The Government's opponents acted swiftly yesterday to decry reported comments made by Prime Minister John Key that Kiwis should not be jealous if the rich get more from tomorrow's Budget tax package.
The rich were crucial to the economy, the Dominion Post reported Mr Key as saying.
Green Party co-leader Metiria Turei said Mr Key's patronising comments showed his Government's real attitude towards inequality.
"John Key is trying to defend the widening gulf between rich and poor in New Zealand as an economic strategy.
"His Government is about to introduce tax cuts that will widen the gap. They will give hundreds of dollars per week to people on the highest incomes and only 84c a week to people on the lowest."
There was no evidence to support Mr Key's claim that Kiwis should "suck it up" because the rich were crucial to the economy, she said.
The tax package has been estimated at about $3 billion but it is expected to deliver little more than $6 a week extra to low and middle-income earners as across-the-board personal tax cuts are clawed back by a rise to 15% in GST and extra tax.
Those earning more than $500,000 a year would get a $481-a-week cut, and even taking into account their extra GST payments, they would be more than $300 a week better off.
Research released last week by economist Peter Conway showed that tax was not a significant factor in economic prosperity and that there was no strong evidence that lower taxes assisted the economy.
Council of Trade Unions president Helen Kelly said there was no point arguing that those on high incomes paid the most tax.
"The top 50% of income earners pay 89% of tax but they get 84% of taxable income.
Making them better off is not a tax switch.
It is a tax swindle," she said.
Mrs Turei said there was a wealth of evidence that inequality hurt everyone, rich and poor.
"John Key should be tackling inequality head-on and telling the rich not to be jealous because they will be better off in a more equal society too."
The Green Party this week launched its own pre-Budget strategy that included a proposal that the first $10,000 of everyone's income should be tax-free.
A tax-free $10,000 would deliver a tax cut to everyone and reduce inequality at the same time by helping those on the lowest incomes the most, Mrs Turei said.
"Instead of a measly 84c a week, people on the lowest incomes would be between $15 and $20 a better off."
Mr Key and Finance Minister Bill English have previously stressed that no-one will be worse off by the tax changes.
It is expected that pensioners will receive a top up of around 2% when the tax cuts take affect on October 1.
Those receiving Working for Families help will probably also receive an increase.
However, Mr Key has been talking about keeping high earners in New Zealand, including doctors, entrepreneurs, scientists, engineers, lawyers, accountants, school principals and nurses.
The top tax rate of 38% starts at $70,000.
Westpac chief economist Brendan O'Donovan said that based on his calculations, the tax cuts would ensure the vast majority of workers, including recipients of Working for Families, experienced no change in their purchasing power as a result of the rise in GST.
The immediate 2% increase Mr Key has promised pensioners and beneficiaries, on top of the tax cut they too would receive, would actually see their purchasing power increase.
The tax package is set to be fiscally neutral with the GST increased expected to raise about $2 billion and up to $1 billion coming from property tax investors.
