Prime Minister John Key has raised fresh doubts about the planned upcoming tax cuts. He says those due to take effect on April 1 will happen, but is refusing to give a watertight guarantee for the next two rounds, due next year and the year after.
Business leaders, like Air New Zealand CEO Rob Fyfe, are pressuring Mr Key to cancel the three-year tax cuts package beginning in April, worth billion of dollars, because he says they won't save jobs.
The middle classes won't spend it, and it won't stimulate the economy.
"The concern with tax cuts, the risk with tax cuts in my mind is we see a lot of people hoarding their cash," he says.
"The April 1 tax cuts are going ahead," says Mr Key. "We believe they will stimulate the economy, we'll believe they'll put money in the pockets of New Zealanders who have waited a long time for them, and we think we're on the right strategy."
As for guaranteeing the following rounds of cuts to be safe, Mr Key was less sure.
"I believe them to be, and I believe that's the right approach," says Mr Key.
Key has introduced an element of doubt into National's tax cuts next year and the year after.
The package is solely aimed at middle and high-income Kiwis, and Mr Fyfe says that won't help save jobs in any sector.
"You need to target your initiatives into the areas you get the best bang for your buck," says Mr Fyfe.
"On the best knowledge I have at the moment, that's not my expectation," Mr Key spoke again on the possibility of tax cuts.
Fyfe says a 15 percent drop in visitors could see 28,000 jobs wiped from the tourism sector, and he wants Government money to assist the industry. Mr Key is also tourism minister.
Key's assurances certainly are not watertight and Mr Fyfe, a crucial figure at tomorrow's job summit, is hoping National puts country ahead of politics.
Labour agrees with Mr Fyfe.
The debate is about bang for your buck, and now Mr Key is under pressure to ditch the politics and ditch or redesign the tax cuts.
3 News