Labour has been trying to say that National will be breaking the promises it made about Kiwisaver, student loans and Working for Families.
Those promises applied to this term.
John Key’s pre-Budget speech makes it clear any changes will not take place until after the election. People will be able to take the proposed changes into account when deciding whether or not they give National a second term.
Mr Key said the Budget will contain changes to KiwiSaver, Working for Families and interest-free student loans – programmes which collectively cost almost $5 billion a year.
“These programmes were introduced during a debt and consumption-driven economic bubble, and it is clear that they are unaffordable,” Mr Key said.
“None of the changes we will be making will affect people before the election so New Zealanders will be voting with all the information they need and can make their own choices.”
The Government intends to reduce the amount of money it has to borrow from overseas to put into KiwiSaver, and increase the amount of genuine savings from the private sector.
It makes no sense for the government to borrow to help other people save nor to help those who could and should be looking after themselves.
Mr Key said Working for Families will also be better targeted at lower-income families, who have a much greater need for assistance, and a little less generous to families higher up the Working for Families scale.
“We will do this gradually, in a way that minimises the impact on families,” Mr Key said.
The student loan scheme will also be adjusted but will remain interest-free.
“The changes we are making in the Budget will make all of these programmes more affordable and ensure they survive into the future,” Mr Key said.
WFF should never have been given to upper income families. A three year repayment holiday on student loans for people who go overseas was also far too generous.
There was no justification for welfare for wealthy people when the government’s books were in surplus and there is even less for it now they’re in deficit.
It will be very interesting to see how opposition parties react to this. It won’t be easy to convince people that borrowing to give money to wealthy families and people who’ve left the country is a good idea.
The full speech is here.