26 July 2005
National’s numbers don’t add up
Finance Minister Michael Cullen says National is sinking slowly but surely into trouble of its own making over tax cuts.
“They are still slithering all over the place on timing. First they were going to release their tax policy once the
election date was announced. That went out the window and was replaced with a promise simply to name the date of their
announcement once the election date was known.
“Now that promise has been broken too and voters are told that they will not known the final details of National’s tax
policy until four weeks before polling day.
“But National is in even bigger trouble on a second, more important front. John Key has claimed National’s tax policy
will cost about $1 billion “maximum” a year.
“Yet Don Brash has already announced proposals costing well in excess of that amount. So far National has promised
administratively complex tax rebates for child care [$160 million a year] and interest on student loans [$70 million.]
“Last night, Dr Brash confirmed the package also includes cutting the corporate rate to 30 cents [$615 million a year]
and abolishing the carbon charge [$320 million.]
“That makes a grand total of $1.165 billion – already over Key’s cost estimate, and they haven’t even got to the much
more expensive business of raising thresholds and cutting tax scales.
“National’s policies don’t add up, as more experienced hands, like Bill English, are saying to anyone who will listen.
“The service cuts to pay for all this will have to be massive. Dr Brash’s weasel words about increasing spending are
meaningless. Health alone needs to increase by around $515 million a year just to maintain services.
“National cannot afford to meet the cost of maintaining services and spend big on tax cuts. Even then they cannot
possibly meet the expectations they have created.
“The inexperience is starting to show,” Dr Cullen said.
ENDS