KEY POINTS:
Labour's personal tax cuts will contain "something for everybody" but may not be very large, according to Finance Minister Michael Cullen.
Prime Minister Helen Clark used the Labour Party conference to unequivocally commit to personal tax cuts and to Dr Cullen being the minister to bring them in.
"I am sure that there will be something for everybody," Dr Cullen said yesterday.
"But I think, as I have often said, that in doing that it means that individual amounts are not likely to be large given that money spreads fairly thinly."
Helen Clark also said that Labour had thought of introducing across-the-board tax cuts for the 2005 election but had not received the advice from Treasury it now had - that the Government's surpluses are "structural," not one-offs.
National Party leader John Key said Labour had over-taxed New Zealanders for eight years.
"At some point they were always going to wave the white flag and it was always going to be in election year.
"We need to see the size and shape of their tax cuts because their idea of a tax cut and the New Zealand public's idea could be a completely different issue."
If the cuts were too small, Labour would get the same reaction it got to the so-called chewing gum budget in 2005, and if they were large, they would undercut the arguments Labour had mounted against National's policy of tax cuts over the past eight years.
National's tax-cut policy last election would have given on average an extra $45 a week to workers.
Dr Cullen promised tax cuts in 2005 through adjustment to tax thresholds - they were to have taken effect from April next year - but cancelled them in this year's Budget.
They were to have benefited taxpayers by between 67c a week and $10 and to have cost $535 million by the 2011 financial year.
Interest will focus not only the size and shape but the timing and whether the tax cuts may begin to take effect before the next election to avoid claims it may renege again.
Dr Cullen said no decisions had been taken on size, shape or timing.
But he said final decisions were likely to be taken at the end of the Budget planning, in early April.
He also discounted any likelihood of adding an additional rate but would not comment on whether threshold adjustments were favoured again.
He said he had been advised soon after the Budget
Helen Clark said on TV One's Agenda that she had wanted across-the-board cuts in 2005 but did not have the advice to support it.
"This issue is one that I personally and the whole Cabinet and Government would like to have addressed some time ago."
She said that Labour's continuous surpluses had sometimes seemed like a "curse" rather than a blessing.
"We have learned so far into financial years that things were going better than we were ever being told that we were left looking like we were hoarding a surplus for the fun of it rather than being able to make more strategic decisions at an earlier stage."
Mr Key said blaming officials for Labour not delivering tax cuts earlier was "vintage Helen Clark."
Dr Cullen said he had had a "heads up" a few weeks ago that the forward revenue forecast in the December Half Yearly Economic and Fiscal Update would be revised upwards.
Dr Cullen made cautionary comments, however, about the macro-economic effect and concern of the Reserve Bank.
"My message for my colleagues is that is doesn't mean to say the floodgates are open on the spending side because if that happens that will take away the capacity to do anything on the revenue side."
Dr Cullen also gave no indication there would be action on a remit passed at the conference backing a union call for the total buy-back of Air New Zealand. It owns 76 per cent at present.
"I think that would be a very low priority for the Government."
