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National Questions Government Budget Position

Contributor:
Fuseworks Media
Fuseworks Media

National today questioned whether Labour's budget next month would be affected by a below forecast surplus.

Last week Treasury reported that the government's operating
financial balance improved in February but was still well below
forecast.

The balance for the eight months to February 29 was a surplus
of $1.43 billion, $3.34 billion or 70 percent below forecast because of
a lower tax take, investment losses, and a rise in workplace accident
insurance liabilities.

National leader John Key asked Finance Minister Michael Cullen
if the Government was going to stick to the budget policy statement of
$3.1 billion for operating expenditure and $1.5b in revenue reduction.

"If the new budget spend is going to be $3.1 billion and the
revenue reduction is going to be $1.5b, would he confirm that if the
tax package is larger than that it would cut into the new budget
spend?"

Dr Cullen said he would stick to his four tests for tax cuts --
no borrowing, no impact on inflation, they won't lead to greater
inequality and there won't be cuts to public services.

He said whatever the Government did National would offer bigger tax cuts.

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