21 May 2015

Govt targetting aid for families - English

6:30 pm on 21 May 2015

The Government is aiming to target a narrower range of families in need in Budget 2015, Finance Minister Bill English says.

This budget will be the seventh for Finance Minister Bill English (right - pictured with Steven Joyce on the way to the lock-up at Parliament's Banquet Hall).

Ministers Steven Joyce, left, and Bill English on their way into the Budget 2015 lockup. Photo: RNZ / Alexander Robertson

Mr English, asked why he had changed his mind and raised benefit rates after rejecting that approach for several years, said one way to think about it was to compare the package in last year's Budget which included free doctors' visits for under-13s.

Read more stories on Budget 2015

"The more you look at the hardship data, the more it became clear we needed to target a narrower range of families in order to have an impact," Mr English told reporters.

"We've talked often about the 60,000-100,000 families who are in persistent deprivation and you can't quite target them on their own because we don't have the tools, so the next best thing was an increase in the core benefit rate."

The Government campaigned on no new taxes at the 2014 election; asked whether the new Border Clearance Levy represented a broken election promise, Mr English said there was growing pressure on the border.

"We've just spent some number over $20-million on a fruit fly outbreak in Auckland and so we've taken the opportunity at the same time as ramping up our efforts at the border to get it onto a more sustainable basis for funding.

"You can argue about what you call it - it's a border levy, we know what's it's going to pay for and we know who's paying it."

Mr English also defended the decision to permanently scrap the $1000 KiwiSaver kickstart payment.

"It was always put there to attract people into a new scheme that they weren't familiar with but the scheme has been very successful in attracting the majority of working age New Zealanders," he said.

"So the rationale for having it is not nearly as strong as it was, with respect to auto-enrolment, that's still ahead of us.

"There are benefits to householders to being in KiwiSaver, quite a few people aren't and they aren't in there for quite good reasons, but we'd like to give everyone the opportunity to opt out."

A deficit of $684 million was forecast for this financial year, with a small surplus the year after - subject to the usual economic variability, Mr English said.

" I think over the last 20 years the average shift, or the change between Budget operating balances and the actual out turn has been something over a $1-billion, plus or minus, so if you take this number for instance it's unlikely we'll see oil prices and inflation drop again when it's already zero.

"While there is uncertainty about dairy prices they're unlikely to drop a further 40-percent, but there will be other influences that we don't expect that will turn up."

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