UnitedFuture to focus on income splitting
12 October 2008

UnitedFuture leader Peter Dunne says voluntary income splitting for parents with dependent children will be a priority for the party during the coming Parliamentary term.

Speaking at this afternoon’s UnitedFuture campaign launch in Auckland, Mr Dunne said that parents raising dependent children up to the age of 18 years should have the option of splitting income for tax purposes.

“In the last term of Parliament we released a government discussion paper on how income splitting system could work in New Zealand.

“Public submissions showed over 90% support for voluntary income splitting.

“Now, we want to implement that, but we need the party votes of those New Zealanders who want income splitting to be able to achieve that,” he said.

“According to census data, up to 68% of two parent families (287,000 families altogether) with dependent children under 18 stand to benefit from income splitting because they have either one income, or, a full-time income supplemented by a part-time income.

“At a total annual cost of $370 million if applied to families with dependent children up to the age of 18 years, income splitting is a modest and practical way of supporting these families, especially who do not qualify for the Family Tax Credit or for Working for Families,” he said.

Mr Dunne said that income splitting sends a very strong signal that both parents are equal partners in the running of a household.

“It seems bizarre that current tax law allows partners to split income if they are in a business together, but does not allow them that privilege if they are jointly running a household, arguably the most important business of all,” he said.

Mr Dunne said income splitting is a liberal and progressive policy which treats partners as equals, and respects their choices.

UnitedFuture wanted to see legislation introduced to Parliament in the coming term to provide for voluntary income splitting.