KEY POINTS:
Finance Minister Michael Cullen is dangling the promise of "significant" personal tax cuts in the face of voters and has for the first time hinted he might use urgent legislation on Budget night to fast-track the changes.
Dr Cullen, who last year cancelled the infamous "chewing gum" tax
cuts that would have come into effect yesterday, has so far tried to steer clear of over-hyping the cuts he will announce in the election year Budget on May 22.
But yesterday Dr Cullen couldn't resist baiting his political rivals in the House by saying he would deliver a three-year programme of significant tax changes, and they would be bigger than what he had previously offered in 2005.
"I confidently predict that on Budget night, if and when there is - and there will be - legislation to implement tax cuts, National will vote against it, thereby completing its long record on that," he said.
Later Dr Cullen used the word 'significant" and said that his three-year programme would, in each and every year, exceed the changes that would have been in place under his old plan to index personal tax thresholds to inflation.
That plan, which would have cost about $360 million in its first year, was canned in favour of turbo-charging the KiwiSaver scheme in last year's Budget.
It is becoming widely expected that Labour will implement the first round of its personal cuts on October 1, meaning voters have extra money in their pockets just before they go to the ballot box.
Moving to have cuts in place before October 1 would be difficult both logistically and administratively, but not impossible.
The tax cut battle between Labour and National is shaping up to be a crucial issue in the election campaign but both parties are remaining coy.
Dr Cullen has over the past year appeared at some points to encourage speculation about his own tax cuts, and then at other stages to have been trying to talk down expectations.
Yesterday National's finance spokesman, Bill English, said that in the three years since the cuts were announced, the cumulative surplus of the Government had been $25 billion, but Dr Cullen had argued he could not afford the so-called "chewing gum" cuts.
Dr Cullen said Working For Families had helped many, and as many as 500,000 people were now signed up for KiwiSaver.