Brash to unveil proposals on tax cuts

National Party leader Don Brash will today promise to revamp the tax system so people have more incentive to work harder.

He is also expected to flag a tax cut for every working New Zealander in his first Budget.

But he is likely to emphasise that the scale and scope of National's initial tax cut will depend on economic conditions prevailing at the time.

He will also stress any substantial cut in tax rates will take more than one term in government to achieve.

Although he will argue that the present Budget surpluses allow plenty of scope for reductions, his speech on Auckland's North Shore will not provide any firm detail of exactly when and by how much National will cut tax rates, whether corporate or personal.

Today's speech - part of National's recovery plan after a slump in its poll rating - will instead focus on why tax cuts are necessary rather than the exact form they will take.

In particular, Dr Brash will argue that present Government policies, especially Labour's Working for Families income assistance package, are destroying the incentive for people to work harder because families are being hit with high effective marginal tax rates as their incomes increase.

National has previously foreshadowed an immediate cut in the company tax rate from 33c in the dollar to 30c, while saying any personal tax cuts would be targeted first at low-to-middle-income earners rather than those on the top 39c rate.

The final details of its policy are now not expected to be unveiled until after the party has seen revenue and other forecasts in next May's Budget.

In the past few weeks Labour has come under increasing pressure from other political parties to reduce taxes.

Even its left-wing partner, the Progressives, has called for a cut in the company tax rate.

Finance Minister Michael Cullen has resisted calls for tax cuts but hinted at more generous treatment of other areas, such as depreciation and savings schemes.