Ill-disciplined Ministers cost Kiwis a tax cut

National Party Finance spokesman Bill English says the reason New Zealanders were denied a tax cut in the last Budget is because of Labour Ministers and their ill-disciplined spending.


"Michael Cullen warned his colleagues months before the last Budget that they would have to reign in spending or risk fuelling inflation and more interest rate increases.


"Later, the Finance Minister signed off on a Budget that was nearly a third bigger than predicted.


"So the reality is that he chose to scrap tax cuts and go back on his promised 'chewing gum' threshhold adjustments rather than try to convince his colleagues to be more careful spending the taxpayer dollar.


"According to papers released under the Official Information Act, Ministers in the Government's flagship 'Families Young and Old' grouping asked for $1.6 billion of spending when they'd previously agreed to a limit of $326 million. They also agreed that maintaining or improving services to the public should be a lower priority than coalition deals.


"Having made the decision that staying in power at all costs was more important than improving services to the public, Michael Cullen axed the Chewing Gum tax cuts and denied Kiwis a fair share of his record surplus."


Mr English says Labour's spin that it was KiwiSaver or nothing is a total nonsense, with Dr Cullen himself being reported today as saying 'above-forecast growth in spending had removed some of the headroom for tax cuts'.


"Labour is trying to cover over the fact that no one listened to Dr Cullen when he warned his colleagues to be more disciplined.


"Dr Cullen had a golden opportunity to reduce taxes when the surplus was large and when inflation and interest rates were low.


"With forecast productivity numbers that paint a grim picture for economic growth, Dr Cullen will now be regretting his steadfast opposition to the provision of better incentives for hard working Kiwis to get ahead through their own efforts."