KEY POINTS:
Progressive leader Jim Anderton says middle-income earners should get the biggest tax cuts next year after losing out for several years.
Delivering his own "state of the nation' speech at Orewa last night, Mr Anderton said middle-income earners were those who had missed out on tax cuts so far, and said the thresholds needed to be changed to rectify this.
The Government's Working for Families effectively cut the tax rates for many low and moderate income households and businesses now had tax cuts.
"So when I hear a call for tax cuts, I know it's not those families people are talking about ... The earners who have missed out to date have been those on middle incomes."
Incomes had risen and failing to lift the $60,000 threshold before the higher tax rate kicked in would eventually result in a flat tax.
"With the top rate cutting in at $60,000, for example, there are school teachers paying the same rate of top tax as the CEO of Telecom. That is not fair."
Mr Anderton also said the Government should wipe student loans of those who stayed in New Zealand to work as a way to address both student debt and skills shortages.
It was also an effective way of spending the Government's surplus without impacting on inflation, because the student loans the Government paid out were included in the surplus.
A similar scheme was once given to teachers if they worked in rural areas and there was no reason it should not apply to other professions given the skills shortages.
"It would work like this: after a student graduates they could have their debt paid off by the Government by staying and working in New Zealand. If they wanted to go overseas, they could go and take their student loan with them as they do now."
The Government could wipe a portion of students' work for every year they stayed in New Zealand - "not something for nothing, but something in exchange for your service".
Prime Minister Helen Clark said she had not read Mr Anderton's speech but the Government - which has promised to deliver tax cuts in the next Budget - was working out the Budget.
"We are obviously well under way in looking at what the public purse will stand with the combination of addressing the tax cut issue and other issues. I guess anything else will be put in the mix for consideration."
Mr Anderton also said families should be allowed to capitalise their family support on their first child - such as Working for Families and in-work payments - for a deposit on a house, saying he knew it could work "because that's how I bought my house".
Delivering his state-of-the- nation speech last night, Mr Anderton was following the much-travelled politicians' path of Sir Robert Muldoon, Don Brash and Winston Peters.
His speech was on the same day as that of National leader John Key, who spoke at a hotel in Auckland, having assiduously avoided the Orewa Rotary Club and its associations.
Mr Anderton didn't waste the opportunity to whisper up the ghost of Orewas past. Much of his speech focused on the Treaty and the society divisions it was blamed for. He criticised extremists on both sides of the Maori-Pakeha divide.
He also alluded to former National Party leader Dr Brash's infamous "one law for all" speech at Orewa in which he said he would end any programmes specifically for Maori.
Mr Anderton said Dr Brash's description of "mainstream New Zealanders" was an attempt to set one New Zealanders against another."
Mr Key's speech was also silent on one law for all - even promising that drug and rehabilitation programmes for youth would include"iwi-based services and other services aimed specifically at Maori or other cultural groups".
