John Armstrong: Tax offcut all that Key offers

The Prime Minister has been pushing hard for his party to make a pre-election commitment to tax cuts. Photo / Getty Images

Not so much a tax cut; more like a tax offcut. A mere sliver - and one which will not be finding its way into your wallet for the best part of another three years.

What was John Key's game yesterday in setting out the parameters within which National will deliver a modest tax cut - about $10 a week - to low- and middle-income earners towards the end of the next parliamentary term if the party wins this month's election?

The absence of detail was seized on by National's opponents, with Labour's David Cunliffe branding the announcement as a fizzer in promising "an undefined tax cut for an unclear number of people" and the Greens' Russel Norman turning the joke back on National's leader by saying it was time for Key to "show us the money".

Norman accused Key of hypocrisy, noting National had attacked the detailed fiscal plans produced by his party and Labour. Yet National could not even set out the basics of its tax policy, such as how large the cuts would be and exactly who would be getting them.

But yesterday's announcement was not really about detail, which is likely to change anyway long before the cuts are implemented. It had other purposes.

The Prime Minister has been pushing hard for his party to make a pre-election commitment to tax cuts rather than commit future surpluses solely to debt repayment or extra spending.

Yesterday's announcement was about demonstrating that there will be a dividend for ordinary people from the economic upturn - as long as they stick with National.

It was designed to contrast that status with the new taxes and tax rises being promoted by National's opponents. It was about reaching out to Labour-leaning voters whose household incomes are below the average. National's tax cut would inject an extra $20 into such homes each week.

Key is deliberately confronting such households with what he calls a "stark choice" - more tax under Labour and its partners or less tax with National. National is expected to hammer that theme - especially in its advertising - in the run-up to Saturday week's vote.

Be it going to church services in Mangere, making it easier to catch fish in the Hauraki Gulf or putting the frighteners on low- to middle-income households with regard to the centre-left and tax, Key relentlessly keeps on invading Labour territory in search of any votes that might just - with a bit of prodding - swing National's way. And Labour does not seem to even notice it.

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