Hon Dr Michael Cullen

Minister of Finance

21 February 2008 Media Statement

John Key’s risky tax policy a big surprise to English

John Key’s approach to say whatever he thinks people want to hear completely undermines any economic credibility the National Party might have been trying to build, says Finance Minister Michael Cullen.

“At the same time as reports surfaced of Mr Key promising a massive subsidy to a commercial company and telling a business audience he wants to drive the wages of New Zealand workers down, he has now promised to offer the kind of massive tax cuts that Bill English told the New Zealand Herald five days ago that he would be concerned about.

As the Leader of a major political party, it would be a very serious matter if Mr Key did not immediately issue a statement to clarify what he means when he says that New Zealanders can expect up to $300 a month in tax cuts from National.

“The statement needs to clarify to the people of New Zealand exactly how much the Crown would have to borrow overseas in order to fund such an extravagant amount of largess.

“The statement needs to clarify to every family and business with a mortgage the anticipated additional costs that they can expect to their own debt-servicing, given the huge fiscal impulse that Mr Key is threatening to inflict on the economy.

“It is clear that any government led by Mr Key would recklessly ignore prudent fiscal management, and the price in higher inflation, much higher interest and exchange rates and significantly more overseas borrowing by the Crown, would, of course, have to borne by all New Zealanders,” Dr Cullen said.

Mr Key is quoted on KiwiFm to say: ‘That sort of 2 - 3 hundred dollars a month that we would be delivering to them will make a real difference.”

Mr Key’s comments cut across the viewpoint of his alleged deputy, Bill English who last week warned against expecting too much from National.

ENDS

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