3 Sep 2014

Key pledges tax cut details next week

8:10 am on 3 September 2014

National Party leader John Key promised to announce more details of tax cuts for low and middle income earners next week, as he criticised Labour's financial management.

John Key and David Cunliffe square off in the second leaders debate of the 2014 Election.

John Key and David Cunliffe square off in the second leaders debate of the 2014 Election. Photo: Fairfax NZ

During The Press leaders' debate in Christchurch last night, Mr Key said National would produce big enough surpluses to allow it to cut taxes, while accusing Labour of making big spending promises.

Mr Key had intended to announce the broad outline of tax cuts on Monday but delayed it because of the tragedy in Ashburton.

During the debate, he and Labour leader David Cunliffe disagreed over which party would manage the government's finances better.

Mr Key was confident about National's financial management, telling the almost 700 people gathered that it would maintain and grow surpluses, pay down debt and continue to reduce ACC levies.

He said when it made its economic policy next week it would show there was some room for modest tax cuts for middle and low income earners.

The debate covered off all the main policy areas and, of course, Mr Cunliffe was asked what he would do to restore confidence in New Zealand's elected representatives.

He said it would run a full commission of inquiry into what has gone on in former Justice Minister Judith Collins' office.

Mr Cunliffe said Mr Key's inquiry was so narrow it did not include Cameron Slater's email, which was the reason that Ms Collins resigned, and that made it a joke.

Mr Key almost derailed Mr Cunliffe when he asked the Labour leader directly whether its capital gains tax would apply to family homes held in a trust - a simple question Mr Cunliffe completely avoided answering.

Mr Key said after the debate that that was because Mr Cunliffe did not know the answer.

He said that was because under Labour, a house in a trust would be subject to a capital gains tax.

But Mr Cunliffe said Mr Key had got it wrong and family homes which were the primary place of residence in a trust would not, and never would, incur a capital gains tax

Mr Cunliffe was asked why he did not make that clear during the debate, and he replied that he thought he should check the facts.

The two leaders will meet again next week for the TV3 debate.