Wednesday, July 06, 2005

National have announced the first stage of their tax cut policy - introducing a new tax deduction for pre-school childcare costs. The policy will take effect on 1 April next year, and will cost an estimated $160 million per year.

This tax cut is interesting in that it is aimed squarely at second-income earners and employed sole parents - generally woman; a group Helen Clark has said she wants to get back to work. Stealing the emperor's(esses) clothes...

The cut appears significant as it will allow a deduction of the per child pre-school childcare costs of up to $5,000 per child. The maximum refund therefore is $1,650 per child. If the rest of the package is as judicious as this Cullen and Clark have their work cut out.

The clever touch is - at a stroke - this demonstrates; under National parents will make their own decisions for their families about who works and where and what child care arrangements are made. It lets people make their own choices.

The National policy is a stark contrast with the odious, welfarism and dependency of Labour's Working for Families bribe, sorry package.

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