The centrepiece of Dr Cullen's ninth budget was the changes to tax thresholds which see wage and salary earners keeping between $12 and $28 more of their earnings each week from October 1.
However, National Party leader John Key said New Zealanders had waited nine years for Dr Cullen to admit he was wrong and deliver tax cuts.
"Michael Cullen says he will give the average wage earner $16 a week - the equivalent of a family-size block of cheese - a couple of weeks out from the election.
"Then, once the election is gone, the average wage earner will get just $6 more a couple of years later.
''It will be a very long time between toasted sandwiches."
Treasury figures show the total cost of the tax cuts was right on the previously forecast $1.5 billion for the first year, rising to $3.8 billion in 2011-12.
Changes to the Working for Families tax credits will also boost the household incomes of families with children.
The programme will see a couple on the current average household income of $72,000 (split two-thirds/one-third) with two children aged 11 and 8 better off by $43 a week from October 1, rising to $85 a week from April 1, 2011.
"The tax cuts are designed to be as fair as possible to all workers, with the greatest impact on average take-home pay being felt for workers on low incomes," Dr Cullen said in his speech to Parliament.
"This tax-cut programme should, hopefully, provide some relief from the current increases in the cost of living, although for many families they will not compensate for them totally."
Superannuitants will also benefit from the new tax thresholds.
A single, living-alone pension will increase by $23.84 a fortnight to $595.58 from October 1, and a married rate will increase by $22.94 per person to $462.74 each.
As part of the changes, new thresholds would be phased in between October 2008 and April 2011, when the thresholds would be 12.5% on the first $20,000 of income, 21% from $20,001 to $42,500, 33% from $42,501 to $80,000 and 39% above $80,000.
Dr Cullen said the tax and Working for Families changes would help families meet the pressures of international food and oil prices.
For those with heavy mortgage obligations, it was just as important to be reasonably well-assured that the impact of the tax cuts did not trigger a further round of interest-rate rises, which would wipe out the benefits.
Much of the budget had been previously announced.
Other measures, aimed at the student vote, included a 10% increase in the parental-income threshold for a full student allowance from January 1; lowering the age at which parental-income testing ceases for student allowances from 25 to 24; and, similarly, lifting the maximum rate of student allowances for 24-year-olds to the levels enjoyed by students aged 25 and over.
The student loan living-cost component will also be indexed to inflation from April 1 next year, after a one-off increase from $150 per week to $155 per week on January 1.
Prime Minister Helen Clark said the Government's previous eight budgets had been marked by careful stewardship and the strength of the economy now enabled the Government to give priority to the needs of families.
