Bill English MP
National Party Finance Spokesman

31 March 2008

What about the workers?

From tomorrow, workers should have been celebrating a tax cut, instead they're left wondering whether Labour has forgotten them, says National Party Finance spokesman Bill English.

"Businesses have got their long overdue tax cut, but the workers are still waiting to see their dividend from the nine years of economic growth which Michael Cullen keeps claiming credit for.

"After nine years of record surpluses and nine years of record Labour spending, workers are justifiably angry that Michael Cullen has never been able to bring himself to follow through on his personal tax promises. Even today he is still slithering on the issue."

Dr Cullen recently told a select committee that he believes taxpayers have an 'Oliver Twist' mentality about tax cuts - that they keep coming back for more.

"This is significant, because it shows that Dr Cullen believes that the over taxation Labour collects is his to spend as he pleases, rather than the money of those who actually earned it.

"As businesses celebrate their tax cut, workers facing rising living costs through petrol prices and higher interest rates can be angry that their needs have been sidelined in favour of Labour's election year political agenda."

Cabinet papers from April last year reveal that Dr Cullen was warning his colleagues to run tight budgets otherwise interest rates would be kept higher for longer. They show the 'chewing gum' tax changes were cancelled to pay for other spending.

"Instead of trying to start narrowing the after-tax wage gap with Australia, Dr Cullen's colleagues opted to go on a spending binge which has helped keep interest rates higher for longer - and continues to put pressure on household and business budgets.

"National has consistently argued for a credible programme of ongoing personal tax cuts. They should form part of the normal business of Government in a growing economy."

ENDS

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