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FamilyBoost policy: $14m of $62m spent on administration costs
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Nearly a quarter of the money spent on National’s flagship FamilyBoost policy has gone towards running the scheme, instead of helping families.
Of the $62 million spent so far, just $48m has been paid out to parents, while $14m has gone towards administration costs.
Claims began being accepted by Inland Revenue (IRD) for the early childhood education rebate in October last year.
Families can claim 25 percent of their weekly cost of childcare, up to a maximum of $75. Payments for those earning between $140,000 and $180,000 are gradually reduced and those earning more than $180,000 are not eligible.
When National first announced its FamilyBoost policy ahead of the 2023 election, both Christopher Luxon and Nicola Willis downplayed any administration burden.
“Our view is it doesn’t cost much more to administer at all because we already have these existing mechanisms. It’s very similar to how working for families payments are made essentially. So the processes are well established in the IRD,” Luxon said in March of that year.
Willis agreed, adding at the time: “Last time I checked [IRD’s] already got 4000 staff and budget of around $750m. I reckon they can make this work.”
The finance minister told RNZ on Tuesday the $14m cost to run the scheme included its establishment cost.
“I have told Inland Revenue I expect the costs to fall in coming years,” said Willis.
“To date 58,422 households have received $48.6 million through Family Boost. When we introduced the scheme we anticipated it would deliver more assistance to more people and I expect to be in a position to make an announcement about that in June,” she said.
All the money put aside for the scheme remains available for it at the Budget, and policy changes to widen the eligibility will be announced next month.
It comes after the minister confirmed last month that initial estimates from Inland Revenue that 21,000 families would be eligible to claim the full amount from the scheme were, despite best efforts, “wrong”.
Willis said the modelling had been challenging because Inland Revenue had not had reliable data about how much parents were paying for early childhood education.
At that time just 249 families were consistently claiming the full amount.
Labour’s finance spokesperson Barbara Edmonds Photo: RNZ / Samuel Rillstone
Labour’s finance spokesperson Barbara Edmonds told RNZ the scheme was quickly becoming an “embarrassment for the finance minister”.
“That is taxpayer money that isn’t helping families with childcare, rather going to the administration costs of a scheme that is quickly becoming a farce for parents.
“Nicola Willis catastrophically botched the numbers, recently being forced to admit only a few hundred families are getting the full amount for childcare,” she said.
“Of the 130,000 families she claimed would receive some support, a figure she revised to 100,000 upon coming into government, only half are getting any money at all.”
Edmonds also criticised National for the scheme being “unnecessarily complicated for time-poor parents, who have to keep invoices for childcare and submit them for a rebate”.
Responding to that, Willis told RNZ that Inland Revenue was looking at ways to improve the application process, “but the feedback I and IRD have had from parents is that the tax credit is easy to apply for”.
“Creating a simpler rebate system would have required delaying the scheme for a couple of years while it was developed.
“The government was not prepared to do that,” she said.
rnz
The chief executive of the Parliamentary Service is confident there will be enough room to accommodate the increased number of MPs and their staff coming into Parliament.
On current numbers, up to 131 MPs could be sitting in the Chamber following the election, brought on by a record overhang result.
Clerk of the House of Representatives Dr David Wilson told the Spinoff that currently the debating chamber had enough chairs to seat 124 MPs – including the Speaker of the House – and work was being done to accommodate more by altering the seating arrangement.
In a statement, Parliamentary Service chief executive Rafael Gonzalez-Montero said planning for a larger Parliament had been going for “some time”.
“Now that the election results have confirmed an increase to the number of members we are looking at several options.
“We are confident we will be able to accommodate all members within the Chamber.”
VNP / Phil Smith
Gonzalez-Montero said office accommodation for members and their staff would be “stretched” for a short time, but the new Members’ Building was only a few months away from “practical completion”.
That building – located behind Parliament – was due to be ready to occupy in April next year and had capacity to accommodate around 30 backbench MPs.
“All members should be in fit-for-purpose accommodation from that point,” Gonzalez-Montero said.
Following the 2023 election, 123 MPs sat in the Chamber – a record number at the time. That decreased to 122 following the resignation of National MP Judith Collins.
Collins held the seat of Papakura and stepped down in May and Parliament voted against holding a by-election because it was too close to the election.
The election result also meant high-ranking National Party MPs like Chris Bishop, Paul Goldsmith, Nicola Willis and Gerry Brownlee – Speaker of the House and an MP for 30 years – would likely not make it back into Parliament.
Only resigning or retiring MPs were permitted to give a valedictory speech meaning none of them would get the chance to give a valedictory statement.
Asked if their would be special allowances for valedictories, Wilson said in a statement that normally only MPs were allowed to speak in the House but the House could suspend its own rules or temporarily alter them.
“It could do so to allow former members to address the House.”
Wilson said no such arrangements could be made until the next Parliament opened and members sworn in.
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