KEY POINTS:
A comment about future tax cuts from Associate Finance Minister Trevor Mallard has been attacked by National as evidence that Finance Minister Michael Cullen is on the way out.
Mr Mallard told an Australian journalist that there was growing pressure for personal tax cuts in New Zealand, and he had "no doubt that it will be addressed in the next Budget".
He went on to say that he favoured making tax cuts by moving the thresholds at which certain rates kick in, rather than by lowering the rates themselves.
Mr Mallard yesterday said his comments were "nothing new", and Dr Cullen had already said that he expected to outline the future shape and timing of personal tax cuts in next year's Budget.
But the interview still drew attention in Parliament yesterday as National used it to suggest that Mr Mallard and Dr Cullen were at odds on the issue.
"Which finance minister should we listen to?", National's finance spokesman Bill English asked.
Dr Cullen would not comment on whether threshold adjustments or rate cuts were the best way to deliver personal tax cuts, but said a lot of work would be done on that between now and the next Budget.
Asked if he agreed with Mr Mallard, Dr Cullen said: "I'm not agreeing with any particular change."
He added that there is currently no formal Government view on how to change the taxation system, and that Mr Mallard's comments were an expression of his views as a senior government minister.
While the spat is not major, it could be seen as unhelpful at a time when Labour is trying hard to suggest that National's leader John Key and Mr English are split on several issues.
Instead, now National has an opening to claim the split is between Labour's senior figures rather than its own.
Mr English said Dr Cullen had repeatedly rejected National's policy to lower taxes by claiming it would mean cuts to public services.
"Trevor Mallard clearly doesn't share that view," Mr English said.
Mr Mallard countered by suggesting that National's highlighting of the issue was just a case of Mr English trying to cover up his differences with Mr Key.
Bickering about tax also spilled over yesterday about the possibility of scrapping a tax break for landlords, something Dr Cullen has been saying needs further investigation but which several other political parties are sceptical of.
National yesterday pulled out a speech made by Dr Cullen before the 2005 election in which he told property investors that Labour's position on the taxation of property was that the status quo was adequate.
Dr Cullen also said in the speech that any new form of property tax was off Labour's agenda.
Asked what had changed since he made that speech, Dr Cullen said there had been two years of continuous increases in the property market, increasing interest rates, a high dollar and a suggestion by the Reserve Bank and Treasury about additional tools to help the Reserve Bank control inflation.