PM raises little hope of tax cuts

Prime Minister Helen Clark has indicated she is sceptical about the benefits of tax cuts, but is refusing to rule them out.

She yesterday cast doubts about the ability of tax cuts to improve savings levels.

"If tax cuts come at the expense of loading more expenditure on to the ordinary family for their health, education and everything else, no, of course it wouldn't (help increase savings)," Helen Clark said.

Asked if she was ruling out tax cuts, she replied: "I've never ruled anything in or out and I'm not going to today."

The Prime Minister indicated she was still aiming for a September election and despite a steady lead in the polls was not taking anything for granted.

She will start the parliamentary year with a statement that will also be her opening salvo in the election campaign. Her speech to MPs will be a "big picture" speech setting out Labour's long term programme.

It comes a week after National Party leader Don Brash opened the political year with a speech attacking welfare dependency.

The Prime Minister will cover the introduction of a streamlined single benefit system that would help move people from "dependence to independence".

The Government is keen to paint itself as having the policies to improve economic performance, health, education and infrastructure.

Helen Clark will also outline plans to help women back into the workplace as well as help people save for housing, education and retirement.

The Association of University Staff predicted that the Government was moving toward funding private insurance schemes or saving accounts for tertiary students.

Association general secretary Helen Kelly said private savings for tertiary education would erode the idea that education is a public good.

"Adequate funding is a state responsibility and the Government's priority should be to properly fund tertiary education."

Helen Clark said her speech would not go into detailed policy as final decisions were still to be made by Cabinet.

After her opening statement, Dr Brash will respond and is expected to attack the Government's Maori policy, while promoting welfare reform and tax cuts.

Helen Clark expected Dr Brash and National would get some support from voters after his speech on welfare reform advocating getting more solo mothers off benefits and back into work.

"Visibility in itself can make a difference...It would almost be a miracle if it didn't register," Helen Clark said.

"But at the end of the day we are eight months out from a general election, people are looking where they want the country to go and who has got the set of policies to increase our wellbeing," she said.

- NZPA