Key wary of real tax cuts; they won’t get him re-elected

John Key

As Key noted on Newstalk ZB on Monday, the call for tax cuts is not as loud now as it was when he was National’s finance spokesman 10 years ago. In fact the only such “calls” heard today are merely questions from media interviewers who think tax cuts are a sure-fire election winner.

They are not. A promise of tax cuts did not win an election for National in 2005, it merely caused the Labour Government to make a counter-offer of interest-free student loans.

Talk of tax cuts for the next election has already caused Labour to announce it will instead make tertiary education free for everyone for three years. That announcement did not make much impression on the polls. Today’s voters are not easily moved by blatant election bribes that damage the country’s fiscal balance.

While he welcomed a surplus to June of $1.8b, three times more than forecast in May, Finance Minister Bill English sounded wary of the political temptations. He said he planned a “responsible” Budget next year. The measure of that will be the rate at which the debt comes down.

He must make the most of the good years while they last if the economy is to withstand the next squall the world sends its way.

There will be talk of tax cuts if  the surplus continues, but no cuts will be announced pre-election.  The talk will be just enough carrot to bring those who want tax cuts across to vote for National because Labour will, by definition, need more taxes to pay for all their spending promises.

But in reality National have not delivered tax cuts yet.  And they are not likely to.

There is also a new mood that there is a genuine need to look after our nurses, teachers and police.  They have been doing more on less for some time, and rather than giving money back to rich pricks, there is a need for a fair shake of the sav.


– NZ Herald