Jacinda Ardern has confirmed the Government will not introduce tax cuts, despite revealing a $5.5 billion surplus.
"We clearly came in after the last election saying we did not believe now is the time," the Prime Minister told The AM Show, reflecting on axing National's proposed tax cuts last year.
"We had things like pay rounds we had to deal with and pay equity to deal with," she said, adding that the Government opted to introduce its families' package instead.
Now, despite revealing books flush with cash, Ms Ardern has confirmed there are no plans for the Government to introduce tax cuts any time soon.
This might be because the Government is currently in pay negotiations with both teachers and police, having finally settled the nurses' pay offer dispute in August.
On top of that, the Government is under pressure to reduce the excise tax on petrol after prices soared to new records. A nationwide petrol boycott has been planned for October 26.
So how about those tax cuts?
When Labour axed National's proposed tax cuts last year, it did not go down well with the Opposition.
National MP Judith Collins called the Government "miserable" for taking away tax cuts National legislated for before the 2017 election which saw Labour return to power in a coalition with the Greens and NZ First.
Under the cancelled cuts, a person earning $52,000 a year was in line for $20 a week extra in their back pocket. But Labour promised to can that if it formed a new Government.
"Instead, we put in the families package which is over $5 billion that we put into low and middle income households through targeted Working for Families increases," Ms Ardern told The AM Show.
The $5.53 billion package is made up of three core components: Working for Families tax credit increases, a payment for newborns called Best Start, and a new winter energy payment for beneficiaries and pensioners.
The entire package was aimed at lifting Kiwi kids out of poverty, with the changes coming into force from July 1, 2018.
But National finance spokeswoman Amy Adams said it was a classic Labour approach of tax and spend, and said 1.7 million families are worse off having missed out on tax cuts.
And now that the Government has revealed a $5.5 billion surplus, there have been calls to have that money filter back into the pockets of New Zealanders - especially since they missed out on tax cuts promised by National.
But Ms Ardern told The AM Show the Government will not be using surplus money to fund the likes of pay increases, saying it's "not a pot of money that's just sitting waiting to be spent."
She pointed to the Government's $57 billion of debt - an amount that's "relatively low compared to others," but still a "significant amount".
With protests against rising fuel prices and primary teachers mulling further strike action, Ms Ardern will be feeling the burden of easing the financial woes of those Labour has traditionally pandered to.
Newshub.
