Tuesday, 28th February 2006

Is Working for Families “tax relief” or “welfare”?

United Future MP Gordon Copeland, the party’s spokesperson on Revenue, recently asked Finance Minister Dr Michael Cullen for a break down of the types of families who will receive financial assistance through the Working for Families package.

“I asked the question of Dr. Cullen because, whilst Labour refer to Working for Families as “tax relief”, National habitually characterise it as “welfare”,” said Mr Copeland.

“In response to my question, Treasury have furnished to me the following breakdown:

Families who receive some benefit income 164,400
Families who receive no benefit income, but receive more than they pay in tax 66,500
Families who receive no benefit income but receive less than they pay in tax 125,900
Total 356,800

Clearly the 164,400 families who receive some benefit income could be described as “welfare recipients”. Equally the 125,900 who continue to pay tax are the recipients of “tax relief”. That leaves the 66,500 families who, whilst working and paying tax, receive “top up” assistance from the State.”

“I do not regard those 66,500 working families as “welfare recipients” since, in my view, that terminology should be reserved for those whose principal support comes from the State.”

“It should also be noted that the number of benefit families (164,400) does not increase as a result of the Working for Families package, (although the amount of income available to those families certainly does!).”

“On balance therefore, true to the centrist position which characterises United Future, I think Working for Families can be accurately described as a “tax reduction and family income package!”

ENDS

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