National's tax cut mixed message

Last updated 12:50 25/08/2014

Prime Minister John Key says National is crunching numbers to see what sort of room there is for future tax cuts.

John Key Bill English
THINKING ABOUT IT: National's been doing the sums on potential tax cuts, according to leader John Key.

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National is sending mixed messages about whether it will offer voters tax cuts ahead of next's months election.

Finance spokesman Bill English last week flatly ruled out an announcement on a possible tax-cut package ahead of polling day. He was speaking at the pre-election economic and fiscal update (PREFU).

However, campaigning in Auckland today, National's leader John Key said the party was crunching numbers "to see what sort of head room we've got."

"If we can say a bit more definitively about that, we will, coming into election day."

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Reminded of English's comments, Key said that the finance spokesman was "talking about an actual package of x and y. If you go and ask him the other question - 'will we talk about the outline of what might happen?' - you've got a different answer."

It had shades of Key's pre-Budget comments, which took English by surprise in May. Key told reporters there may be income tax cuts for low to middle income earners, sparking months of speculation.

Yesterday Key would not rule out adjusting income thresholds. "I can't rule out what the package might look like when we one day get there."

Asked if there would be an announcement rather than a package, Key said: "Possibly, but that's a good description."

Treasury numbers don't give National a lot to play with.

The surplus is wafer thin at $297 million, down from $372m in the last forecast, and equivalent to just 0.2 per cent of total economic output.

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