Power Play - The National Party is preparing to march straight into traditional Labour territory with Thursday's Budget.
The package has to be significant in dollar terms for the people it is targeting - low and middle income earners. Photo: RNZ
There will be a significant package aimed at raising the incomes of low-to-middle-income earners, and it is no coincidence this will be the jewel in the crown of National's election-year Budget.
The package has to be significant in dollar terms to make a difference to the people it is targeting. The lower the income, the more money the government has to forfeit for any tax or Working for Families payments for those families to notice a difference.
In the past National has been painted as the party of the rich. But now it has healthy surpluses to play with it is turning its attention to people who, even though they might be working, were still struggling to pay the bills.
It would also be hoping to use the family-focused package to deflect criticism of the government's approach to poverty, deprivation and inequality in New Zealand - issues that have gained momentum in the last few years.
The debate about housing affordability continues to dog the government and the high cost of accommodation - whether that is for a rental or owning a home - is an integral part of the financial challenges facing many New Zealanders.
At the heart of the package Finance Minister Steven Joyce is expected to present in his debut Budget will be changes to tax thresholds for the lower bracket and increases to Working for Families thresholds, giving more families access to the tax credits.
The advantage of that mix is it will directly benefit families on lower incomes, including those in the welfare system, as benefit payments are still taxed.
The disadvantage, politically, is that everyone paying tax, including those on the very highest incomes, will end up paying less tax.
The accommodation supplement, a subsidy provided by the government, is somewhat problematic.
While it goes directly to the individual, there is a concern among some politicians that any increase goes straight to landlords, who can just bump up the rent after any increase in the supplement payment and pocket the difference.
Such an increase could well feature in the package however, given the intense focus on the cost of accommodation.
Another interesting aspect of this package will be when it would come into effect.
Do not be surprised if there is a start date of 1 April 2018, placing it front and centre of September's election campaign.
That would put the onus on Labour to either accept the package (and the hefty price tag), or explain to many people it would view as core constituents they would not get the income relief they would under a National government.
National's family package has also brought much of Labour's election year financial planning to a halt as it cannot make final decisions without seeing the result of the Budget.
It has pricey plans of its own, that will have to be balanced against the spending commitments made in the Budget and the political considerations of either rejecting or embracing the families package.
The government has been busy clearing the decks in past weeks with a relentless roll-out of pre-Budget announcements, including for housing and infrastructure, to ensure the focus will be firmly on the families package.
On the eve of the Budget, Prime Minister Bill English deployed the usual approach of refusing to say whether there would be any surprises on the basis it would no longer be a surprise.
As Finance Minister, Mr English used to mark Budget Day with a meat pie - maybe it will be a sausage roll for Mr Joyce as he looks to stamp his own mark as Mr English's successor.
