KEY POINTS:
Finance Minister Michael Cullen said today that next week's Budget would not see a massive outlay of cash.
In a warning that will further dampen hopes of a personal tax cut, Dr Cullen distanced himself from Australia's budget yesterday, which included $35 billion of tax cuts.
Instead, he again raised the prospect of business tax cuts while also playing down the chance of large spending increases in public services.
Dr Cullen told Newstalk ZB: "There is not any large increase in spending in the core areas, not much more than is sufficient to keep things ticking along.
"There are some new initiatives but not many, not big stuff."
He said New Zealand's economy was very different from Australia's, which was seven times bigger and had key exports such as steel which are not available on this side of the Tasman.
Dr Cullen said he was faced with trying to control inflation and added: "If you give most people a tax cut, they will spend it."
Act Party Leader Rodney Hide said Canberra's budget made Australia even more attractive for investment and immigration.
He said Australia has economic leadership and tax cuts, while New Zealand has a "socialist Government that just wants to tax everyone to death".
National's finance spokesman Bill English said the Government had "missed the opportunity" for tax cuts.
Dr Cullen had had eight years to lower taxes and had decided not to. Now the public would "pay the price for that", Mr English said.
Mr English also said today that National will not support Dr Cullen's request for a Parliamentary Select Committee to carry out an inquiry into monetary policy.
"We won't support a futile talkfest," he said. "When an inquiry was suggested we said it might work if the inquiry would lead to quick, effective policy decisions to reduce pressure on interest rates and exporters.
"However, Dr Cullen has clearly signalled he won't contemplate any policy changes, like slowing the growth of government spending."
Australian Treasurer Peter Costello last night unveiled his tax cuts in a Budget bolstered by a forecast A$10.6 billion surplus and a flood of corporate tax receipts from a booming business sector.
Costello's 12th and possibly final Budget also delivered boosts for health and aged care, education, childcare, the environment and defence.
And ahead of an election which polls indicate the ruling conservative coalition is likely to lose, Costello's largesse further extended to low-income earners' superannuation savings, while forecasting the fund set up to manage the Government's future unfunded superannuation commitments will reach about A$52 billion by June.
- NZHERALD STAFF, NEWSTALK ZB, AAP
