KEY POINTS:
Finance Minister Michael Cullen says personal tax cuts will help provide relief to families struggling with high petrol and food prices.
Dr Cullen has promised to deliver the cuts in his May budget.
National leader John Key accused the Government this week of doing too little to help families as the economy slows due to a weakening housing market, drought and the global credit crunch.
But Dr Cullen today defended the Government's economic record, saying it had already delivered business tax cuts, tax cuts focused on savings and tax credits for families with children.
It would go one step further in the budget.
"The budget's programme of personal taxation reductions will, I hope, offer some relief from those high international oil and food prices that are hurting families' weekly budgets," he wrote in an opinion piece in today's Dominion Post newspaper.
Dr Cullen reiterated he believed there would be some flow on to the New Zealand economy from an expected recession in the United States.
There remained a slim possibility of a "technical recession" - small negative growth across two quarters - in New Zealand, but he believed it was unlikely to occur.
He said the Reserve Bank was still forecasting year on year growth of around 2 per cent over the next two years.
The opinion piece followed Dr Cullen yesterday clarifying his comments on the likelihood of a recession.
On Tuesday, he said it would be foolish to rule out the possibility of a technical recession in the face of the cooling housing market, a drought in some parts of the country estimated to cost farmers $1.24 billion and the international credit crunch which was pushing up interest rates.
That led Mr Key to accuse him of irresponsibly "talking down" the economy.
But Dr Cullen said he was merely stating the obvious. While a technical recession could not be ruled out, that did not mean he believed it would actually happen.
Dr Cullen yesterday said the US economy was in a far worse state than the local one.
"The US economy is facing a much more serious prospect. They are seeing the credit crunch really hitting quite hard. We've seen a significant bank going under. There's no threat of any of this in New Zealand."
In Parliament both sides sought to gain political advantage with Labour accusing Mr Key of trying to talk down the economy in the past.
- NZPA
