(Uncorrected transcript-subject to correction and further editing)

1. Sue Bradford (Green) to the Minister of Finance: Does he have any plans to bring forward or increase his Working for Families package in light of the Public Health Advisory Committee's findings on child poverty; if not, why not?

Hon Dr Michael Cullen (Minister of Finance): No, the package is already expected to achieve the goal set by the Public Health Advisory Committee.

Sue Bradford: Does the Minister agree that reducing child poverty by 30 percent makes long-term economic sense as well as being an important social policy goal; if so, when will he bring forward the Budget provision for the full Working for Families package so that our poorest children get the benefit of a record Government surplus a lot sooner than 4 years?

Hon Dr Michael Cullen: The goal was to reduce child poverty by 30 percent by 2007. The committee reports that, even on the stricter measure, that is what the package will achieve. On the looser measure the reduction will be 70 percent.

Hon Mark Gosche: On what assumptions is the estimate of a 30 percent reduction in child poverty based?

Hon Dr Michael Cullen: There are two measures of family poverty widely accepted internationally: one sets the threshold at less than 60 percent of the medium wage after housing costs and the other puts it at 50 percent. The 30 percent reduction estimate is based on the tougher 60 percent measure. Using the lower 50 percent measure the Working for Families package is expected to achieve a 70 percent reduction in child poverty.

John Key: If one of the goals of the Working for Families package was to make work pay, why are working families having to wait until 2006 before they get their in-work payment?

Hon Dr Michael Cullen: Apart from anything else, there was certainly clear advice from officials that there was a serious risk of system failure if it was attempted to be introduced from 1 April 2005. This side of the House does not stand for system failure.

Paul Adams: Has the Minister given serious consideration to other plans to tackle child poverty, such as United Future's proposal released in April this year to establish one-stop shop family support centres, which would coordinate referrals for families to local health, budget, income support, early childhood and parenting services, given that the Government has adopted other aspects of United Future's proposal, and that similar centres operate successfully overseas; if not, why not?

Hon Dr Michael Cullen: Obviously, that is outside my area of responsibility; it is more in the area of responsibility of Mr Maharey as Minister for Social Development and Employment. We will always consider carefully good suggestions from United Future and good suggestions from the Greens, and even good suggestions from New Zealand First. Sadly, we never get any from either ACT or National.

Sue Bradford: When will the Government give priority to lifting the minimum wage to at least $12 an hour so that the burden of supporting families does not lie so much with the taxpayer?

Hon Dr Michael Cullen: The Government has already substantially lifted the minimum wage in New Zealand. It will continue to move it up on an annual basis, but excessively large increases in one jump would threaten the potential for an increase in unemployment.

Hon Mark Gosche: When will the Working for Families package be fully in place?

Hon Dr Michael Cullen: Because of its comprehensiveness, the package is being phased in over 3 years. The first elements came into force a few days ago on 1 October. Full completion will occur on 1 April 2007, with ongoing adjustments thereafter.

Paul Adams: Has the Minister given serious consideration to other plans to tackle child poverty, such as allowing families to capitalise the assistance they receive from the Working for Families package, to help them buy a house or repay their mortgage; if not, why not?

Hon Dr Michael Cullen: A range of options are being looked at for future further assistance to families.

Sue Bradford: When will the Government stop giving priority to its capital works programme over children's health, and instead, allocate revenue to bring the Working for Families package forward by 2 years, and borrow for capital works, as every previous Government has done?

Hon Dr Michael Cullen: The Government is spending far more on health than it is spending on roads at the present time, and has been subject to some considerable criticism from some people in the past on that. The Government running strong surpluses is why the economy is running very strongly as well. A recent election suggests that parties that want to borrow their way into high interest rates will be punished by the electorate for that.

Sue Bradford: When will the Minister amend his Budget to provide for inflation adjustment for family support payments back to at least 1998 levels as an obvious and immediate measure the Government could take to assist children in poorer families?

Hon Dr Michael Cullen: I would be very surprised if the increases that will come into force progressively on 1 April 2005, 1 April 2006, and 1 April 2007 do not do more than inflation adjust back to 1998. They will do considerably more than that, and inflation adjustment will occur thereafter, from 1 April 2008 onwards.