KEY POINTS:
National leader John Key believes tax cuts on employee contributions to the KiwiSaver scheme will be the Budget's "big, deep, dark secret" and could be worth $1 billion.
He has also listed National's own economic priorities, including tax cuts, substantial investment in infrastructure and a 90-day trial period
for workers in new jobs.
KiwiSaver, a voluntary workplace saving scheme where employees elect to contribute 4 or 8 per cent of their gross salary, comes into force this year. People starting a new job from July 1 will automatically be enrolled and have eight weeks to opt out.
The Government is providing a $1000 contribution as a sweetener to new savers and paying some scheme fees to improve the returns.
Employer contributions to employees' KiwiSaver schemes will be exempt from tax, subject to a cap of 4 per cent of the employees' gross salary.
Mr Key was asked on TV One's Agenda programme about rumours employees' contributions to KiwiSaver could be tax-free.
He said he expected the "big, deep, dark secret in the Budget" would be tax changes to employee contributions.
"When you think that it costs around $300 million, I think, for the changes on the employer side and not all employees are matched, that could be a very big number coming out of this Budget.
"I wouldn't be surprised if it's the better part of a billion dollars ... cost to allow New Zealanders to pay in either 4 or 8 per cent on a tax-free basis which is, I suspect, what Labour are going to do."
Earlier, Mr Key told the party faithful in Palmerston North that "real" personal tax cuts would be top of the list in National's first budget.
Private and public investment in roading and infrastructure, competition in ACC, and 90-day trials for workers in new jobs are also included.
Mr Key said that in the lead-up to the 2008 election, he would keep coming back to three themes - the economy, education and the environment.
There were 10 things that would be in National finance spokesman Bill English's "first Budget".
An ongoing programme of personal tax cuts would put money back into the pockets of hard-working New Zealanders trying to get ahead under their own efforts. There would be a substantial investment in infrastructure across public transport, roading, telecommunications, water and energy.
"This investment will involve initiatives from both the private sector and the public sector."
Amendments to the Resource Management Act would be progressing through the House when that first Budget was delivered.
There would be policies that delivered the "right incentives for people to choose work rather than welfare".
National would have a programme to reintroduce competition to ACC, he said. Immigration policies would ensure the best migrants were able to come here to meet the country's needs.
- NZPA
