Prime Minister Helen Clark and National leader John Key today traded blows over his party's tax package as each sought to sell their economic credentials to voters.

The Government, minor parties and trade unions have lashed National's economic and tax package, saying it does not help low income families, damages the popular KiwiSaver scheme and sets back research and development.

Many in the business sector also said they wanted bolder cuts and mourned the proposal to abolish research and development tax credits to pay for the package, which will give a worker on the average wage an extra $18 a week from April 1 next year.

Incorporating Labour's October tax cuts, by April 1, 2011, an average worker will be $46.50 better off, or $41 better off if they receive Working for Families.

Under Labour's package they would be $32 better off.

Mr Key today defended his package, which he said was a key part of the medicine National would deliver to New Zealand's ailing economy.

He said Labour's research and development tax credits had led to a lot of companies reclassifying existing spending to qualify for the credits, rather than sparking new spending.

He said National was committed to paying for its tax package without borrowing and would run smaller deficits than Labour.

"New Zealanders want economic leadership. That's what National is showing," he said on Radio New Zealand.

Changes to KiwiSaver that dropped the minimum contribution to 2 percent of a worker's wages would enable more people to afford the scheme.

People concerned about the drop in employer contributions from 4 percent to 2 percent could compensate by saving their tax cut through the scheme, Mr Key said.

But Miss Clark said National had "wrecked KiwiSaver" for a few dollars a week more for the average worker.

"They've also wrecked support for a more innovative and higher value economy," she said on Radio New Zealand.

"We have to stand back and say who is offering the best plan for growth and investment going forward for the economy. Without doubt that is the Labour Party.

"There is nothing you have heard from John Key which has shown any vision about where our economy needs to go in the 21st Century."

Miss Clark highlighted that workers on or below the average wage who received Working for Families and were members of KiwiSaver would be worse off under National.

Mr Key yesterday promoted the tax cuts as part of a plan to increase economic growth.

The package includes movement in the tax rate thresholds as well as changes to the actual rates.

There is a tax rebate of $10 a week for taxpayers earning between $24,000 and $50,000 who do not receive Working for Families, benefit or superannuation payments.

An estimated 600,000 people would benefit from the rebate.

The top rate of tax would drop only one cent, from 39 cents to 38 cents.

The cuts would be paid for by reducing the Government's subsidy to KiwiSaver accounts, the removal of the tax credit for research and development and the axing of plans to bolster the diplomatic corps by $350 million over four years.

Mr Key said National would also phase in its expansionary infrastructure development plan more slowly in response to the global economic downturn.

The Greens, New Zealand First, the Progressive Party and United Future all found fault with the proposals yesterday.

They said it wouldn't help families earning less than the average wage and was anti-business. The ACT Party dismissed it as useless and said the top tax rate should have been abolished.