National attacked from both sides after Brash does u-turn on tax

Labour and Act yesterday became unlikely allies as they jointly accused National of doing a u-turn over tax cuts.

It followed a speech by National leader Don Brash in which he said that while his party was committed to lowering taxes, it might take some years. He stressed that National had other priorities including "effective public services and strong public institutions".

National went into the last election promising significant tax cuts during its first 18 months in Government, and worth $9.4 billion over three years.

Finance Minister Michael Cullen yesterday accused Dr Brash of "slithering" - saying his "u-turn today proves that last year's big election tax-cut bribe was nothing more than a hollow promise".

"We told the electorate the country could not afford $11 billion of tax cuts over three years. We said they were reckless. We said public services would have to be slashed.

"National [has] now realised that voters want quality public services - the very thing that Labour has been delivering for three years."

Act leader Rodney Hide said he was "bitterly disappointed, but not surprised" by the speech. Both main parties were now telling voters they would get tax cuts, but were refusing to tell them when.

"National no longer offers any meaningful alternative to Labour. it's no wonder that the two big parties have given up debating on policy."

With economic conditions worsening, National has been downplaying the prospect of making the same size promises again.

Dr Brash said yesterday it would be "grossly irresponsible" to make promises about the size and timing of proposed cuts two years out from the election. However, he said National would spell out its plans before the next election.

It was unfair to compare National to Labour, he said. "They've been in power seven years and have not cut one tax and increased a lot of taxes. We're committed to reducing tax rates.

"The Labour Party said during the election campaign that National would have to cut the guts out of health and education spending in order to finance the tax cuts.

"The point I was making in that speech is we value public institutions ... we are not going to cut the guts out of those things, but despite that we believe we can reduce taxes."