KEY POINTS:
National is still outwardly confident its election-year tax-cut package will impress voters, despite the fact that it has adopted another Labour policy - this time Working For Families - and further restricted the amount of money it has to spend.
National leader John Key yesterday pledged his party would keep the Working For Families tax credit scheme intact if it wins power.
He said the commitment extended to keeping inflation-adjusted increases to Working For Families payments and included the October 1 rises that were announced in May's Budget.
It is quite a turnaround for Mr Key, who has previously labelled the tax credit scheme "a giant welfare package" and criticised the idea of families who earn more than $100,000 a year getting extra government payments.
Prime Minister Helen Clark said today the policy change was "simply incredible".
"Mr Key denounced this policy, he's called it middle class welfare, he's called it making all New Zealand families beneficiaries, he's called it a waste of money and he's said he wouldn't keep it," she said today on TV One's Breakfast programme.
"It comes back to the point - we do not know what this man stands for, if anything, except desperation to win an election. I don't think he can be taken seriously."
National's position on Working For Families had been to commit to the initial stage of it but to try to substitute with tax cuts the second stage Labour announced in the 2005 election campaign.
As recently as last year, Mr Key said he was confident that could be done without making anyone who received Working For Families worse off.
However, it is likely that it would have been extremely difficult for National to design an affordable tax-cut programme that ensured nobody was worse off.
Now questions are being asked about how National will be able to afford bigger tax cuts than the ones Labour delivered in May's Budget as well as everything else, as the Government's books tighten.
"I think this is getting a bit ridiculous," Prime Minister Helen Clark told the Herald yesterday.
"Where does money for much bigger tax cuts come from? Either you've got to borrow for the tax cuts - which we've always said is crazy - or you are heavily pruning existing Labour Government spending."
Mr Key said he was confident that National's tax-cut programme would be well received and "is going to meet our objectives".
"But we're taking a cautious view on the basis that we think it's highly likely that when the Government books are opened six weeks before the election, they'll show a deteriorating financial position.
"We're taking that into consideration, the weakness we can see in the economy."
Mr Key said that when people see National's tax-cut programme, which has now been designed and will be released in the first week of the election campaign, they will see that "we've made some clear choices".
Working For Families is the latest in a series of reversals by National, which continues to lead Labour by a big margin in the polls just three months away from the election campaign.
National has now moved to adopt - or neutralise - interest-free student loans, the nuclear-free stance, ownership of Kiwibank and other state-owned enterprises, the New Zealand Superannuation Fund and Working For Families.
During a recent trip on the road with Mr Key to Hawkes Bay, the Herald observed members of the public telling the National leader they could not afford to lose their Working For Families payments as the cost of living rose.
It is likely that this public opinion played a huge part in the party leader's turnaround, and he indicated as much yesterday.
"Despite concerns we hold about the system, I consider that offering people certainty is much more important in these tough economic times," he said.
Finance Minister Michael Cullen is set to try to make political capital out of the u-turn in Parliament this week.
A statement he issued yesterday suggested the line of attack would include the question of how National will pay for all its promises.
"John Key's numbers are simply not adding up," Dr Cullen said.
Act leader Rodney Hide said National's move emphasised there was nothing between the two big parties.
"It's consistent with their strategy," he said. "They agree now with everything Labour has done, and the only thing they disagree on is who should be Prime Minister."
- with NZPA
