Radio New Zealand - Te Reo Irirangi o Aotearoa

Govt depts concerned about income-splitting law

Updated at 10:51 am on 20 December 2010

United Future leader Peter Dunne is defending his legislation allowing parents to split their incomes for tax purposes, after Cabinet papers revealed five Government departments have concerns about the proposal.

Papers obtained by Radio New Zealand News under the Official Information Act show the Government consulted the Labour and Inland Revenue departments, the Ministries of Social Development and Women's Affairs and the Treasury.

The departments raised concerns the proposal discourages women's workforce participation, discriminates against sole-parent and low-income families, and increases the gender pay gap.

But Mr Dunne says it is an optional scheme and he cannot understand criticism of giving families more choice.

More than 300,000 families would be eligible for a tax credit.

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