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No tax cuts next year

NZ NewswireNZ Newswire 12/05/2016

New Zealand money. © RNZ / Alexander Robertson New Zealand money. The government has chosen debt repayment over tax cuts in an election year.

"At this point we've prioritised additional debt repayment over setting aside money in budget 2017 for tax cuts," he said on Thursday.

"However, we are still committed to cutting personal taxes over time ... and will consider these when the fiscal situation improves."

The government has previously said tax cuts were a possibility in 2017, and it was believed they would use them as an election sweetener.

Mr English said in his speech to the Wellington Chamber of Commerce that lowering income tax remained a government priority.

"In particular we want to address the higher marginal tax rates faced by low and middle income earners as their incomes continue to rise," he said.

"However, with continuing tight fiscal conditions we don't currently have an explicit provision for tax reduction in the fiscal forecasts."

Mr English said the $1 billion of new spending previously set for his May 26 budget, and the $2.5b for budget 2017, had been rearranged.

"A portion of spending previously earmarked for budget 2017 has been brought forward into budget 2016 in recognition of the additional spending pressures," he said.

Mr English didn't give any further details of the new spending changes.

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