It is easy to picture National's billboards at next year's election. Something like: "Vote Labour if you want more tax; vote National if you prefer to pay less." But more punchy.

The question is how much bite such advertising will have.

Releasing the latest update on the state of the Government's books, Bill English did his utmost to play down any notion that tax cuts will necessarily flow from the increasing Budget surpluses that the Treasury is forecasting from 2015 onwards.

The Finance Minister and his Cabinet colleagues would be neither human nor true blue National disciples if the thought of tax cuts has not crossed their minds.

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You can also understand why they have avoided speculating on such a possibility. English has spent the past five years preaching the virtues of fiscal rectitude. He wants the debate to focus for now on how difficult it will have been for National to meet its target date of surplus by mid-2015 - and how difficult it will be to stay in surplus.

To suddenly talk about tax cuts would send a very mixed message about the need for continued restraint in government spending, while offering Labour considerably more flexibility in terms of being able to promise more in election year.

But with real wages rising only very slowly and interest rate increases inevitable next year, National must be tempted to flag tax cuts for cash-strapped households as a possibility, if still some way down the track.

With Labour promising a capital gains tax and also likely to lift income tax rates for the well-off, tax cuts would differentiate the two main parties in marked fashion.

Despite noting a more positive outlook for the domestic economy in the short term, the fiscal update issued yesterday is also laced with warnings about growth slowing and the fragility of the global economy.

Overall, English will not want to tie himself to future tax cuts without more solid evidence they can be sustained.