31 March 2008 Media Statement

April 1 changes

Prime Minister Helen Clark said today that policy changes and threshold adjustments taking effect from 1 April will make a difference for the better for many New Zealanders.

“Among the many who will see improvements are workers dependent on the minimum wage, low income families, students, beneficiaries, businesses, the science and research community, and charities.

“The changes will:

- help children living in around 2,400 families, as the minimum family tax credit increases by $416 per year to $18,460

- lift the minimum wage to $12 an hour, including for sixteen and seventeen year olds after the first 200 hours or three months they have worked

- support tertiary students and beneficiaries with a 3.18 per cent increase to their student allowances and to benefits under the annual CPI adjustment. For students this comes on top of a ten per cent lift in the parental income abatement threshold in January

- help businesses, by dropping their tax rate from 33 to 30 per cent

- help members of KiwiSaver retirement schemes with the new employer contributions of one per cent scaling up an extra one per cent per annum to reach four per cent in 2011. This is supported by the tax credit for employers of up to $20 per week

- provide 15 per cent tax credits on research and development investments by business

- benefit charities through the removal of the $1890 cap on charitable donations eligible for a tax rebate of 33.3 per cent. This will further strengthen NGOs, which are also to benefit from the government’s major funding boost of $446 million to the sector over four years

 support the 510,000 older New Zealanders receiving NZ Superannuation or the Veterans Pension, with the rise in their payments indexing them to 66 per cent of the average ordinary wage. For a couple this is $34 a week more then they would have received under the previous National Government’s formula to cut Superannuation.

“The Labour-led Government works to constantly to lift living standards, boost economic growth, and support communities – including through the NGO sector.

“The 1 April changes will make a positive difference for many New Zealanders,” Helen Clark said.

ENDS

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