Cullen planned $1 billion in tax cuts

The Government planned to deliver $1 billion in personal tax cuts at the last budget, but shelved the plan due to fears it would fuel inflation, official papers show.

The papers, issued under the Official Information Act, show the Government last year considered a package of personal tax cuts that would have equalled the $1 billion it spent on business tax cuts, Radio New Zealand reported today.

Finance Minister Michael Cullen repeatedly said last year that planned business tax cuts would have a flow-on effect for some personal rates.

A $1 billion figure was speculated on, but Dr Cullen appeared to get cold feet early this year as domestic inflation remained high with Reserve Bank Governor Alan Bollard issuing several warnings.

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