Bill English MP
National Party Finance Spokesman

30 September 2008

Cullen puts any future Labour tax cuts in doubt

National Party Finance spokesman Bill English says Helen Clark’s promise of a ‘pay jolt’ in education coupled with Michael Cullen’s comments that he is beyond his comfort zone, clearly mean Labour’s future tax cuts are in doubt.

“Dr Cullen has already said the pre election update is ‘beyond his comfort zone’. Alongside Helen Clark’s potentially expensive spending promise, these comments indicate Dr Cullen's fiscal outlook is under pressure from Labour’s urge to spend its way to the election.

“National has structured its credible economic package to take account of the changing international climate. Our tax cut programme will not require any additional borrowing. National fundamentally sees tax cuts as a way to promote growth and provide the right incentives for people to get ahead through their own efforts.

“But worryingly, the recent comments from the Finance Minister have an eerily familiar ring to them. New Zealanders won’t easily forget he cancelled the ‘chewing gum’ tax cuts that were promised before the 2005 election because of Labour’s overspending.

“At that time, Dr Cullen warned that Labour’s big spending plans would keep interest rates higher for longer. He pleaded for restraint from his colleagues, but ended up cancelling the tax cuts with the excuse that New Zealanders weren’t grateful enough.”

Mr English says this shows that Dr Cullen can not be trusted to deliver on any future tax promises.

Mr English says National has long been an advocate of placing more trust in taxpayers to make more decisions with their own money.

“Let’s not kid ourselves. Despite the begrudging election year tax cuts, Labour thinks it can spend taxes better than taxpayers. If Dr Cullen is really outside his comfort zone, it’ll be Labour’s future tax cuts that are first to get the chop.”

Mr English says National will have an ongoing programme of personal tax cuts. It will be a responsible programme, and a transparent programme.

“National will build on the tax cuts due to kick in tomorrow. We will treat them as the first tranche in our tax-cut programme. That will be followed by another tranche of tax reductions on 1 April 2009, and further tranches in 2010 and 2011.

“We will be disciplined with the taxes that New Zealanders pay, and will make more effective use of existing spending, with a clear focus on the delivery of frontline services.

“The same cannot be said of Dr Cullen, who has been a fair weather Finance Minister. He has spent the windfall gains from the commodity boom, but failed to future-proof economic growth.”

ENDS

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