During his trial, the then 23-year-old admitted the stabbing but claimed he was acting in self-defence.
In their decision last week the board said there had been some promising developments in prison.
"It is fair to say that he exhibited quite a reasonable degree of insight into the effect the murder would have had," the decision said.
"We do have to commend Mr Ataria on a distinct change around in his behaviour. He has been industrious in the prison and he is also an accomplished musician which stemmed from his early days. He has assured us that he wishes to place distance between himself and the gang. He has assured us that he does not wish to return to live in Hawke's Bay."
The board said Ataria did not formally request parole at this hearing, but wished to "build on his rehabilitative work and move to reintegrative activity including, he hopes, work on external grounds and release to work".
"So, there are promising signs but our considered view is that there is still significant work to be done."
Last week McCutcheon's widow, Paula Stoddart, told Hawke's Bay Today she pushed hard to front the hearing, which she said was all about "making Mark proud".
"I didn't go down to Wellington as a grieving widow," she said. "It was more about keeping society safe.
"The reality is that he [Ataria] will be back in the community one day, and I wanted to reiterate to the board how dangerous and remorseless he was, and still is."
His next parole hearing would be in March 2022. However, the board said Ataria had an entitlement under section 26 of the Parole Act to apply for an earlier hearing "should the circumstances justify it".