Tax cut hopes modest, says poll

By Audrey Young

More people are expecting about $20 more a week from National's yet-to-be-revealed tax cut policy than the $50 Labour has been stating, a Herald DigiPoll survey shows.

National finance spokesman John Key said the results tallied with his reading of people's expectations rather than the "wild numbers" Labour had been mischievously promoting.

He said he had detected resentment over Labour's $300 million student loan policy from blue-collar workers who believed they had to forgo tax cuts to fund the "booze allowance of some student flat".

National leader Don Brash is expected to release the details of his party's tax cuts in about three weeks, contrary to an earlier pledge to release them three days after the election date was announced.

The poll suggests that although one in five New Zealanders expect nothing from National's tax policy, about 30 per cent expect up to $20 a week and only 8.3 per cent more than $50.

Finance Minister Michael Cullen and Education Minister Trevor Mallard have repeatedly said people's expectations were $30 to $50 a week and last night Mr Mallard was sticking to that. He said that would be the sum required for it to make a difference in party support when the election was held.

The poll also shows that education has rocketed up in voters' estimates of important issues and is now rated first equal with health by about 18 per cent of those polled, from 9 per cent in the previous month's poll.

The issue of tax cuts or high taxes was rated most important by 11.3 per cent, about the same as the previous poll and a lot less than the 15 per cent who rated it as number one shortly after the May Budget, which foreshadowed threshold adjustments to come in three years.

Most of the polling was done before the announcement of Labour's student loan policy, which wiped most issues, including tax cuts, off the political agenda last week.

Mr Key last night doubted that the release of that initiative would put pressure on National to advance its tax policy.

He acknowledged what he called "euphoria" by those affected by Labour's move, which promises to abolish interest on student loans for those who stay in New Zealand.

He said people should reserve judgment until National's tax cuts were seen in conjunction with its policy to make the amount of interest paid on student loans deductible against income earned.

Labour's policy sent the wrong messages to young New Zealanders, he said, and encouraged them to "borrow to the hilt" rather than think about getting a holiday job.

Mr Mallard said Mr Key's comment on student "booze" allowances was "interesting seeing John Key had his education for free".

"These people are paying for their education - they're just paying for it without interest."

Mr Key said last night that he was considering releasing an "alternative budget" a few days before National's election launch on August 21. The budget would outline the overall cost of the party policy, but not the detail.

The poll suggested that slightly more people would prefer tax cuts for all workers over targeted assistance to low- and middle-income families, which Labour's $1.1 billion Working for Families delivers.

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