PM now says tax cuts up to $1500

Prime Minister John Key. Photo / Mark Mitchell

Under fire for not giving voters details of his promised tax cuts, Prime Minister John Key was out on the campaign trail yesterday saying they could be worth as much as $1500 a year per household.

Mr Key and Finance Minister Bill English on Monday said National had earmarked about $1 billion towards cuts aimed at low- to middle-income earners to take effect in 2017, economic conditions allowing.

Mr Key has previously suggested $1 billion of cuts could be worth as much as $500 to $1000 a year to households - figures backed up by tax experts.

He has faced accusations of hypocrisy from Opposition parties for the vagueness of the figures, given his attacks on Labour for not settingout details of its capital gains tax proposal.

Out campaigning in Palmerston North yesterday where National candidate and current mayor Jono Naylor hopes to break Labour's hold on the seat, Mr Key was talking up the significance of the tax cut plan.

"It's easy to say $500 or $750 or $1500 for a household - whatever the number is doesn't matter," he told about 100 staff at Toyota NZ's Customer Centre.

"But I reckon you go out to a lower-income New Zealand household and say $1500 doesn't matter, I think they'd laugh at you, I think it does matter."

Labour's finance spokesman, David Parker, said Mr Key was making up numbers "on the fly".

"His first attempt yesterday was so underwhelming and insulting to the intelligence of New Zealanders he's now trying to juice it up.

"Let him produce real numbers instead of plucking different figures out of the air one day to thenext."

Mr Key later confirmed that the plan to set aside $500 million a year for the next three years to fund the cuts and debt reduction from 2017 would also boost projected Crown surpluses until then.