Parents Choice 08 Succeeds in Raising Income Splitting

The value of parenting has again been underscored. This time through a United Nations Report expressing concerns about the impact of childcare centres. More on this at www.roger-ellis.blogspot.com

Parents Choice was formed in early 2008 to campaign for income splitting for tax purposes and other reforms which would provide greater recognition of the value of parenting. Ten months, several media interviews, several blogposts and many letters to MPs later we have succeeded in bringing the idea of income splitting to the fore. Several articles have subsequently appeared in the mainstream press about income splitting.

The election result did not show significant support for the one party promoting income splitting - United Future. However, the poor election result may be due to factors other than one of its policies. For example, the two large parties clearly drew more support from the smaller parties as voters tried to express their preferences regarding a centre-left government or a centre-right one. Despite the low vote for United Future the incoming government has agreed with United Future to support the Introduction of a new Bill into Parliament for income splitting. While this falls short of guaranteeing income splitting it does at least get a draft law into Parliament and will get it to the Select Committee stage so that the public can have its say. This is a significant step in the right direction and represents the best hope yet of securing income splitting here in New Zealand.

Parents Choice 08 also gave renewed hope to parents around the country who understand the importance of the parent-child relationship and the need for it to be valued by society. Indeed many hundreds of these parents have written to express their support for the campaign this year. Parents Choice appreciated that feedback and wants to take this opportunity to thank you for your support during this year and to wish you and your families/whanau a Merry Christmas and a fantastic 2009.

Parents’ Choice supports United Future’s Families Policy

Parents Choice’08, today announced that it would be drawing the attention of its supporters to United Future’s policy of supporting Income Splitting for tax purposes.
Parents Choice Chairman, Roger Ellis, said “We have been in discussions with several political parties to see which ones were most supportive of parents at home”.
“We recognise that there are aspects of most parties policies that will help parents raise their children as responsible and confident adults. However, United Future has a comprehensive policy programme centred on parenting and raising children. For Parents Choice Income Splitting is a key enabler for parents who deserve recognition for the time they spend investing in the next generation” said Mr Ellis.
Today we are announcing that in our view United Future’s support for parents makes it worthy of serious consideration by voters. We commend such policies as:
• Income Splitting – to recognise the work done by at home parents
• More support for children with disabilities through a Caregivers Allowance.
• Income tax reductions - A simplified personal tax system (10% on income up to $12,000; 20% on income between $12,000 and $38,000; and 30% on income above $38,000.)
• Character education programmes in schools and
• One-stop shop family service centres for parents and children.
We hope that United Future will make the introduction of optional Income Splitting a bottom line in any post-election discussions.
We urge our supporters to consider which parties will best give recognition to parenting as a priority and to vote accordingly.

Playcentres Grossly Underfunded Report Finds

Playcentres are being grossly underfunded. That's the finding of a new report released last week. The report, prepared by Woodhams Research Associates, found that government funding was substantially lower than required for Playcentre to be sustainable due to a systematic discounting on Playcentre costs. It also found that parents are frustrated by the need to waste their time on Ministry of Education red tape rather than providing the programme for their children.

The New Zealand Playcentre Federation said the report highlighted how the government has undermined parents wanting to educate their own children.

Political reaction has been swift with National promising to incorporate Playcentre within the free early childhood funding model and United Future urging action to support Playcentre http://www.unitedfuture.org.nz/default,995,playcentres_being_systematically_under-funded.sm

"We have been trying for years to get the government to recognise the stress they have been putting Playcentre under. Now we have documented evidence of their systematic underfunding" said Playcentre Federation President, Marion Pilkington.

Key findings in the report include:

* The Ministry of Education appears to have ignored 31% of Playcentre costs when calculating funding rates;

* There is no adequate argument for excluding Playcentre from the 20 hours free ECE policy;

* Playcentre members, at centre and association level, have to volunteer for over 2000 hours per year for each centre on activities other than running the educational programme.

* Government policies have discriminated against parent provision of ECE.

"We have always known that Playcentre provides high quality education for our children" said Mrs Pilkington. "The report shows how the Playcentre model of education matches the best international research on high quality outcomes for children and their families as well."

Rural Playcentres often form community hubs and meeting points, especially after the closure of small schools and services such as post offices. It is in the interest of all communities to see that the Playcentre model remains healthy and viable.

"Playcentre calls on all political parties to support our drive for fair funding, effective structural support and reduced bureaucratic red tape" said Marion Pilkington.

The full report is published at www.playcentre.org.nz

National's Families Policy Welcomed

National has released its Families Policy and it contains some impressive changes to the status quo. For instance it extends the 20 hours free Early Childhood Education to Playcentres, Kohanga Reo and Pacific language nests. It's also promising to increase the number of Plunket or Well Child services for new parents who need extra help and to fund Plunketline. Labour has refused to properly include Playcentres within the ECE 20 hours policy.

While National fails to include income splitting for tax purposes there is a pledge for further tax reform. Parents Choice 08 does not see the National Party's family policy as being inconsistent with either its own policies or those of United Future if Saturday's election leads to a National-United Future government.

Recycling Electronic Waste - A Smart Move

Children are becoming increasingly aware of the need to recycle and reduce energy use. e-Day 2008 is an initiative to promote the recycling of e-waste. Old mobile phones, PCs, adaptors are too often ending up at NZ landfills. e-Day has been organised to give kiwis the opportunity to bring in their old mobile phones and PCs, to clean house (and garage) and to do it in a way that is gentler on the planet.

The Minister for the Environment, Trevor Mallard MP, this week launched e-Day in Wellington with e-Day Chair Lawrence Zwimpfer and around 35-40 other guests in attendance. More information about e-Day can be found at www.eday.org.nz

Why not make it a family event, tidy up the unused e-waste and teach the kids about care for the environment?

Tax Cuts Boost Economic Growth in South Africa

Infometrics - a leading economics consultancy in Wellington - have prepared an article (http://www.infometrics.co.nz/article.asp?id=4449) comparing tax rates and economic growth in South Africa and New Zealand. In particular it highlighted the rising living standards in South Africa - especially for the poor.

"The ANC have cut personal tax rates in almost every budget since taking power in 1994. The majority of tax relief has been handed to low and middle income earners."

"A strong economy (which brings healthy government revenue) coupled with a redirection of expenditure to the poor has been the backbone of the ANC’s strategy to achieve ‘A better life for all’. Growing government revenue has enabled them to build 2 million new houses, bring piped water to 17 million people, sanitation to 7 million and implement a social welfare system which is the envy of the developing world. The percentage of the population living in poverty dropped from 41% in 2000 to 32% in 2006. The growth momentum will ensure that further gains in poverty alleviation will be achieved in the future."

Climate change: costs and benefits

If anyone hasn't noticed the climate is changing. Parents, as much as anyone, should be concerned about it. It will be tempting to try to ignore the problem. But it won't go away. It means we will have to change the way we produce energy. It also means we will need to reduce our level of energy consumption. Here's a perspective on Climate Change that you don't hear too much these days.
No Right Turn: Climate change: costs and benefits

Strong Support For Income Splitting

New Zealanders from all walks of life have given an overwhelmingly positive response to the idea of Income Splitting. Over 205 written submissions were received by Inland Revenue, 90% of which supported the proposal and only 7% opposed it.

Seventy percent of submitters said income splitting should be optional and income should be split on a 50/50 basis.

United Future Leader, Peter Dunne, said "UnitedFuture has long championed income splitting as an option for families who want to be able to have one parent stay at home and carry out the vital duties of raising children and strengthening families.
This level and tone of response shows that New Zealanders also support income splitting."

Parents Choice '08 believes that Income Splitting provides greater flexibility to parents and enables parents to determine work and child care arrangements.

Carter Responds To ParentsChoice'08

The Minister of Education, Hon Chris Carter, has responded to concerns about funding for Playcentre. Playcentre receives disproportionately low funding compared to "professional" early childhood services. However, increasing compliance and administration is taking up increasing amounts of time for Playcentre parent volunteers. Parents Choice believes that parent-led Early Childhood Education (ECE) should be valued at least as much as those providers who earn a living or make a business out of early childhood education services.

The response provided by the Minister is as follows:

"Different types of services are funded at different levels because they have different operating costs...Kindergartens have high proportions of registered teachers, usually 100% and therefore can access the higher funding rates."

"Families who use teacher-led services face high fees, which can be a barrier to their children's participation in ECE. Higher funding rates for teacher-led services aim to reduce this cost barrier for parents. In Playcentres parents provide a high level of voluntary input. Higher subsidies for Playcentres would not necessarily increase participation. I can assure you government continues to support the work of Playcentre."

First we appreciate that Mr Carter replied to our concerns. We also accept that the government wishes to encourage participation in ECE. however, in our view parents who volunteer their time to look after their own children should not be discriminated against, in the allocation of government funding.

Parents As Partners - Valuing Parenthood

Parents As Partners is a Waikato-based lobby group that has been leading the charge for better recognition of parenting for many years. When the time comes for congratulations to be passed around when Income Splitting is finally enacted then a huge congrats would be owed to Christine of Hamilton. She has been a tireless worker for the right of parents to be treated as equal partners in parenting.

Her group Parents As Partners aims to enable parents to "establish a partnership for the support of their family;

that we as parents are workers, and that our work is vitally important for the well-being of our society and the economy.

the value of "mother or father-in-the-home". In the context of a recognised partnership they would achieve economic visibility.

the right of parents to share their income for tax purposes by means of the partnership.

that the tasks of income earning and care giving are of equal importance for the family, and that the parents should be free to divide those tasks between them as they see fit, without economic constraints on one or other choice."

Parents Choice '08 wishes the team at Parents As Partners every success in the movement towards greater recognition of parenting. Check out their website at: www.parentsaspartners.org.nz

Brainwaves Trust - A Pioneer in Societal health

Every now and then you find an organisation of unsung heroes who bravely battle on to promote an idea. Recently the work of the Brainwaves Trust has been drawn to my attention. The Aim of the Brainwaves Trust is that:

"One day every child in New Zealand will get the best start in life because parents and the whole community understand and value the impact early experiences have on brain development, and ultimately on the healthy development of society."

Formally the group is a charitable trust which has the goal of raising awareness about new research on brain development. In particular the influence on a child's brain development of early experiences in the first three years of life. The Trust itself is comprised of doctors, educationalists, academic and business professionals who all work voluntarily. If you have a few spare minutes as you navigate the net drop into www.brainwaves.org.nz

If a healthy society is made up of healthy individuals and communities then Brainwaves could be pioneering the way forwards to good societal health. The implications for public policy and child development are significant.

New Zealand needs stronger economy

With so many kiwi families leaving for Australia and so many students doing their OE but not coming back home we have to ask what can be done to bring kiwis home in the long term.

Most parents recognise the value of local community sports and cultural groups. The value of New Zealand’s empty beaches and unspoilt bush walks is appreciated by many families. It’s true that there is more to life than the size of the pay packet. However, if we are to create an environment that remains attractive to our children’s generation then we need to ensure that New Zealand remains competitive in terms of income levels and job opportunities.

A recent study by the NZ Institute’s Dr David Skilling compared our income levels with those of Australia. New Zealand's per capita income was $40,021 per annum. Per capita incomes in Queensland ($54,317) and New South Wales ($55,805), are now significantly higher. Western Australia ($58,688), another popular destination for departing NZers is even further ahead. And the mineral boom in the Northern Territory ($78,527) has lifted the per capita to nearly double the New Zealand figure. Even Australia's poorest state, Tasmania ($49,056) now enjoys a lead over this country.

Extensive tax reform is now long overdue in New Zealand. Most New Zealand families would prefer to spend their own money rather than have the government spend it on their behalf. For parents Income Splitting would be a helpful step along the way to giving us more of a choice. In the absence of Income Splitting lower tax rates would be a step in the right direction. Labour has already announced tax cuts in the recent Budget. Commentators now await National’s tax plan (expected in September). United Future remains the only political party to commit to income splitting as well as tax cuts more generally. Tax cuts and higher productivity have been linked to higher economic growth rates. Without higher rates of economic growth our economy will not be able to provide a higher living standard for all New Zealanders. Without attractive job opportunities we will find it difficult to persuade kiwis to move back home.

Early Childhood Education Funding

Playcentre www.playcentre.org.nz is a parent-run co-operative which provides early childhood education. It is indigenous to New Zealand and has provided a significant share of ECE service in NZ. However, to date Playcentre has been excluded from sharing in the funding the government makes available to teacher-led ECE providers. The reason given is that Playcentre does not charge high enough prices to parents. So therefore they cannot access the subsidies made available to other ECE service providers. Very odd given that the purpose of the subsidies is to reduce the price parents have to pay.

Playcentres have trained parents leading ECE sessions. They are NZQA qualified. So poor quality cannot be the issue. So why the discrimination? Maybe they just don't fit the funding formula that the Ministry of Education likes to work with? Maybe the parents running playcentres are not union members? In any case in a smart piece of political tactics the National party recently announced that it would bring Playcentres into the mainstream of ECE funding. The question now is whether Labour will at long last do the same?

Income Splitting Discussion Paper misses main point

It shouldn’t really have come as a surprise. The government’s Discussion Paper on Income Splitting couched the issue in terms of what single tax policy is best for families in New Zealand. Almost as if it was Income Splitting or everything else the government is doing.

The real question should have been “Would Income Splitting be a helpful option for parents?” You don’t have to abolish all other measures to introduce Income Splitting.

At the moment we have a variety of welfare payments, income support and Working for Families programmes in place. These cater for most low and middle income families where both parents work. However the group that is visibly overlooked at the moment are at home parents who choose to forego career development and wages or salary to invest in the next generation of New Zealand citizens. Not all of these families by any means are high or even middle income earners. Income Splitting would provide an option of paying tax as a couple rather than individually and thereby recognise the work of the at home parent.

In its recent submission Parents’ Choice ’08 set out some of its reasons for supporting Income Splitting:

Negative impact of overemployment on families: in recent years there has been a growing understanding about the longer term costs of overemployment. Today it is not uncommon for parents to be jointly working 90 hours or more per week. Such absence from the home takes its toll on families.

Large numbers of ordinary NZ families would benefit: Two parent families with children who would benefit from Income Splitting numbered 447,894 in the 2006 census.

Treasury papers have alluded to research which points to the negative impact on 0-3 year olds of having both parents working full time. “Nechyba, McEwan and Older-Aguilar (1999) briefly reviewed a range of studies using the US NLSY that consistently (but not without exception) relate early maternal employment to poorer behavioural and cognitive outcomes during early childhood for most children” http://www.treasury.govt.nz/publications/research-policy/wp/2003/03-26/03.htm
Treasury also mentioned that there was “…some evidence suggests the effects of parental employment on adolescents may be harmful, and may be arise from reductions in parental supervision” (Lopoo 2002, Paxson and Waldfogel 1999) http://www.treasury.govt.nz/publications/research-policy/wp/2003/03-26/03.htm

Many OECD countries provide tangible support and recognition for the work of at home parents without harming their economy. Indeed countries that usually tax couples rather than individuals (such as Ireland, Germany, and Norway) tend to be countries that also perform well in a range of social and economic performance indicators. While there may or may not be a causal link we can say that income splitting does not appear to have hurt the countries economic performance.

National doubtful about Income Splitting

National Party Finance Spokesperson, Bill English,has responded to a letter from Parents Choice indicating that while National would continue to discuss the issue at this stage they did not support it on the basis that under Income Splitting the benefits would not get to the right people.

Parents' Choice '08 will continue to lobby a range of political parties, including National, to promote the value of parenting and to push for Income Splitting as a valuable addition in a progressive tax regime.

United Future's Tax policy released

Last weekend United Future released its tax reform policy. Party leader, Peter Dunne, set out the key elements of the tax policy: income up to $12,000 taxed at 10%; income between $12,001 and $38,000 taxed at 20%; income above $38,000 taxed at 30%; Income splitting for parents with dependent children; Honoraria for volunteers up to $1,000 to be tax free; and Gift duty to be abolished.

Dunne says that United Future has carefully costed the impact of these policies and in a full year, they would cost $4.5 billion. "Looking at the tax cuts alone for a family on $45,000 a year, from 1 October this year, they will get a tax cut of $33 a fortnight. Under UnitedFuture's plans, the same family would get a tax cut of $45 a fortnight. Couple that with UnitedFuture's income splitting plan, and the tax cut rises to $87 a fortnight." Further details are available at www.unitedfuture.org.nz

Parents' Choice welcomes United Future's reiteration of its support for Income Splitting. We also welcome tax relief for kiwi families who are finding it increasingly difficult to cover the cost of fuel and food price rises. We note that the government's Budget tax policies contained $10billion of tax cuts targeted at low and middle income earners. www.labour.org.nz for more details.
We await with interest the National Party's tax reform plan. www.national.org.nz

Congrats to Parents As Partners

Congratulations to "Parents As Partners" - for their TV3 news interview this week. Christine Reymer (Spokesperson) has been a tireless campaigner for Income Splitting over many years. We have set up a link to the TV3 clip from our blog. We encourage you to take a look - esp if you have broadband.

Well done Christine!

Income Splitting Moves Step Closer

Income Splitting Moves Step Closer
Monday, 28 April 2008, 9:55 am
Press Release: Parents Choice '08

Parenting lobby group – Parents’ Choice – welcomed the release of a Discussion Paper on Income Splitting by Revenue Minister, Peter Dunne.

“Parents’ Choice welcomes the release of this document as another move towards the introduction of Income Splitting and recognition of the work of “at home parents” said Chairman, Roger Ellis.

“Income Splitting is the missing element in New Zealand’s tax system. It provides greater fairness for families who would like to have increased flexibility so that at least one parent can spend more time with the children” said Mr Ellis.

“New Zealand has failed to keep pace with recognising the value of at home parenting. More than a dozen OECD countries allow some form of joint tax assessment. New Zealand needs to catch up with the more progressive countries that recognise the value of parenting and allow parents the freedom to choose how they will parent” said Mr Ellis.

The advantages of income splitting go beyond the purely financial. Creating a level playing field for parents to choose whether they wish to be at home with the children, or return to work, could have substantial benefits for children and for society in general. Attachment between child and adult, especially during the first five years, is believed to be vitally important in terms of a child’s development. These factors should also be considered when deciding whether to introduce income splitting.

Parents’ Choice will be canvassing supporters and providing a submission on income splitting. We urge all other parenting groups to make their views known on this very important aspect of tax reform.

Submissions close on June 30th and can be sent to the IRD Deputy Commissioner. The IRD Discussion Document can be found online at:
http://www.taxpolicy.ird.govt.nz/publications/files/incomesplittingdd.pdf

The Parents Choice blog can be found at www.parentschoice08.blogspot.com

ENDS

Income Splitting Moves A Step Closer This Month

Income Splitting moves a step closer to implementation this month with the public release of a Discussion Paper by the Minister of Revenue, Peter Dunne.

Income Splitting is a way for parents to split their combined incomes so that they collectively pay less tax. It is also a way for governments to give recognition to the role of at home parents. If Income Splitting is to win sufficient support in parliament then we need to have as many parents as possible write to their local MPs asking them to support income splitting.

Parents' Choice 08 encourages parents who believe in the value of parenting to also write to the Minister of Revenue and ask for a free copy of the Discussion Paper when it is released. Postage is free. Just write to : Hon Peter Dunne, Minister of Revenue, Parliament Buildings, Wellington.

Parents could use a tax cut too

This week the government cut the company tax rate to 30 per cent - down from 33 per cent.
“Reducing the company tax rate will allow successful businesses to re-invest a greater share of their profits in new technologies and in further building-up the skill base of employees,” Minister of Finance, Dr Cullen said.

“We expect that lowering of the company tax rate will serve to strengthen the competitiveness of New Zealand-based companies, and that is good for the long-term interests of all New Zealanders,” Minister of Revenue Peter Dunne said.

The cut to the company tax rate to 30 per cent is the first time the company tax rate has been reduced in New Zealand since 1988.

Dr Cullen said that the latest initiative is part of the Labour-led government’s economic transformation package that includes the significant moves on depreciation and other business tax measures announced in 2005, tax credits for R&D and changes to the tax treatment of savings vehicles.

It's good to see that many small and medium sized businesses will get some relief through lower taxes. But what about families relying on one main income? Parents Choice is writing to the various political parties urging them to give greater recognition to the plight of two parent families and to allow income splitting for tax purposes.

Support growing for Income Splitting

We have received a tremendous response to our campaign for parenting to be given greater recognition by government. Supporters from across New Zealand - Northland, Auckland, Hamilton, Wellington and the South island have emailed to indicate their support for Parents Choice and to wish us well with the campaign.

We have been asked many questions several times so I thought it would be helpful to cover off a few of them here.

We are not tied to any political party - we are independent. We hope to persuade a range of parties to support Income Splitting at the next election. At the moment only one parliamentary party has indicated its support for Income Splitting and that is United Future. We will be approaching representatives of the other political parties to ask them for their views and to see if they will consider Income Splitting as part of their election year platform.

Supporters have also asked how they can help. Apart from emailing us at parentschoice08@gmail.com and letting us know you support the campaign the next thing to do would be to write to the Minister of Revenue, Hon Peter Dunne MP, Parliament Buildings, Wellington to let him know you support Income Splitting and want to see progress this year.

Other actions that could be taken are to right to your local MP or your local paper, or promote Parents Choice among other parents. We are also considering launching a petition. If you would be keen to help collect signatures then please let us know and we will be in touch.

Income Splitting - An Idea Whose Time Has Come

During the last two weeks Parents Choice has received a significant number of emails and comments from people supporting income splitting and from news media interested in the campaign. The tide is coming in and support is rising for income splitting.

In the past 14 days alone various media including "Norwester", "Challenge Weekly", "Shine TV", "Scoop", and overseas websites have all published articles and news reports about the Parents Choice campaign for income splitting. We have had expressions of support from Whangarei, Auckland, Hamilton, Tauranga, Waikenae, Lower Hutt, Wellington, and Christchurch. It has been amazing to see the widespread interest in a policy change that will show New Zealand values families and the investment of time and effort in raising children.

Please pass on the contact details to friends and relatives who might be interested in indicating their support for income splitting. We need the campaign to continue to gather momentum during March so that by the time the Government's Discussion Paper is relased there is already a strong movement for change. Email parentschoice08@gmail.com and show your support today. United Future has already pledged its support for Income Splitting. We believe that over the next few months National, Labour and other parties will also see the need to signal their support for the hundreds of thousands of full time parents who are busy investing in the next generation.

New Parents Group Wants Income Splitting

Media Statement

Saturday 9 February 2008

New Group Wants Income Splitting For Parents

A new lobby group – Parents Choice '08 – has today announced that it will campaign this election year for tax reform to allow parents to split their incomes for tax purposes thereby recognising the contribution of the "at home" parent.

"Parents want their role to be recognised by society. They are tired of being undervalued simply because they work with children at home" says Parents Choice Chairman, Roger Ellis.

"Income Splitting would allow a parent at home to share their partner's income for tax purposes. This means that a parent earning $60,000 per year could split the income with their partner so that each was taxed on $30,000. This could save the couple up to $123 per fortnight in tax" said Mr Ellis.

"We should not underestimate the importance of children bonding with parents – especially during the early years of development. Families today are being taxed without any recognition of the contributions made by at home parents. If Income Splitting were introduced it would restore some measure of value to at home parenting" said Mr Ellis.

"The pressures pushing both parents to hurriedly rejoin the workforce need to be relieved. Our labour force participation rates are already among the highest in the OECD. Better economic performance will come from higher productivity and improved social cohesion. Income splitting could help make the difference for many families. Families choosing to look after their own children at home should be free to make their own choice as to when they rejoin the workforce. Income Splitting will help them do that" said Mr Ellis.

Parents can show their support for Parents Choice by emailing: parentschoice08@gmail.com or comment via the blog at www.parentschoice08.blogspot.com

ENDS

For information:

Roger Ellis, Chairman, Parents Choice '08
ph: 021 526 264
email: parentschoice08@gmail.com
www.parentschoice08.blogspot.com