Key Points:

Finance Minister Michael Cullen has gone on the attack as National threatens to hijack his crucial Budget week by hinting it will offer much larger tax cuts than Labour is expected to dish out.

Dr Cullen yesterday called journalists to his office as he tried to discredit statements from National Party leader John Key suggesting National's election-year tax cut offer might be worth as much as $50 a week.

It is possible Dr Cullen's tax cuts - to be announced on Thursday - could be worth about half that figure, and yesterday he criticised Mr Key as "reckless" for making such statements when he hadn't seen the Government's revised fiscal forecasts.

"He's just plucked it out of the air," Dr Cullen said.

"He's shown an inability to be careful about issues which are actually pretty important."

Mr Key's comments appeared to suggest he is keen to come up with a tax cut programme similar to the one he had as National's finance spokesman in 2005, when cuts of $10 to $90 a week were offered to taxpayers.

A lot is riding on Dr Cullen's tax cut package, which will be a three-year programme that he plans to legislate for on Budget night.

Passing legislation immediately will allow him to say the tax cuts are locked in - something he admitted was needed after small changes he announced in 2005 were later canned.

"The difficulty we've had obviously with the 2005 announcement is that we didn't legislate," Dr Cullen said.

"Other priorities took charge after that - I think people want an assurance this time that those cuts are put in place."

The Treasury has put aside $1.5 billion in the Government's accounts for personal tax reductions and the Reserve Bank has also factored a package worth that amount into its thinking on interest rates.

But as the economy turns gloomy, worries about inflationary pressure stemming from tax cuts appear to be subsiding.

Dr Cullen yesterday said the Reserve Bank might well want to revise its views on that in light of changing circumstances in the economy.

Asked if there was room for bigger tax cuts without worrying about inflation, Dr Cullen was coy.

"I could not possibly say that at this point. I'll say it on Thursday afternoon."

Speculation about the likely size of Dr Cullen's tax cut programme centres around $2 billion, stretching to maybe as much as $2.5 billion.

One measure he appeared to rule out was a one-off lump-sum payment - or so-called 'social dividend' - to taxpayers that could be issued with tax threshold adjustments or rate changes.

Dr Cullen said speculation about that had "no basis at all".

The tax cut battle looks to be heading down a similar path to previous years, although the difference is that Dr Cullen is also offering cuts.

Arguments centre on how much is too much, and how much will lead to cuts in social services such as health, education and superannuation.

Dr Cullen said Mr Key should wait for the Government's new fiscal forecasts to see what can actually be done.

"He'll find there isn't a lot of room left after Thursday afternoon."