Workers on the average wage will have an extra $15.66 in
their pocket each week from Wednesday, when a raft of changes
including tax cuts, increases to benefits and superannuation,
and a boost to the minimum wage take effect.
From April 1, nearly $2 billion in extra cash will start to
flow into taxpayers' pockets as a result of the tax cuts and
a 3.4% increase in benefits and superannuation and student
allowances.
The minimum wage will also go up by 50c to $12.50 an hour,
although critics say the real benefit is minimal - when
adjusted for inflation the real gain in income from a year
ago is just $3.78 a week.
A hike in Accident Compensation levies will make a small dent
in the extra money, but overall the changes leave full-time
workers on the minimum wage $24.30 better off a week.
Earners on the average wage of $48,500 will get an extra
$15.66 a week and those earning $100,000 will benefit by
$18.46.
The tax cuts package is worth just over $1 billion over the
next year and will benefit 1.4 to 1.5 million people,
according to Treasury estimates.
The tax cuts are a key part of the Government's plan to
combat the recession and the message is clear - spend it for
the short-term good of the country, or pay off debt for the
longer-term good.
Finance Minister Bill English said people could spend it as
they chose, but spending it would help "cushion" the country.
"People who have got high levels of debt need to reduce their
debt and as a rule, New Zealanders have too much debt.
''But for those who have lower levels of debt, if they spend
it, it helps the economy."
However, the shaky jobs market appears to be putting people
off spending.
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