Finance Minister Michael Cullen says the Government's overflowing coffers are due to good financial management rather than higher than necessary tax rates.

National Party finance spokesman John Key said yesterday the $5.66 billion government surplus for the year ended June 30 was proof New Zealanders were being overtaxed.

His comments followed the release of Statistics New Zealand figures, which showed the surplus was 21.8 per cent higher than the previous year.

Mr Key has attacked Labour's tax policies, revealing that the tax take has risen by 38 per cent since Labour took over in 1999, with the proportion of workers in the top tax bracket rising from 5 per cent to 12 per cent.

However Dr Cullen said today that the surplus had been built on a good economy and a conservative approach to government spending.

"New Zealand has a set of government accounts that is envied throughout the world, and that has been achieved by careful management rather than by an excess of taxation," he said in notes for a speech given to the national council of Federated Farmers this morning.

He said core government operating spending had dropped from 32 per cent of gross domestic product (GDP) in the 2002/2003 financial year to 29.7 per cent of GDP in the year just passed.

Last week Jim Anderton's left wing Progressive Party stunned rivals by calling for a cut in the company tax rate from 33c to 30c in the dollar.

He said New Zealand's corporate tax rate was the highest of any country in the Asia Pacific region and a cut would stimulate business investment.

But Dr Cullen said headline rates did not give the whole picture.

"Tax rates on businesses in New Zealand are lower than in Australia, once the total picture of state and federal taxes and payroll levies is taken into account. And they compare very favourably with other developed nations."

Dr Cullen said yesterday he had not ruled out cutting the corporate tax rate, but that there were other ways to reduce business taxation.

"I consider everything when I do a budget," he said.

"I've never ruled out any changes in tax.

"I have simply suggested there are other ways that we are going to be spending money, particularly to reduce business taxation and they are higher priority."

An example Dr Cullen is understood to be considering is allowing companies to depreciate their assets quicker, with the aim of boosting investment in capital goods such as information technology.