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Budget 2004 - Working for Families
Budget 2004 delivers a further growth dividend to low and modest income families after several years of economic growth and careful budget management under the Labour-led government. Prime Minister Helen Clark welcomed Michael Cullen's fifth budget, saying it sets out a coherent and highly credible programme to help build a fairer society. Because the government has been a responsible fiscal manager, it is now able to afford significant increases to family incomes and to education, health and justice spending. Helen Clark says she is proud of the growing opportunity, security, and fairness, which the Labour-Progressive Government has brought to New Zealand.
A new approach to social assistance
The Working for Families package will deliver an average increase of around $100 a week in direct income assistance to families with children in the $25,000 to $45,000 band by 2007. Many families with higher earnings will also benefit from this package. Social Development and Employment Minister Steve Maharey says central to the package is the new In-Work payment that will be available to over 100,000 low-and-middle income working families. While beneficiary families will see their incomes rise, those who move into, or remain in, the workforce will receive the most gains from the changes. Steve Maharey says the package also makes major changes to family income assistance benefiting nearly 300,000 families, to childcare assistance and to accommodation assistance. Budget releases at www.beehive.govt.nz/budget
A budget for the long-term - Cullen
Budget 2004 is a strong financial and policy statement from a government with the guts and the confidence to govern for the long-term, says Finance Minister Michael Cullen. The budget commits $2.4 billion in new spending in 2004-05, rising to $3.8 billion by 2007-08. Economic growth is forecast to trough at 2.5 per cent in 2005-05 as the exchange rate and reduced immigration flows impact but to rebound to 3 per cent the following year. The surplus track is for an OBERAC [Operating Balance Excluding Revaluations and Accounting Changes] of $6 billion this year; $5.7 billion in 2004-05; $5 billion in 2005-06. But Dr Cullen says only a small fraction of that money will be available as this week's budget was a big one. Its benefits will roll out over the next four years, limiting capacity for additional new spending initiatives in the coming two years.
Twice as many hip and knee operations
The Labour-Progressive government is aiming to double the number of major hip and knee replacement operations being funded by the public health system within the next four years. Health Minister Annette King says the number of major orthopaedic operations performed each year is projected to increase from the current 4665 operations to over 9300. In 2004-05 the project will cost $30 million and will lead to an additional 1890 operations. The project's annual cost will increase to $70 million by 2007-08, when the number of major joint operations performed will be twice the current level. The funding for extra hip and knee operations helps bring total annual spending under Vote Health to $9.92 billion in 2004-05.
Extra budget funding for education from early to tertiary
Education Minister Trevor Mallard says Budget 2004 includes a landmark package for free early childhood education. New funding of $365 million over the next four years in early childhood education means that from mid- 2007, three and four-year old children will be entitled to 20 hours free attendance per week at a community-based early childhood education service. This extends the tradition of free early childhood education from kindergartens to other community-based centres. The budget also recognises the pressures on tertiary students with a $110 million package. Parental income thresholds are significantly increased, meaning more than 40,000 students can now either receive full or partial allowances.
Assisting business to take up market opportunities
The government is helping groups of New Zealand businesses to take advantage of significant market opportunities. Budget 2004 supports this with $26 million of funding over four years, says Minister of Economic Development, Jim Anderton. Sector based development initiatives will assist businesses to take up major projects to assist growth and also improve access to investment, world-class technology, knowledge and skills that can fuel economic growth. New Zealand Trade and Enterprise will continue to work with key sectors to expand and maximise value.
Attracting more seasonal workers
From 1 May 2005, unemployment benefit applicants will be able to choose an income assessment of 26 or 52 weeks for the initial stand-down period. Currently they can only have their income assessed over 26 weeks. Attracting more people into seasonal work is at the centre of the budget initiative changing benefit stand-down rules, says Associate Social Development and Employment Minister Rick Barker. The government is committing $5.5 million to this Work and Income initiative for this stand-down change over the next four years. It is part of the implementation of a Seasonal Work Strategy that will lead to shorter stand-down periods for seasonal workers.
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