Government has 'no intention' of giving tax cuts - Robertson

Source: 1News

Finance Minister Grant Robertson has signalled there will be no tax cuts as part of this year's Budget and said National's idea of giving Kiwis tax relief would only see inflation increase even further.

The cost of living has increased by more than 11.5 per cent in the past four years.

The rate of inflation in the December 2020 quarter to the December 2021 quarter was at 5.9 per cent - the largest annual increase in more than 30 years, according to a Statistics New Zealand report released in January.

In a State of the Nation speech on Sunday Luxon announced National would cut taxes if in government.

READ MORE: Luxon calls on Govt for tax relief as cost of living soars

He called for Robertson to adjust the bottom three income tax thresholds at the upcoming Budget 2022 “to account for the inflation we’ve seen in the last four years under Labour”.

“The average Kiwi family is worse off than they were 12 months ago and the Government needs to act,” he said.

However, Robertson said the Government had "no intention" of giving tax cuts.

"I think tax cuts right at the moment would be the most inflationary thing that a government could do," Robertson said.

"What we've got to do at the moment is support New Zealanders through the increases in cost of living by making sure that we do see wages lift and we do lift benefits so the most impacted people are helped out. Those kinds of policies from National will just fuel inflation and ultimately mean there'll be less money to invest in health, education and housing."

Robertson also disputed Luxon's argument lower earners would benefit, claiming tax cuts would see the highest earners get the biggest tax break.

"There are difficult choices to make when you're in government. The National Party seem to think they can reduce debt, cut taxes and increase spending. You can't do all of those things at once, it just doesn't add up," Robertson told 1News.

"I certainly accept that the majority of New Zealanders are seeing the price of things going up, but that's mainly driven by things that are happening overseas. Everyone can see that the oil prices have been rising and now the Russian invasion of Ukraine will make that worse.

"We're doing our best to support those on the lowest incomes to get through this, but these inflationary forces are mostly being driven offshore."