KEY POINTS:
The National Party would consider wiping Labour's plans for new fuel taxes if it came to power, says leader John Key.
Mr Key said yesterday that proposed tax increases related to biofuels, regional petrol tax and the carbon emissions trading system could add up to 25c a litre
to petrol next year.
This was "too high for the average consumer to bear".
National and Labour are under pressure to come up with answers for families battling a series of rising costs - including petrol at up to $2 a litre, mortgage interest rates above 10 per cent and soaring prices for basic foods, among them butter, cheese and bread.
But both parties yesterday ruled out quick fix measures such as cutting existing fuel taxes or dropping the GST on food - a measure advocated by organisers of a petition being circulated outside Auckland supermarkets.
Prime Minister Helen Clark yesterday acknowledged that people were facing economic difficulties, but dropped few hints about what relief might be forthcoming in the May Budget.
However, she did reject United Future leader Peter Dunne's call for income splitting, which she said favoured high income earners.
"Our concern right now has to be for those on low and modest incomes."
The Prime Minister all but ruled out any changes to the GST system.
"We have an across the board system which is generally regarded as being simple to administer," she said.
"That means it is very low on complexity, which means it is low on compliance costs, so therefore there would be considerable reservation about changing it."
A spokesman for Finance Minister Michael Cullen said fuel taxes were now dedicated to the transport budget, and certainty for future planning meant they needed to stay that way. Changes to augment the Working For Families tax credits might eventually be considered, but sustainable personal tax cuts - to be part of next month's Budget - were the Government's main priority.
Mr Key said a National government would cut taxes, do what it could to bring down interest rates, and improve economic productivity.
It would not change GST, but would reconsider the increases in fuel taxes which Labour was planning.
"One of the big issues with GST on food for example, is while it's conceptually a nice idea it is difficult to implement," Mr Key said.
Green MP Sue Bradford said poor people needed an income increase rather than simplistic solutions.
She called for an immediate increase of the minimum wage to $15 an hour, and wage increases for workers which reflected the rise in the cost of living.
