Help for families with newborns pledged

Labour's leader says the party is unashamedly asking the wealthy few to contribute to giving all New Zealand children the best start possible.

David Cunliffe unveiled the first new, major party policies under his leadership during his state of the nation speech in Auckland on Monday.

Labour is promising, if elected later this year, to pay $60 a week to most families with newborns for the child's first year of life. This would apply to any babies born after 1 April 2016.

Families with newborns earning up to $150,000 a year would receive the weekly payment until their baby's first birthday. The party says that amounts to about 59,000 families, or almost 95 percent of children under the age of one.

In the child's second and third years, only families earning up to $50,000 would get the full payment. Families earning between $50,000 and $70,000 would get a portion of the payment, which would reduce the more they earned.

David Cunliffe said Labour wants the policy to benefit most New Zealand families, as it's not just the poorest who are struggling.

"Nobody is going to make a profit on having children. It is extremely expensive for every family and every parent. This will relieve some of the pressure on hard-pressed, middle income New Zealand who are working harder and harder and cannot get ahead under this National Government."

Mr Cunliffe said he didn't want to dictate to parents how they should spend that money. "I think if I was to wade into someone's household and dictate to them what they spend their money on, then you'd be the first person to scream 'nanny state' at me and we're not going there."

The Labour leader said that free early childhood education for three, four and five-year-old children would be expanded from 20 to 25 hours a week.

Early childhood centres whose staff are all qualified would receive more money each year, starting with $32 million in 2015/2016, rising to $36 million in 2020/2021.

Labour would also introduce free antenatal classes for all first time mothers. Mr Cunliffe confirmed the party's intention to extend paid parental leave from 14 to 26 weeks.

Last week, Labour announced it was ditching plans to make the first $5000 of income tax free and exempt fresh fruit and vegetables from GST. Mr Cunliffe said that would free up about $1.5 billion of spending for a Labour government.

Senior government minister Steven Joyce said on Monday Mr Cunliffe is acting as if that means he magically has more money to spend.

"He's pulling the wool over New Zealanders' eyes by suggesting he's got a $1.5 billion a year spending cache to have. It's not there, it never was there, it's not in the budget projections going forward."

Mr Joyce said the real answer to lifting incomes is attracting investment that boosts jobs, growth and people's incomes.

The Labour Party estimates the cost of the policies would be $147 million in the 2015 financial year, rising to a total cost of $566 million a year by 2020.

David Cunliffe's speech in full