Labour leader Jacinda Ardern has rubbished National's proposed tax cuts as "totally irresponsible", slamming them for planning to "raid" the Government's COVID-19 fund.
"I'm just going to call this what it is: I don't think it's responsible and I don't think it's the right time for an initiative like this. We just can't afford it," Ardern said on Friday in Wairarapa.
The National Party is promising temporary tax cuts if elected by increasing the tax thresholds, which it says would put "$3000 into the back pockets of average earners".
The temporary tax cuts, which would last for 16 months, would mean Kiwis earning $50,000 a year would save $893 over that period, while someone earning $70,000 would save $3226.
The policy is expected to cost about $4.7 billion and National plans to pay for it by using the remaining COVID-19 fund, suspending Super Fund contributions, and eliminating the fees-free university policy and KiwiBuild.
"My view is now is simply not the time," Ardern said. "What they have announced today is unaffordable and is raiding from a fund that has to be available to make sure that we as a nation can keep responding to the challenge of COVID."
The Government set aside $14 billion from its $50 billion COVID-19 recovery fund in case the country has to be put into another lockdown. National plans to spend the remaining money on tax cuts and funding its $31 billion infrastructure plan.
National's finance spokesperson Paul Goldsmith said $4.7 billion of the tax cuts would be funded out of the COVID-19 fund, and he also wants to use the fund to pay off some debt.
"We're working on the assumption that we'll be able to use the rest of it to pay off debt," he said. "Obviously if we go into another heavy lockdown we may have to adjust, but we are going to do everything we possibly can to avoid that."
Labour's finance spokesperson Grant Robertson said it's irresponsible.
"It feels to me a bit like it's been done on the fly. This is not the actions of a responsible party. I just think it's clearly been done in a desperate way and I think New Zealanders know that what we need at the moment is stability and consistency."
Robertson said the National Party leadership team has "left behind the considered and moderate approach" that former leaders Sir John Key and Sir Bill English took to the economy.
Ardern said it is "totally irresponsible" of National to be offering tax cuts at a time when "we need to be making sure that we're investing in our services" and that enough money is available to manage COVID-19.
"They are raiding that for tax cuts. That's just not right and it is not the actions of a responsible party let alone a responsible economic manager," she said.
Labour announced its tax policy last week, proposing a new top tax rate of 39 percent on income earned above $180,000, which would raise about $500 million a year - about the cost of building a new hospital.
Goldsmiths said National plans to spend taxpayer money more wisely than Labour.
"We're not taking an axe to new spending; we're taking it from an average of $2.4 billion to $1.8 billion, which I think is what New Zealanders would expect from a National Government - more careful with their spending," he said.
"We'll be focused on getting good results for that spending, that's the critical thing. We back ourselves to be able to be able to get better value out of our $1.8 billion than a Labour Government would get out of $2.4 billion."
ACT leader David Seymour said the country "can't yo-yo in and out of tax cuts", and National Party leader Judith Collins said while it would be nice to keep them in place beyond 16 months, it would depend on how things go with the economy.
The Government opened up its books earlier this week revealing it spent $4 billion less than expected on COVID-19, but debt is projected to reach $200 billion by 2024, which as a share of gross domestic product (GDP) is 55.3 percent.
Stats NZ confirmed on Thursday that New Zealand is now facing its worst recession in living memory, after a second consecutive quarterly loss - a 12.2 percent drop in GDP, reflecting the harsh March and April lockdown period.
Goldsmith said National has ditched its goal of 30 percent debt to GDP in about 10 years, a decision he made after viewing the Government's books.
He said National now plans to get debt to 35 percent of GDP by 2034, compared to Labour which by that time will get debt to 48 percent of GDP.