28 May 2002

"A closer examination of the Budget reveals that Michael Cullen's claims of being fiscally responsible are far from the truth," says National's Finance spokesman David Carter.

Mr Carter says despite his claims of fiscal prudence, Dr Cullen hasn't kept within his own $6.125 billion spending cap, and has actually spent $7.015 billion in new initiatives since becoming Finance Minister.

"What he has done to offset this over-spending is impose $900 million in new taxes, and this doesn't include the increase in the top personal tax rate - which is estimated to have raised another $600 million.

"Dr Cullen's not quite as fiscally clever as he's trying to make out. Any Finance Minister can achieve high operating surpluses by huge increases in taxes and that's exactly what he's done.

"However, the bulk of this $900 million in new taxes has come from increases in the tobacco excise and petrol tax. This has hit all households right across the income spectrum, but those on modest incomes have been hit the hardest."

Mr Carter says this makes a mockery of Labour's election pledge to only increase taxes for people on high incomes.

"The upcoming election is simply not going to be about lower taxes versus the status quo. It's going to be about lower taxes which will help get the economy going versus the insidious creep of higher taxes under Labour's management," Mr Carter concluded.

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