After Bill English cancelled promised tax cuts the PM is now making hints of tax cuts in election year.
Prime Minister John Key has signalled National will campaign in 2017 on a $3 billion package of tax cuts.
Last week Finance Minister Bill English ruled out offering tax cuts in this year’s Budget and said it was not currently in the plan for the 2017 Budget either, although that could alter.
Speaking to Mike Hosking on Newstalk ZB this morning, Mr Key said tax cuts had been ruled out in the short term because it was a choice of spending $1 billion on tax cuts “to deliver very small amounts” or spending that money on healthcare and other areas.
However, he signalled National was working on a more substantial package of cuts for 2017. “We are not ruling that out for 2017 or campaigning on it for a fourth term in 2017, but having a bigger one, to be blunt, than $1 billion.” Asked how much was needed to deliver meaningful tax cuts, he said: “$3 billion, I reckon.”
It sounds like it will be achieved by changing thresholds to counter fiscal drag.
While there was not enough in the Government books for that at present, he expected that to change as the surplus built up.
He said it was possible to put that to the voters without it being dismissed as pork barrel, saying at some point tax thresholds had to change to take account of increasing wages.
“The average income is going up and we think in a few years time the average income will be $68,000. Well, the top rate cuts in at $70,000. If you don’t adjust thresholds over time you get to a point where the average income earner is paying the top threshold.
That can’t be right.”
It would be right if Labour ever got in. They love socking people with increased taxes.
I can’t wait for Labour to oppose it.
– NZ Herald
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