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Clark Abandons Credit Card With Tax Backdown

Helen Clark's announcement that Labour would consider scrapping its tax increase to do a deal with Winston Peters throws into doubt her personal commitment to delivering on Labour's core campaign promises, Treasurer Bill English said today.

"All year Labour has said it is prepared to raise taxes in order to pay for its credit card commitments.

"These credit card commitments were the core of Labour's campaign. Labour MPs, the Alliance, and those who would benefit from the spending had assumed up until now they were non-negotiable.

"In a week where Ms Clark announced she would be talking about fairness, she has now announced she is willing to trade off her tax increases for higher income earners against spending commitments to superannuitants, students, and state house tenants.

"Ms Clark's unseemly haste to deal with Winston Peters even before the election must appal her caucus and her supporters who have always thought her commitment to higher tax and more spending had re-established Labour's principles.

"This announcement from Ms Clark is also going to be a real test for Jim Anderton, who is bending over backwards not to get off-side with Ms Clark.

"It's a bit tough for the Alliance who have had to listen to Labour belittle their influence all year. Suddenly Winston Peters has been able to persuade Ms Clark to put her key commitments on the table. Will Winston Peters or Jim Anderton decide Labour's tax policy?

"The other outcome from today's announcement is likely to be further delays to Labour's pre-election budget. Dr Cullen cannot now rely on higher tax revenue to fund the credit card promises, let alone the 176 other items on Labour's 'B' list of uncosted promises," said Mr English.


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