8 Oct 2008

No plans by minor parties to scale back promises

10:08 am on 8 October 2008

Parliament's smaller parties do not plan to scale back their policies despite the dire state of the Government's books.

Treasury has forecast a Government cash deficit this financial year of almost $6 billion, rising to $7.3 billion by 2013. It said the operating deficit was $31 million this year and would worsen to $3.2 billion in five years time.

Finance Minister Michael Cullen warned that all political parties now have to be realistic about what they are promising voters in the run-up to the election.

The Maori Party wants GST removed from food and any income below $25,000 to be tax free, both of which would have significant impacts on the tax take.

The party says these will be subject to negotiation after the election, though co-leader Tariana Turia says they are still policy goals.

The Green Party wants more money spent on infrastructure, such as public transport, which it says will actually save money in the long-term.

Co-leader Jeanette Fitzsimons says that money could come out of existing transport funding, by spending less on new motorways and more on public transport.

United Future leader and Revenue Minister Peter Dunne says the temptation to promise big spending policies must be avoided, but there will be no significant changes to the party's policy platform.

United Future's policy of income splitting, which would apply to couples with dependent children, would allow each partner to be taxed as if they had earned half the household's income, meaning they would be taxed at a lower rate.

Mr Dunne says that would cost about $400 million a year, but would produce other savings. He says the party's policies are negotiable when it comes to coalition arrangements.