Income Tax (FamilyBoost) Amendment Bill

on behalf of the Minister of Finance: I move, That the Income Tax (FamilyBoost) Amendment Bill be now read a third time.

I would like to thank the members of the House for engaging with the content of this bill during the committee stage. It is good to see such thought going into the objectives of this bill.

I would like to emphasise one point about FamilyBoost: this scheme is targeted at low to middle income New Zealand families. While some higher-income families will receive some FamilyBoost, the fact remains that FamilyBoost is targeted at low to middle income families. That means that the benefits of FamilyBoost are concentrated on low to middle income families. They receive the tax credit with no abatement. The fact that some higher-income families will also receive some of the benefit of FamilyBoost simply shows the effect of abatement in action.

Just as with Working for Families, we cannot simply abruptly terminate entitlement. It must be abated to ensure and allow for different family circumstances and incomes. That naturally means that although the focus is on low to middle income earners, there is some peripheral benefit to higher-income earners.

To remind you, this bill proposes that FamilyBoost credits increase from 25 percent to 40 percent of weekly early childhood education fees, meaning much larger FamilyBoost credits for eligible families on the fees that they pay. We are also making the scheme available to more families by reducing the abatement rate. This will increase the upper limit for households that receive a portion of FamilyBoost from $180,000 per year of income to just under $230,000.

These are good measures which will bring relief to the targeted income earners, and therefore I commend this bill to the House.

Members, the time has come for the lunch break. The House will resume at 2 p.m.

Sitting suspended from 12.55 p.m. to 2 p.m.