By Andrew Laxon
political reporter
Act promises to cut taxes to a top rate of 20c in five years without reducing Government spending.
Finance spokesman Rodney Hide said his party would keep income tax at 15c in the dollar on income up to $9500 a year and gradually introduce a new rate
of 20c on any income above that.
The party would bring the top 33c rate of personal and company tax down by 3c a year for four years and then by 1c to 20c in 2004.
Act would also sell TVNZ, which it estimates would fetch $1.6 billion - $1.2 billion higher than its book value of about $400 million.
It would cut out all spending set aside for future initiatives, which Act describes as the Government's "slush fund."
And it would spend $1.2 billion of the $3 billion predicted as a surplus in 2004.
Act estimates it would lose $3.7 billion in tax revenue by 2004, partly offset by saving $2.7 billion in "slush-fund" spending.
Mr Hide said Act's plans were based on Treasury estimates and made no allowance for a higher tax take from increased growth, jobs and investment.
He estimated the tax cuts would create 80,000 jobs, based on calculations for the Inland Revenue Department by tax specialist Dr Patrick Caragatta.
But Act's costings were attacked as unrealistic yesterday, even by would-be coalition partner National.
Treasurer Bill English said the only time the Government had ever held spending was the unpopular 1991 "Mother of All Budgets."
"This is the party who's campaigned in the rural areas in the King Country [during last year's byelection] about saving hospitals ... Well, you're not going to do that on a fixed health budget, that's for sure," said Mr English.
"We're very sceptical of the idea that you can just hold Government expenditure from year to year."
The Minister of State Services, Simon Upton, who attacked Act's tax cuts last week, said: "A flat tax of that rate would mean significant expenditure cuts and I think Act has to spell that out."
Labour finance spokesman Dr Michael Cullen said the futureinitiatives fund was used for essential things such as drought relief and the military mission to East Timor.
He said the 82 per cent of taxpayers who earned below $40,000 would not get an extra cent out of Act.
"They would pay in the form of reduced social services so that Act could give the Prime Minister a tax cut of over $450 a week."
Alliance leader Jim Anderton said: "To give all this money away without doing anything for the 190,000 people on hospital waiting lists, the 250,000 people owing $3 billion in student debt or the 213,000 jobless shows appalling greed."
