KEY POINTS:
Finance Minister Michael Cullen's eighth budget on Thursday is almost certain to cut the corporate tax rate from 33 per cent to 30 per cent, but other key parts remain a mystery.
The cut in corporate rates has been well signalled, as have other sweeteners for business, in a package said to cost $1 billion a year once they came into effect in 2008.
While the Government has ditched the idea of tax credits it will still be doling out money to encourage exports, increase skills and invest in research.
Dr Cullen has refused to confirm the company tax cuts, but the expectations are now so widespread their absence would provoke a backlash from business.
Any chance of wide ranging personal tax cuts has been ruled out because of inflation.
Even if Dr Cullen wanted to makes cuts - and he has never shown much inclination to do so - an injection of cash into people's pockets would only keep interest rates higher for longer.
Dr Cullen no longer talks about the need to look at cutting personal tax rates to match a company rate cut in order to remove the increasing motivation to avoid tax.
Despite this there may be some personal tax relief elsewhere in the budget with confirmation of plans to adjust tax brackets for inflation.
In 2005 Dr Cullen's offer to increase the level of earnings at which people moved into higher tax rates was met with almost universal derision and since then Dr Cullen has refused to say whether he will go ahead with the move.
If he does not address the problem now, someone else will have to in the future or eventually most of the workforce will be in the top tax bracket.
Indexing the thresholds had been estimated to put between $35 and $534 a year into taxpayers' pockets and would cost an estimated $360m in 2008/09.
Among the other areas the budget may target, speculation has centred on whether there will be further incentives to join the workplace savings scheme - Kiwisaver.
This speculation was fuelled by New Zealand First Leader Winston Peters suggesting there would be some sort of tax incentive, but Dr Cullen has kept his mouth closed on the subject.
Many Labour supporters are hoping that Dr Cullen has some surprises up his sleeve.
Labour has been struggling in the polls and the last thing it needs now is to look like it has run out of ideas.
Dr Cullen has said whatever he presents on Thursday will not see a massive outlay of cash, just enough to "keep things ticking along".
The big ticket items will be health and education as it is in these areas the money will be absorbed without causing a ripple.
Dr Cullen's eighth budget will be similar to his past seven with a lot of time explaining how the Government has more money than it expected and why the economy has not gone as badly as Treasury predicted.
Numbers out last week showed the operating surplus was running well ahead of forecast and Treasury is likely to lift its end of year forecast to a surplus of $7 billion or more.
Dr Cullen's cash surplus -- which is what he has left after spending, investments and loans --was also up to $2 billion.
So while Dr Cullen has cash to spare, much of the budget could be an explanation of why he can't do anything much until next year - which of course is election year.
- NZPA
