Brian Fallow looks at next week's budget and at the likely size and impact of the tax cut. He concludes
The bottom line? It would probably be unwise to count on much more than $2 billion worth of tax cuts at the front end of what is likely to be a multi-year programme.
As for how it will be structured, another of the Government's tests is that it should not increase inequality.
That suggests it is not thinking about lowering the top rate, even though a lot of economists would say that is where tax cuts would do most good for investment and jobs.
Cullen has also ruled out introducing an Australian-style tax-free zone at the bottom of the tax scale, or changes to the GST regime.
A couple of billion dollars spread fairly evenly across the broad middle of the tax scale would be worth about $20 a week. Meanwhile the tax gap with Australia has just got wider since Treasurer Wayne Swan's Budget on Tuesday.
At the moment you have to earn more than $195,000 a year before you pay a higher proportion of it in income tax in Australia than you would here.
This calculation, courtesy of Deloitte, ignores the exchange rate and complications such as Working for Families tax credits and ACC levies here, Medicare and capital gains tax there. From July 1 that tipping point moves out to $240,000, and by 2013 it will be $1.6 million.
Maybe Simon Moutter, Auckland Airport's new chief executive, should start by installing more seating at the departure gates.
