Prime Minister John Key has made his one and only pre-budget speech, and the victim? Tax cuts.
Mr Key says his government will delay, rather than cancel, crucial steps in National's economic plan. That means tax cuts are officially gone, and will be promised again in 2011.
The recession is biting, but some businesses can still afford prawns as an entrée and steak as a main, all washed down with sparkling water - especially when they want to hear Mr Key's take on the upcoming budget.
Mr Key will delay the tax cuts, rather than abandon them completely, as the government is $7.7 billion in deficit.
He will promise them again in the 2011 election.
"I would be opposed to a cancelation of tax cuts," says Mr Key.
The Government would have to borrow massively to fund the tax cuts. Mr Key says everyone loses doing that.
The Government still plans to spend $1.75 billion of new money in this budget, and two clear sectors will be the winners.
"All I can tell you is there is a substantial amount going into health and education," says Mr Key.
But National will still scale back the rate of increases in those areas seen under Labour, and cut many of Labour's programmes it says are wasteful.
Bill English says some crucial national promises will go head.
"We will still fund the Herceptin promise, and put extra police on the street like we said."
National has no option but to cancel the tax cuts. If it went ahead with them, the Government's deficit would blow out to around $10 billion next year, and for many years to come. That is simply unacceptable to Mr Key and Mr English. Now they must break a crucial election promise and hope voters understand - and do not punish them.
source: newshub archive
