sister Leilani and their three kids.

Iuta works as a teacher earing $64,000, while Leilani works as a casual part-time kitchen hand bringing in $14,000. 

The Seuseus make too much to be eligible for the accommodation supplement.

Iuta makes $64,000, so would gain from both of National's threshold raises (tax cuts), netting him $20.40 extra a week. 

Leilani only makes $14,000, so her tax rate won't change at all.

Under National, the family would be able to pull in $25 per week extra from Working for Families.

Labour would cancel National's tax cuts taking away $20.40 a week from Iuta. But their Working for Families boost will again more than make up for the difference - paying them $66 instead of $25.

The Chin-Wilsons - Gain $31 a week from National and zilch from Labour

Dads Steve and Craig both work in Nelson, bringing in $115,000 in total. Steve is a lawyer making $90,000, while Craig works as a part time sales assistant and makes $25,000.

The Chin-Wilsons make too much to be eligible for Working for Families or the accommodation supplement, so the only gains they get are from National's tax cuts.

Craig would get an extra $10.77 a week while Steve would get an extra $20.40.

There's one somewhat interesting wrinkle here: Craig could already be claiming the Independent Earners Tax Credit, bringing him in about $10 a week. That would disappear under National (and be replaced by the tax cut) but would stay under Labour. 

So if Craig was getting the IETC he would lose $10 and get $10.77 in tax savings - about 70c a week, bringing the family's gain to $21. Statistics suggest about 80 per cent of people eventually obtain the IETC, but they don't do it on week-by-week basis.

The Saxon-Mahutas - Gain $31 a week from National, nothing from Labour

Our wealthiest family are Michael and Abigail, who live in Wellington.

Abigail works as a public servant making $120,000, while Michael is a part-time office assistant making $30,000. 

Like the Chin-Wilsons, they make too much for the accommodation supplement or Working for Families - so all they get from either party is National's tax cuts: $20.40 a week for Abigail and $10.88 for Michael.

Also like the Chin-Wilsons, if Michael was already claiming the IETC that tax cut would essentially be wiped out.

Life, of course, isn't all about income.

Michael has a farmer brother who is worried about Labour's plans to bring agriculture into the emissions trading scheme and charge a levy for water.

The Petrovs and Seuseus are saving for their kids' study plans - savings they might not have to make if Labour came to power and gradually established free tertiary education.

And plenty of people live without kids, meaning Working For Families boosts are no use to them, but National's tax cuts could be significant. A pair of dual earners on the average wage with no kids would get $41 a week from National and nothing from Labour. 

Tonight, from 7pm, Stuff is hosting a debate between Steven Joyce and Grant Robertson, the two blokes who want to look after the nation's bank account. Watch live via the Stuff homepage or whenever suits you afterwards.

 - Stuff


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