Bill English MP
National Party Finance Spokesman

8 November 2007

Cullen continues contortions on tax

Just last year Finance Minister was threatening to 'quietly drown' MPs promising tax cuts off the back of New Zealand's strong surpluses, says National Party Finance spokesman Bill English.

"I wonder if he passed on that insight to the Prime Minister before she tried to claim that Labour's so-called conversion to tax cuts was because the surpluses were structural rather than cyclical.

"Dr Cullen has stated categorically that in his view there is no connection between tax cuts and surpluses. As far back as 2000 he was receiving advice telling him the surpluses were structural. He even told his own colleagues that.

"Now, he is trying to claim that he's been a secret supporter of tax cuts the whole time. It's absolute bunkem and everyone knows it."

The Budget Policy Statement, signed by him on 8 December 2000 reads: 'projected operating surpluses are structural, not just cyclical'.

The 'Beehive Bulletin', dated 6 April 2001, states 'Finance Minister Michael Cullen says the Crown Statements ... show the Government is easily meeting all of its fiscal targets and is running a structural surplus', while a copy of his Budget speech from 2001 that said: 'Because revenues are trending above spending, the structural surplus is rising'.

And just last year when the operating surplus was $11.5 billion, he said 'anybody who thinks there are large fiscal surpluses to be spent now by means of large tax reductions should be taken out and quietly drowned'.

Mr English says Dr Cullen has zero credibility on tax cuts and he will never be wholeheartedly behind them.

"The only personal tax cuts Dr Cullen has promised were cancelled because New Zealanders were not grateful enough for them. How grateful will New Zealanders have to be about getting more control over their own money before an over-taxing Labour Government actually delivers?"

ENDS

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