KEY POINTS:
Like it or not, the Government may have to expect a small measure of public scepticism about the timing of the proposed tax cuts announced last weekend.
Some people may well accept the Prime Minister's assurance that she and her caucus wanted to deliver tax cuts earlier but "we have never had [Treasury] advice that made it possible". Very probably some people believe in a flat Earth and Santa Claus, too. But there is likely to be a hard core of non-believers who dimly discern a connection to the fact that next year is election year.
Labour had no choice, of course. National, comfortably ahead in the polls, has been rattling the piggy bank for some months now and Michael Cullen's public image has slowly but steadily transmogrified from careful steward to tightfisted Scrooge. The chorus of voices calling for tax relief has steadily grown in size and volume. It was time to move.
Clark's claim about Treasury is at best misleading. Its briefing to the re-elected Clark Government in 2005 explicitly stated that years of fiscal frugality had left the Crown accounts, and in particular the debt ledger, in such good shape that there was room for tax cuts. Cullen famously dismissed that advice as "an ideological burp", but, having just got hold of the purse-strings for another three years, he could afford such dismissiveness. With Labour trailing in the polls less than a year out from the vote, he is more disposed to largesse.
Making the announcement now is a double-edged sword for Labour. It constitutes an admission that National's tax promises, so far unquantified, are not necessarily unaffordable. But it makes it possible for the Government to ring in the changes in, say, September and go into the election as the party that did something, rather than just promised to. Pre-election announcements of the new regime would also allow the Government a PR blitz that would act, but not count, as campaign advertising.
The situation as it stands does make it more likely that the campaign could turn into a bidding war for votes. Let's hope it does not come to that. There will be too many other issues at stake more important than a contest about whose tax cut is bigger than whose.
