Cullen v Key – Tax cuts to get the cut by underground

Michael Cullen’s announcement yesterday that the books were in a bad shape was seen cynically (although probably rightly) by most as an attempt to undermine John Key’s much hyped to be released tax cut policy. Now in light of the realisation that the country’s coffers are in deficit, Key has scaled back the proposed tax cuts his party will offer. I’ve said it many times on this blog that I don’t really grasp the ins and outs of economic issues, most people don’t, but I cannot help but see Cullen’s announcement as a godsend for Key. National have made great gains against Labour, not by promising impressive detailed policy but by Palinesque sloganeering. For some time National has placed their flagship tax cuts at the forefront of the agenda and following the budget have promised larger tax cuts than those Labour has penned in. And the voters have lapped it all up, despite no details. Now, with the global economy going all 1929 on us, tax cuts of the size people were envisaging from National are not affordable. And Cullen’s little trick gives National every excuse to scale down their proposed tax cuts. And if voters question the quality of the election bribe from the party in the blue corner, National can say it is all Labour’s fault. And the voters will lap it up.


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