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Cunliffe announces half-billion dollar baby bonus; keeps a billion up his sleeve

Labour leader David Cunliffe has opened his party's election year appeal to voters with a half billion dollar package of measures aimed at babies and infants, with a $60 weekly payment for all but the wealthiest households (the annual family income cut-off is $150,000).

The announcements leave Cunliffe with around $1 billion to spare for policy initiatives yet to be announced after his confirmation last week that Labour will drop its plans to exempt fresh produce from GST and not to tax the first $5000 of every earner's income.

The Best Start payments will be available for the first year of a baby's life, extended until their third birthday for infants in low and middle income households.

"Sixty dollars will make a real difference to the lives of struggling parents," said Cunliffe, who expressed disbelief that local charities had begun seeking sponsorship for New Zealand children in need, just as they did for children in poverty overseas. "For example, it will pay for a weekly supply of nappies and baby food."

The measure would not kick in until April 2016, some 18 months after the general election, while a further element of the plan, to extend free early childhood education from 20 to 25 hours a week is not scheduled until the 2017/18 fiscal year, when the election after next is scheduled.

Building to an annual estimated cost of $273 million a year by 2020, the policy will replace the current parental tax credit, at a cost of $15 million a year.

Some 59,000 households would become eligible for the first year payments, while around 63,000 would receive the one and two year old payments.

The package also confirms Labour's intention to extend paid parental leave entitlements from 14 weeks at present to 26 weeks, as proposed in a private members' bill before Parliament, but which the government will not support. The fiscal impact of that decision is calculated at $125 million a year by 2020.

The plan also sees highly vulnerable children entering early childhood education earlier than age three from next year, building from $5 million initially to an annual cost of around $70 million by 2020.

The policy also includes plans to expand the availability of early childhood centres, offer free antenatal classes for expectant parents, and boost the availability of visiting services, such as Plunket, for parents needing support.

"We want to send a message that we value the early years," Mr Cunliffe told a packed secondary school hall in Kelston, West Auckland. "We know the start a child has in life affects all of us in the long run, and the more support we can give parents during those critical years, the better off they will be."

In a reference to Prime Minister John Key's announcement last week of bonus payments for the country's best teachers to keep them in the profession and spreading their knowledge, Cunliffe said: "If a kid starts without the basics in place, just paying bonuses to a few of their teachers isn't going to turn it round."

He dismissed current economic conditions as "a slight uptick in growth" that would be praised by "a few vested interests with rock star lifestyles."

Rising interest rates would put additional pressure on families, Mr Cunliffe said. People paying $500 a week now on a mortgage at 5.75 percent annual interest would see that payment rise by $136 a week if interest rates rose to 8 percent.

"The rich are getting much richer, the middle is struggling and the poor are going backward."

Cunliffe's State of the Nation speech completes a trifecta of election year throat-clearing statements from the three largest political parties. National hung its hat on a plan to spend $359 million over four years to incentivise top teachers and spread their influence more widely through the public education system.

The Green Party announced education policy over the weekend to create health and social service clusters around schools in low income areas.

(BusinessDesk)

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Comments and questions
40

Using taxpayer money to buy votes. Must be election year.

A bribe by any other name. Done by many previous Labour leaders, not even an original thought!

Labour's costings seem a little on the light side

Those economics classes were so boring - slept in those mornings. Indigenous Wimmins Studies was much cooler.

Just because y'all thought you could get an A+ more easily so you stood some chance of getting into Law School on the Māori quota after all?

Actually I remember seeing you in economics 101 now when we were at Uni with the David C bloke now I think about it!!!!!

Wow, what a brave new initiative to propell NZ to prosperity and independence for our citizens. The same stuck record again.

I don't get this guy nor he and his colleagues style of labour party for that matter.
These ideas are rabid.
Even the ones dropped were stupid excepting I could warm to the first 5k as tax free, maybe.
If he is determined to turn it all into a lolly scramble, lets come up with some real creative and generous bribes. Argentinian and old Greek socialists could give him some pointers.

Elections -- the time when politicians make promises to spend our money...

Strange he is announcing this stuff today.... everyone seems more interested in the grammies.

Bribes for the breeders !

If John Key's policy announcements during recent weeks are described as 'the dance of the desperate'; then this irresponsible 'election bribe' from Cunliffe can only be described as 'the dance of the drowning'

Really? Really? That's the economic answer for prosperity for us all? More hand-outs. More dependency on someone other than yourself.
Now $150k pa earners are also the poor.
Presumably this gift won't be stole from taxpayers (Yeah right).
Hmm the economy, I suppose this could give a slight lift to the economy as a fair chunk of the money will probably be spent on fags, booze and takeaways.

150k income per annum might be poor in Cunliffe's eyes, but 150,001 is 'rich prick' level. He assures us that those over 150k will pay more tax. I know one who won't.

I find Cunliffe's comments about buying a weeks nappies and baby food an insult to those of us who used cloth nappies and spent hours making our baby food. We are not that old and yes we were broke in those days. It was called living within your means. We are so much better off now

This just further erodes the dignity of the individual. Receiving a handout from the government when you have a child is saying "you can't provide for your own family, you need the government's help". Sure, this may well be the case for some (although I would argue that it would be preferable to achieve this via the tax system) but $150k earners???

Labour was going to reduce the coffers by $1.5b in one way and has changed its mind. How does that give it $1.5b to spend?

Its called Cunliffe economics!

Why on Earth does Labour continually encourage the lower echelons of Society to breed like Flies??? he might as well build huge orphanage's and take over the rearing of everyone's children, on top of this we are already feeding societies children breakfast, where does it all stop??
I always though it was an honor and privilege to have and rear children, when you could afford to have and rear them on one income, and give them a decent life.
It just shows you how the world has changed! the modern human wants children but doesn't want to rear them, and want's the State to bare all of the costs and responsibility, Staggering!!! to say the least, glad I won't be around in 30+ years to witness the results.

The 'lower echelons' are Labour's voter base. Only needs to appeal to those who love freebies and aren't smart enough to think it through.

And how do you really think the extra cash "paid" to the parents will get spent ? Reading books , nappies or providing pay tv for the babies education ,new car,travel, craft beer instead of tap beer etc etc
Whereas if the money is spent on teachers there is huge potential advantages esp in low decile areas. Sometimes good teachers are better role models than parents...
Are Labour so desperate that they need to start buying votes already? Remember the Nordmeyer handouts ???

Mr. Cunliffe is probably too young to remember Rowling's 'baby bonus' election promise.
Here's what happened David. It destroyed the last remaining shred of credibility Labour had at the time, and sank them in the polls. Sometimes bribes just work that way.
This announcement of yours deserves the same fate.

Oh Goody - three more babies - $180 extra a week - nearly $10,000 a year! Plus the dole, plus accommodation benefit. Why work? The taxpayers can keep me.

Would the true Credible Economic Party please stand up.

Oh Dear!

"The rich get richer and the poor get children" ...there's a lesson there somewhere.

Once again we see the unproductive spectrum of the economy benefiting from Labour handout(s). Providing handouts may-well sway many voters based on politcal headlines, but the smart voter will understand the real implications of this sort of policy (and the real cost to them and every other taxpayer) and vote the other way. Just what exactly happened to the personal responsibility of parents to bring-up (and pay for) their own children?

Are a few Labour MPs (annual salary $144,000) planning on having babies once they gain power? More maternity leave and get more money while you are off. High five.

A silly comment. You must be a Tory supporter. I'm not aware that any MPs will be eligible.

Fact. Breeding is discretionary.

If I have more children will I be able to get a lump sum to put towards a deposit on a house like you used to with family benefits ?

No just wait a week and he will come out and offer anyone who has 3 or more children that will vote Labour a free State gifted house...no worries.
This is Labour at it's very finest, giving everything away!! when we are all flat out recovering from our worst financial catastrophe ever, not to mention the Earthquakes etc.
Absolutely astonishing!!!

No No No Labour, for once come up with something original that will benefit all kiwis, paying people to have more children will mean more relinquished responsibility that the state will have to cater for, raise the minimum wage if you want to buy votes

Some of the sentences were totally eye catchy. I just loved them.

Forklift

Where is the money coming from? Cancelling policies (last week) that were never enacted, does not mean you have money to spare. Mr Cullen has yet to explain where the 1.5billion will actually be taken from. In his speech he said he was going to unashamedly tax those who have more. Given that that this is limited to those earning over 150K; as those under this get welfare. What tax rate will he impose to afford his policy, 50, 60 maybe 70 cents in the dollar?

David Cunliffe said that he was against continuing the 'Haves and Have-Nots', yet here he is rewarding the 'Have more children people' and giving nothing to the 'Have-No(t) children people'.

Only a few get the costing, so far journalists have not asked Mr Cunliffe where he is getting the funds. He says it’s from Funds he is saving??? Dunedinite & RJ Robert understand, however Cunliffe’s original proposal of no GST on vegetables, and the first $5,000 free of tax was to cost the taxpayer $1.5 billion. This money would have to be made up elsewhere in taxes. Now Mr Cunliffe has journalists taking his word and saying the spending he is proposing is coming from savings. There is a murmur that Labour will be raising taxes on those individuals earning over $150,000. This tax rate will be 39%. Even if this happens they will not raise enough to cover the $1.5 billion of “savings” he is proposing to spend. There is just not that amount of people earning this amount. What an utter moron when it comes to economics.
P.S. Backbenches salary is below $150,000 level, JUST!

Only a few get the costing, so far journalists have not asked Mr Cunliffe where he is getting the funds. He says it’s from Funds he is saving??? Dunedinite & RJ Robert understand, however Cunliffe’s original proposal of no GST on vegetables, and the first $5,000 free of tax was to cost the taxpayer $1.5 billion. This money would have to be made up elsewhere in taxes. Now Mr Cunliffe has journalists taking his word and saying the spending he is proposing is coming from savings. There is a murmur that Labour will be raising taxes on those individuals earning over $150,000. This tax rate will be 39%. Even if this happens they will not raise enough to cover the $1.5 billion of “savings” he is proposing to spend. There is just not that amount of people earning this amount. What an utter moron when it comes to economics.
P.S. Backbenches salary is below $150,000 level, JUST!

Unless hes good at pulling gold bars out his a*** it just doesn't add up

Given that the root cause of the planet's looming environmental crises is overpopulation, one would think that any principled environmentalist party would be absolutely aganst pro-natalist policies.
So, what is the Greens' stance?

Such sweeping generalisations is why I dislike most Greenies. Though I agree that over population is a problem for the World in general it isn't a problem for the First World. So your anti natalism is just another feel good knee jerk peice of luddism in disguise.

If you want to tackle the problem of over population get behind women's empowerment. Liberating women stops them from being used as baby factories.

So how liberating is entrapment into a welfare system that pays them for the number of babies they make?