Recommended.co.nz | Guide2.co.nz | Voxy.co.nz | Gimme.co.nz
Homepage | login or create an account

Cullen Reveals What Isn't In The Budget

Contributor:
Fuseworks Media
Fuseworks Media

Finance Minister Michael Cullen won't reveal details of the tax cuts in his May 22 budget but he has ruled out some of the options.

Those are a tax-free income threshold and cuts to GST, he told the Institute of Chartered Accountants yesterday.

Dr Cullen again played down the size of the cuts in his three-year plan.

"We will not announce huge tax cuts," he said.

"We will not buy into media spin that a big bang budget is vital to electoral success when delivering such a budget would be a recipe for economic failure."

Dr Cullen said he thought about a tax-free income threshold of $9500 but when he worked it out he found it would have only minimal benefit.

That was because 90 percent of those earning below $18,000 were on temporary low incomes -- students and youths -- or were supported by benefits.

He said he had rejected calls for removing GST on food and petrol because it would make the system inefficient, while across the board cuts would give the most assistance to those who had the most to spend.

Dr Cullen said his tax cut package would be "as fair as possible to all workers".

About guide2.co.nz : money

Find the latest money news and 'how to' guides on Guide2Money.

Ask our researchers your personal finance questions.

Your Questions. Independent Answers.