Finance Minister Bill English on Thursday rejected much of the advice he has received from the Treasury.
In a briefing paper to the recently elected minister, the Treasury warned the National-led Government not to introduce a financial rescue package in response to worsening economic conditions.
It advises measures taken by the previous Labour government go far enough and the May 2008 Budget already adds a fiscal stimulus to the economy of nearly 3% in the year to June 2009.
The Treasury says any other efforts by the Government to boost economic activity in the short-term would be costly and could require cuts later on to avoid the public finances going further into the red.
It recommends cutting the top personal income tax rate to 30 cents in the dollar, matched by rises in GST and the introduction of a capital gains tax. It says the Emissions Trade Scheme is essentially sound.
However, on Thursday Mr English scotched any suggestion the Government might adopt the Treasury's ideas.
Mr English says the Treasury has outlined a number of issues it believes are important, but the Government will not be adopting all its recommendations.
He says the Government will pass legislation before Christmas paving the way for tax cuts from 1 April, but it has no intention of introducing a capital gains tax or raising GST.
Labour Party leader Phil Goff says the Treasury briefing papers show the Government has inherited a very solid legacy.
Mr Goff says New Zealand is well-placed economically and that legacy should not be squandered by the National Government.
