Finance Minister Bill English would not be drawn tonight on whether the Government would cut the business tax rate here following the announcement of a drop in Australia.

The Australian Government announced today it would impose a new 40 percent tax on mining projects from July 2012. The new Resource Super Profits Tax was set to raise about $A12 billion ($NZ15 billion) in its first two years.

In return, the government would cut the company tax rate from 30 percent to 29 percent from mid-2013 and to 28 percent by mid-2014.

These changes were some of those to come out of Australia's Henry Review of taxes.

Mr English said the Government here would deliver a "balanced package" of tax reforms in the Budget on May 20 and he was not prepared to pre-empt that.

However, he said it was important New Zealand's tax system remained competitive with other countries, particularly Australia.

The Government's package would make the tax system fairer, more sustainable and more supportive of economic growth, he said.

Changes in the Australian system had been "on the cards" following the review.

"It reinforces the value of us going through a similar process here over the past 12 months or so as part of a broad review of our tax system," Mr English said.

"We'll be doing what is best for New Zealand and the New Zealand economy."

Australian Treasurer Wayne Swan told reporters the government was under "no illusions" it would be difficult to win support for its proposed changes.

Mr Swan said the new tax would help all Australians share the benefits of a prolonged mining boom, fuelled by demand from China and India, which helped Australia avoid recession during the global financial crisis.

The Australian government also announced an increase in employer-paid pension fund contributions for workers, to 12 percent from the current 9 percent by 2019-20, boosting Australia's $A1.2 trillion retirement savings pool, the world's fourth-largest.