No poll payoff for meagre tax breaks

The meagre tax breaks in last week's Budget have received a similarly meagre endorsement from voters in a Herald-DigiPoll snap survey.

The tax war between National and Labour stepped up over the weekend as National prepares to finalise its own tax policy.

And Labour president Mike Williams told party faithful that Labour was not a "shoo-in".

Finance Minister Michael Cullen said in the Budget on Thursday that the thresholds at which higher tax rates cut in would be adjusted in three years, benefiting taxpayers by between 67c and $10 a week.

In the snap poll of 425 respondents, just 27 per cent were happy to wait three years and 65.2 per cent were not.

And 53 per cent were not satisfied with the adjustment.

A large majority of those polled did not believe they would be any better or worse off as a result of the Budget or that it would improve Labour's chances at the election.

The tax measures have overshadowed other big items such as the KiwiSaver workplace savings scheme for retirement and first-home deposit savings.

National Party finance spokesman John Key was reported yesterday as saying that all tax rates, all tax thresholds or both could be subject to change in the party's tax policy and that they could kick in within the first year of a National-led government.

Party leader Don Brash said last night that the tax policy would be released in a few weeks.

He again rubbished the tax offering in the Budget.

"The Minister of Finance would have been better to do nothing at all than to have done something so pathetic."

He said it would be a lot easier to make a clear distinction between National and Labour policy on tax.

Dr Brash told his party's central North Island regional conference: "We will lessen the burden on hundreds of thousands of middle-income families who, under the policies of the current Government, are taxed as if they are the new rich."

He rejected claims by Dr Cullen that National's policy was headed towards stoking up inflation.

Dr Cullen accused Dr Brash and Mr Key of planning an election "bribe" that would have to be funded from borrowing and that would "inevitably risk higher interest rates".

"The real losers would be the New Zealanders who would end up paying higher interest rates and facing the kind of cuts in social services and superannuation we saw last time National was in power."

Dr Brash, a former Reserve Bank Governor, last night responded: "I spent 14 years of my life reducing inflation. When I started as Governor the floating mortgage rate was 15.5 per cent; when I left it was 7.5 per cent, and I've got no intention of doing something that would drive up interest rates."

Dr Cullen told an Auckland Labour regional conference on Saturday that "we have got them on toast" over tax cuts.

For National to fund tax cuts, either it had to cut core areas of Government spending or it was prepared to borrow to fund them.

Speaking to the conference, Mr Williams stressed the importance of voting.

In the last election an average of nearly 8500 people per electorate enrolled but did not vote.

For some it was due to a language barrier. For others, they thought Labour was a shoo-in.

"We certainly don't look that way this time and that's the message we have got to get through."