Treasurer Bill English said the tax policy released by the Alliance today confirmed that higher taxes for everyone earning over $9,500 would be a key election issue.

"National's tax policy is to lower taxes for everyone earning more than $9,500.

"Over the last three years we have delivered large income boosts to people on low and middle incomes through tax reductions and more Family Assistance.

"Our next priority is to lower the middle income rate to 20c and raise the threshold to $40,000, which will affect everyone earning more than $9,500. Four years ago someone on the average wage would have been paying the top income tax rate on any extra money earned.. By 1 April next year they will pay just 20c on each extra dollar.

"These benefits would not be delivered under a Labour-Alliance government. Instead people have been promised higher taxes, new taxes such as death duties and land tax, and more spending.

"I want New Zealand to be a country where our young people want to stay and build their future. That means we must reward effort and skill and lower taxes send the right message to people who want to do better for themselves.

"Labour is making empty assurances when it says that an increase to the top personal income rate would be the only tax increase a Labour government would tolerate. The Alliance has given no indication that it would be prepared to trade its high tax policy in order to do a coalition deal with the Labour Party.

"The Alliance has big spending plans and that would mean either Labour trading some of its spending promises, deficits, or an agreement to raise more tax revenue. Higher taxes and more taxes are certainly still on the agenda under a Labour-Alliance government.

"In contrast, National's commitment to lower taxes is matched by our 'dollar for dollar' commitment to spend another dollar on health, education and social welfare for every dollar we spend on tax reductions.

"Under a National Government, people can be confident that the social services they value will be protected, while at the same time they will have more of their hard-earned dollars to spend on them and their families," said Mr English.

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