17 May 2011

National has kept KiwiSaver promise - PM

10:33 pm on 17 May 2011

The Prime Minister has rejected accusations the National-led Government will break its pre-election promise by cutting KiwiSaver tax incentives in the Budget on Thursday.

John Key told Parliament that National has kept its promise and people will able to pass judgement on the proposed changes when they vote in November.

Question Time was a boisterous affair on Tuesday, with Mr Key the main target of the Opposition.

Labour Party leader Phil Goff asked Mr Key whether he believes he has kept his promise on the workplace savings scheme.

Mr Key said he has - but there is nothing wrong with a political party changing its policy for the next election.

The Prime Minister said changes to be introduced in the Budget will not come into effect until after the November election, so voters will have the chance to have their say on the matter.

Key promises responsible Budget

The Prime Minister says an improved set of Government accounts will be revealed on Thursday and it will be a balanced and responsible Budget, not a traditional election year one containing more spending.

Cost-saving changes to KiwiSaver, Working for Families and student loans have already been indicated.

Mr Key says if the Government sat back and did nothing, it would stay in deficit until the 2016-2017 financial year and debt would hit 34% of gross domestic product (GDP).

The Prime Minister says the Budget will continue the drive for efficiency in the public sector.

However, he says Treasury forecasts indicate wages will grow faster than inflation, which could mean pay increases of 4% to 5%.