Tax cuts, dollar for dollar, and surpluses all achievable

  • Bill English
Treasurer

Helen Clark is wrong when she says that National's plans for tax reductions and social spending increases will take the government into deficit, Treasurer Bill English said today.

"National's policies mean economic growth of 10% over three years, rising surpluses and falling debt.

"That is why we can afford tax cuts that build further growth and jobs along with social spending.

"There is no question of National going into deficit in the next term of government.

"The $400 million cost of next year's tax reduction has already been factored into the PREFU, as have our plans to meet the dollar for dollar social spending commitment.

"I said that we would provide an extra dollar of spending on social services for every dollar in tax reductions over the next term.

"That commitment is met in the PREFU forecasts.

"Spending on Health, Education and Social Welfare will increase by $1.5 billion between the current year and the third year of the next term of government.

"The Prime Minister and I are confident that the PREFU track means that we can afford to cut the company and top personal rates to 30 cents.

"If for any reason we can't afford to do both, we have made it clear that the company rate reduction is the priority. We need to make sure we stay competitive with Australia.

"Labour doesn't have the choice of cutting the company tax rate. They are embarrassed that, even with personal tax increases, their spending promises mean they can't afford to keep our businesses competitive," Mr English said.