Irresponsible tax cuts put surplus at risk

National's promise of tax cuts before getting the Government's books into surplus is irresponsible, the Green Party said today.

National's promise of tax cuts before getting the Government's books into surplus is irresponsible, the Green Party said today.

ANZ are predicting rapidly falling world dairy prices will reduce the financial earnings of the dairy industry by $5 billion dollars this year - a 2.2 percent hit to GDP.

"Falling dairy prices are putting National's first surplus in doubt, so any talk of tax cuts now is irresponsible and nothing more than a cynical bid to buy their way back into Government," said Green Party Co-leader Dr Russel Norman.

"National has run up over $40 billion of deficits since their first Budget - so must now focus on reducing debt back to safe levels before they promise further tax cuts.

"The EQC fund is empty and net debt has risen from $2,994 to $14,368 per person.

"Tax cuts now are fiscally reckless. National is not managing the economy for the long term.

"We released our full fiscals a month before the election, costing our election priorities, and demonstrating how we will run stronger surpluses than National and pay down debt faster.

"Leaving a significant tax cut announcement like this to just days before the general election highlights what a last-minute cynical gamble National is taking."

Last month the Green Party launched their economic plan to build a smarter, more innovative economy - one that doesn't rely on one or two low value export commodities. The Green Party will invest an additional $1 billion in research and development (R&D), including tax breaks for business.

"Investing in innovation is ultimately the long-term fix for the New Zealand economy, adding value to exports not just more volume," said Dr Norman.

"We can move away from our vulnerability to commodity price cycles but to do so will require a major new investment in innovation.

"Right now, we invest half what most other developed countries do on research and development. We're going to fix that with a $1 billion over three years for businesses to get on with job of innovating and exporting.

"National has failed to diversify our economy and its promise of tax cuts now is nothing more than irresponsible."

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