Taxpayers looking enviously at transtasman neighbour Australia, where tax rates will fall again on July 1, seem likely to be disappointed.
From July 1, a New Zealander will have to earn $237,840 before their rate of income tax becomes less than that of an Australian.
In a hard-hitting speech yesterday, Finance Minister Michael Cullen went on the attack against critics of the Government's recent activities, including the buying back of rail assets from Australian-listed Toll Group.
But any prospect of large tax cuts to help offset high living costs were killed in his speech to the Canterbury Manufacturers Association, a week before he delivers his ninth budget.
"It is true that tax cuts cannot be huge, not only because a large tax-cut programme would be irresponsible fiscally, but also because the budget will make it clear that revenue is down on forecast.
"So I will leave my comments on tax cuts to that - reaffirming that they will be responsible and that they will be as fair as they can be to all workers."
Dr Cullen's comments came on the day that retail sales were shown to have fallen substantially in March and manufacturing activity continued to decline.
The weaker-than-expected data saw the dollar drop US0.5c immediately after the announcements.
Government spending on infrastructure, including a high-speed broadband network, remain firmly in Dr Cullen's sights.
"I reject the idea that, at a time when the Reserve Bank is trying to encourage firms to keep investing, the Government should send the opposite signal and halt its investments."
There would be a large injection in capital spending this year, to keep building the public infrastructure that communities needed, Dr Cullen said.
As with the tax relief programme, the Government's plans for strong investments this year would be responsible.
A focus on the future of the economy was at the centre of next week's budget and on improving what every worker was able to get out of the economy, and what they were able to contribute.
Defending the decision to buy back the rail assets for $665 million, he said the constant refrain that the private sector was better at running large enterprises than the public sector was a nostalgic view.
"I am not saying for a moment that the Crown is a superior business operator all the time. . .
But anyone who has seen the resurgence of Air New Zealand, the profits turned by Kiwibank and the efficient operations of our state energy companies will know that we have come a long way since the days of the old New Zealand Railways under Sir Robert Muldoon, when it was used as an unemployment sink."
