7 Oct 2008

Tax cuts debate hardens

10:50 am on 7 October 2008

A disclosure that the Government faces 10 years of deficit has hardened debate about whether tax cuts are now affordable.

Treasury forecast on Monday that the Government's accounts will slip to an operating deficit of $3.2 billion in five years and will take a further five years to recover.

The Public Service Association, which has 56,000 members on the Government payroll, says tax cuts will cost public sector jobs across New Zealand.

It also suggests the deficit could lead to a scaling back of KiwiSaver.

But the Wellington Chamber of Commerce says in order to encourage productivity, the tax cut programme must not lose momentum.

Chief executive Charles Finny says tax cuts would be high on the agenda of ways to achieve productivity.