KEY POINTS:
Finance Minister Michael Cullen has said there will come a time for personal tax cuts, but only when the economic situation allows it.
Dr Cullen has been under pressure to reduce personal tax rates or lift the threshold at which people move into higher tax brackets, and he disappointed some when plans to inflation-adjust the thresholds in 2008 were dropped.
Some political commentators have been suggesting that Dr Cullen's resistance to the idea of tax cuts has become a liability for the Government and he may be pushed aside at some stage.
Yesterday Dr Cullen told a post-Budget briefing that he did believe tax cuts would come. "There will be a time for personal tax cuts as fiscal and economic pressures ease," he said.
"In the current circumstances, deep personal tax cuts would substantially worsen the imbalances we are experiencing ... " Dr Cullen told the business audience his May Budget had promoted policies to smooth out the imbalances in the economy.
The enhancement of KiwiSaver would encourage more saving and less spending, with other policies taking demand out of the economy.
- NZPA