Tax cuts or debt reduction? National confused

National is confused about whether or not it will enact tax cuts, the Green Party said today.

“Prime Minister John Key has dangled tax cuts in front of voters,” Green Party Co-leader Dr Russel Norman said.

“Today Finance Minister Bill English said his position hasn’t changed and there will be no tax cut announcement before the election, but then he added that National will be saying a bit more about it before the election.”

“National seem confused about whether they will announce tax cuts. Is there a conflict between Mr English and John Key?

“Mr English is saying debt reduction is a National priority and there is little fiscal headroom for tax cuts, but they may make a tax cut announcement anyway.

“Budget projections show National is already planning to slash health, education and environmental protection by $3.8 billion over the next three years, according to independent economic consultancy BERL?

“So will National add to the pile of debt already accumulated?

“Treasury's Pre-election Fiscal and Economic Update (PREFU) showed that net debt will rise to $67.9 billion in 2018, compared with $12.8 billion when National came to office.

“In six years of National management, net debt per person has risen to $14,368 from $2,994, so is Mr English suggesting we go further into debt?

“In opposition from 1999 to 2008, National repeatedly called for tax cuts, and had the Labour Government heeded that imprudent advice, New Zealand would not have managed to survive the Global Financial Crisis as well as we did.

“As it was, National irresponsibly passed tax cuts, which mainly benefitted the few, and now we have government debt that leaves little room for an incoming Government to manoeuvre.

“The Green Party has released its fiscals showing it will run bigger surpluses than National plans – and substantially bigger if National cut taxes – and we will pay down debt faster.

“The Green Party is the only major party going into the election with a concrete policy to cut income taxes, but our tax cuts are fiscally neutral because they will be balanced by raising revenue.

“Our Climate Change Tax Cut will benefit 97 percent of New Zealand households, on average by $319 a year, as well as helping the environment.

“That package will also see the company tax rate cut to 27 percent from 28 percent,” Dr Norman said.

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