50,000 Families Pay No Tax

Next year, around 50,000 low-to-middle income working families will pay no tax, Treasurer Bill English said today.

"It has been suggested that low income families shouldn't have to pay any tax. In fact, many already don't. And past and planned tax reductions, along with increases in Family Assistance, mean that, in 2000/1, the assistance received by around 50,000 families will more than offset the amount they owe in tax.

"For instance, a single-income family, with an annual income of $30,000 and four children under 13, will get $161 a week in Family Assistance for the 2000/1 tax year - but only pay $106 in tax. That means the tax system pays them $55 a week.

"Even if that family earns $35,000, they pay no tax, and instead get a net benefit of $8 per week.

"Another single-income family with an annual income of $20,000 and three children aged under 13 will get $88 per week from the tax system.

"And with the introduction of the Parental Tax credit from 1 October 1999, even more working families are going to benefit from lower taxes.

"It's hard to see how people can argue that tax cuts are bad for the economy and bad for these families.

"This Government believes low and middle income working families should see the rewards for the effort they put in. The tax reductions we've made - and plan to make in the future - are making a real difference to families," said Mr English.