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Next Round Of National v Labour Tax Cut Competition

Fuseworks Media
Fuseworks Media

National leader John Key today said his party
was not committed to outbidding Labour on tax cuts but thought it
highly unlikely Labour would offer more.

His comments were jumped on by Labour as a flip flop.

Speaking on Agenda on TV One, Mr Key was asked if the party was committed to outbidding Labour.

"Well I don't think we should say committed, all I said was it's highly unlikely that Labour is going to out tax cut National."

However, National did not know what Labour was planning.

"...their record indicates that they've had nine years of
wanting to cut taxes and the only tax cut they've ever had they
cancelled, so maybe they will have a rush of blood to the head and
decide this their big priority, but you know I think it's unlikely."

He said it was possible Labour would spend $2 billion on the
cuts; "this is a desperate Government that will now be reckless with
whatever they do, so they might not only spend $2b, they will throw the
kitchen sink and the microwave and the rice maker at this particular
budget, because they're trying to buy a fourth term."

Finance Minister Michael Cullen said Mr Key was "slipping and
sliding" on his position and Prime Minister Helen Clark said Mr Key's
comments were "flip flop, flip flop, flip flop".

Dr Cullen said Mr Key had to amend his position because it looked as though he would offer cuts whatever the consequences.

"I think what it was was he was getting questioned about why
he's made it look as though it didn't matter what would happen, they'd
be bigger, so he retreated and that (is the) kind of confusion that
we've got to know so well from Mr Key -- that when he comes under
pressure the story starts to change."

He said it would be hard for National to back away from tax as a key election plank after talking it up for so long.

He believed National would outbid Labour at the expense of
social services and without worrying about the impact on interest

Mr Key told Agenda his party was committed to ongoing personal
tax cuts and intended to make significant savings controlling

Meanwhile, Dr Cullen said the tax package was not yet finalised
as he was awaiting updated forecasts. Cabinet would consider the" broad
shape" of the package tomorrow.

The Government was also hoping to "refresh" its working for families policy.

"Looking forward over the next term, I might hope that at some
point we might be able to do something in that regard. Of course,
again, it's very expensive but clearly the real value of those kinds of
moves tends to go down over time unless you do some refreshing."

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