BUDGET 2014: PM's tax cut comment catches English on the hop

Bill English

Tax cut comments by Prime Minister John Key appear to have caught Finance Minister Bill English on the hop.

The PM says there will be no tax cuts in this afternoon's Budget.

But, speaking last night, he added that he expected increasing surpluses, plus the government achieving its aim to get debt below 20% of GDP by 2020.

"So there are options for that additional expenditure, and they would obviously be spending by the government," the PM said at a stand-up in the Beehive.

"Or, alternatively, returning that through some sort of tax programme."

Mr Key said middle-New Zealand was an obvious group which paid a fair bit of tax and did not get a lot in return.

The PM agreed it was possible National would go into the election campaign with a tax cut promise.

When the possibility of a National tax cut promise was relayed by media to Finance Minister Bill English, he brushed it off as "speculation." When told it was Mr Key who raised the issue, he joked that he always agreed with his leader. The government's first priority would be to use projected surpluses to pay down debt, he said.

Mr English has already flagged that this afternoon's Budget will project a small surplus for the coming year.

It will also include around $1 billion in new spending, most of it earmarked for education and health, according to comments by the PM on Monday.

The PM has also hinted there will an extension to paid parental leave.

Budget 2014 will be delivered this afternoon. See NBR from 2pm for full coverage and analysis.

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