KEY POINTS:
National Party leader John Key claims Winston Peters has let the cat out of the bag over a tax-cut-for-savings-trade-off in next month's Budget.
Mr Key says the New Zealand First leader's comments on TV One's Agenda programme indicate employees in the Kiwisaver scheme are in line for an effective tax cut.
Mr Key says his information is that Labour is looking to ensure the amount workers pay into the voluntary workplace savings scheme is tax free.
Employers who pay contributions into their workers' accounts will get a tax benefit.
On the show, Mr Peters said he was still pushing for wider savings incentives and while the May 17 Budget would not deliver all his dreams, it would be a start. "Some of the good news in the Budget is that there will be a greater savings drive and incentivisation in this Budget," he said.
Finance Minister Michael Cullen's Kiwisaver starts on July 1. Asked if the Budget could possibly introduce compulsion by converting tax cuts into savings contributions, Mr Peters replied: "What is coming is a very sound step in the right direction ... It's not too far away from what we wanted in 1997 on the issue of a significant savings scheme."
Speaking in Sydney, Mr Key suggested the Government was looking to the Budget to help its poll ratings but such a deal meant people who were not part of the Kiwisaver scheme would not benefit.
Mr Peters last night said he had nothing to add.
Prime Minister Helen Clark would not be drawn into any comment on TV One's Breakfast programme this morning.
"I take Budget secrecy very seriously. I never confirm or deny anything," she said.
