Labour policy is band aid economics with a side of Panadol, say opposition parties

Jacinda Ardern has announced a change in the threshold for childcare subsidy and an increase in the Working for Families tax credit in her keynote speech at the Labour Party conference.

Presented as a package to address the cost of living crisis, the threshold shift will see eligibility for subsidised childcare assistance extended to 54% of families, taking in an extra 10,000 children. Ardern offered as an example a family with two parents both working 40 hours a week on $26 an hour and with two children under the age of five; they would now qualify for the scheme, receiving $252 a week, she said.

The family tax credit will increase by $9 a week for the oldest child to $136 a week, and $7 for younger sprogs. The increase, which kicks in from April will also see Best Start go up by $4 to $69 a week.

The childcare subsidy is expected to cost $189 million over four years, while the increase in family tax credit is estimated at around $26 million a year, pending the Treasury’s half-year fiscal update next month. “This kind of targeted support not only reaches those who need it most, it is support we can afford that unlike across the board tax cuts, won’t have a significant impact on inflation and make the problem worse,” said Ardern.

Speaking to conference delegates, Ardern assailed National for freezing childcare subsidies in 2010. “We’re targeting one of the most significant costs for working families by making childcare and before and after school care more affordable to a greater number of low and middle-income families.”

Casting ahead to the 2023 election, Ardern told the conference: “The question next year will be: who is best to help New Zealand navigate these tough times. Who can provide the security and certainty New Zealanders need to get through, with a plan, with confidence and with optimism. The answer is Labour. Because we have been here before. Because we have the track record and the experience. Because we can manage a crisis and make progress. Because we are not done yet.”

Jacinda Ardern in her keynote address at the Labour Party conference in 2022. Photo: Toby Manhire