Careful words leave little wriggle room

BY VERNON SMALL

OPINION: The detail is still begging in many areas, but John Key's speech opening Parliament was impressive in its scope.

We may not know the ultimate destination, but the speech sketched out a map of how he intends to get there - even if what he is planning is going to go down in some quarters like a glass of polluted water at a Green Party convention.

Make no mistake, despite the careful language, October will see a big revamp of the tax system with GST hiked to 15 per cent and a change to property tax rules that will fund generous personal tax cuts - far more than $20 a week - for most middle and high-income earners.

The $4 billion package will siphon about $1.7b from the property sector, through changes to the depreciation regime on buildings, along with $2b in extra GST. That will fund tax cuts across the board, but especially to the top 38 cent personal rate, which is likely to fall to at least 33 cents.

There should be enough left for a cut to the corporate rate too - though there was no mention of that in the speech yesterday.

The prime minister's language was all about "carefully considering" a move on GST, but a backdown is impossible now that he has raised the possibility and risked the political fallout.

Beyond tax, there are enough nudges and winks to indicate there is a very National agenda in the pipeline for 2010.

It includes big changes to welfare, a rethink of labour laws, matching state housing to need, private management of two prisons, and further education and health reform.

Some conservation land will be unlocked for mining, with a levy to fund conservation elsewhere.

Green co-leader Russel Norman rightly skewered as "Orwellian" Mr Key's claim that the levy meant more mining would actually improve the natural environment.

But whether you like his plan or not, Mr Key will have shed his "do nothing" label if the May 20 Budget manages to turn his words into actions.

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