Jacinda Ardern axes tax increases after books open

The handbrake has been pulled on any plans to offer big ticket election bribes.

The Government's books were opened on Wednesday and there was a surprise in the detail.

This year, there's $2.1 billion in the bag which wasn't expected but after that, the cash starts drying up.

Back in May, these were the predicted surpluses, but now the bean counters reckon there will be less money in the kitty in the coming years - and it's forced some big calls on tax.

National's promised families package of tax cuts which start next year get to stay, however there had been some talk of it dropping an extra, new tax cut to counter the Ardern effect.

But Finance Minister Steven Joyce said Wednesday's forecasts mean that won't happen until at least 2020.

"So no, we don't have plans to do anything significant in that regard," he told Newshub.

And National's used the figures to pile the pressure on Labour, saying it would need to raise income tax on higher earners to fund its plans.

"They could raise taxes but obviously they'd have to raise taxes significantly in one area, or across a number of areas, to be able to meet that, and I don't think they want to tell you too much about that at the moment," Mr Joyce said.

Prime Minister Bill English said Labour seems to be focused on raising taxes but now, after the goading, leader Jacinda Ardern has axed tax increases.

She had earlier been refusing to rule out tax increases on those who earn over $150,000. Now, that's gone.

"It's not going to happen," Ms Ardern said.

"We will not be campaigning on a top tax rate, I've no intention of giving that to the tax working group that we'll be establishing and it's not part of our plans."

So when it comes to tax, if elected:

National:

  • Will have less spending
  • The "Families Package" of tax cuts that come in next year
  • But no more tax cuts until 2020

Labour:

  • Will have more spending
  • No Families Package tax cuts - it will axe them
  • No income tax hikes before next election.

"I'm campaigning here on being Prime Minister in four weeks' time," Ms Ardern said.

"I need to demonstrate that absolutely everything we pledge, we can pay for and we can deliver."

These tax wars have National attacking Labour for planning on bringing in taxes, while Ms Ardern says Labour can fund its promises without changing income tax.

That includes a plan for a major policy to do with student fees or allowance. It's still on the table, although there are no details on how big it will be.

Newshub.

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