Hon Bill English MP
National Party Finance Spokesman

19 December 2006

Christmas cake for business, crumbs for the workers

Finance Minister Michael Cullen has announced a billion-dollar tax cut for business, but after nine years of a Labour Government, wage and salary earners will still have had no tax cut, says National's Finance spokesman, Bill English.

He is commenting on today's Half Year Economic and Fiscal Update, which shows the Government will give $1 billion in company tax cuts in 2008 and still have a surplus more than $1.5 billion higher than previously expected.

"The Government's books are in good shape because of consistently large increases in tax revenue.

"But Dr Cullen has missed the best opportunity in a generation to return the benefits of economic growth to wage and salary earners.

"When the economy is slower, Dr Cullen says tax cuts are unaffordable, and when the economy speeds up, he says tax cuts are inflationary.

"The result is that he is sitting on a pile of cash he can't spend or give back in tax cuts.

"Under his logic, New Zealanders will never see personal tax cuts, no matter how healthy the government's books.

"Dr Cullen has painted himself into a corner because his big spending habits guarantee inflation will stay high and make interest rate increases likely.

"The average household now faces the possibility of interest rate hikes because of Dr Cullen's big spending habits and a nine-year Labour Government that is giving its first billion in tax cuts to business.

"Labour's supporters must be appalled at the scale of Dr Cullen's economic mismanagement."

ENDS

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