Working for Families may be cut, confirms Key

5:57 pm on 2 March 2011

The Government is looking at cuts to the Working for Families package to help pay the costs of the Christchurch earthquake, Prime Minister John Key has confirmed.

On Tuesday, Finance Minister Bill English refused to rule out cuts to Working for Families and to interest-free student loans. Mr English said a range of options was open to the Government, including partial asset sales, to help pay for rebuilding Christchurch.

Mr Key says the Government is reviewing all spending to see where savings can be made.

He has warned the country faces tough economic times and predicts the rest of the country will grow but the Canterbury economy will contract.

He says that, taking this into account, Treasury is expecting the national economy not to grow at all in the 12 months to June.

Political parties warn National over quake funding

Political leaders, including a government minister, have warned against using the earthquake as an excuse to push through unpopular policies.

Labour, the Greens and one of the Government's support partners, United Future, all say now is not the time for playing politics.

Revenue Minister Peter Dunne, the United Future leader, says the earthquake should not be used as an excuse for the Government to take any action for which it did not receive a mandate at the last election.

Labour leader Phil Goff says the Government could consider delaying some building projects in other parts of the country to free up money for Christchurch.

However, ACT says New Zealand is now in a completely different position, and needs to make some radical decisions about government spending.