John Key. Photo Getty
Prime Minister John Key said one of the choices that
today's Budget surplus would present was the possibility his
party could promise tax cuts in the campaign for the September
He even suggested any tax cuts could be aimed at middle New
Zealand which "pays a fair bit of tax and often doesn't get a
lot in return".
Finance Minister Bill English wanted his first surplus Budget
to be seen as one that was about "maintaining growth in the
economy and sharing the benefits".
"It is a Budget from a Government that knows what it is doing
for a country that knows where it is going."
Mr English will unveil his first surplus at 2pm when he
delivers his sixth Budget and further surpluses into the
Mr Key said the surpluses, which were "not enormous", could
be spent on other areas of need, and National had not yet
made any calls on that.
"As we go into the campaign we will want to think about what
we are campaigning on if we are in the position to have a
third term, so all decisions will have to be in the next four
and a half months."
A Budget surplus has been forecast since Mr English's first
Budget in 2009 in the midst of the global financial crisis
but it was a very distant goal. In 2011 it was brought
forward to 2014-15.
The last forecast in December put it at $86 million, with a
$1.6 billion surplus in the following year, then growing to
$3.1 billion, and $5.6 billion.
When Mr Key talked last month about the possibility of tax
cuts in future years, he said "little is the operative word"
and yesterday he described them as "conservative". He
confirmed that it remained the Government's goal to get debt
to under 20 per cent of GDP by 2020.
That has also been National's trigger point for resuming
contributions to the Superannuation Fund started by Sir
Other claims on the Government's discretionary spending will
be for pay rises for public servants, and extra funding for
government services, especially health and education.
Mr English yesterday said the tens of thousands of public
servants who had provided greater services to New Zealand in
a time of restraint could take credit for the surplus.
Labour leader David Cunliffe said any headroom the surpluses
created for National could be used by Labour.
He would not rule out tax cuts. Labour plans to increase the
top tax rate of 33c on income over $70,000 and plans to
introduce a capital gains tax, exempting the family home.
He said today's Budget was the sixth opportunity for Mr Key
and National to show they have a "plan to provide
opportunities for all, not just for big business, big noters
and the big end of town". "To date it has been politics as
usual for the National Government, delivering tax cuts for
the top few per cent, redistributing public assets to the
privileged and doing special deals with foreign corporates
and wealthy donors."