National plans to introduce new taxes on foreign property buyers, offshore online gambling and immigration levies to pay for its tax cuts.
National would also make more extensive cuts to the public service - though it says this would exclude non-core and frontline agencies - and remove the commercial building depreciation tax break, introduced as a Covid relief measure.
Labour plans to do the same, using the extra revenue to pay for its GST-free fruit and vegetables.
Funds raised for tackling climate change through the Emissions Trading Scheme would also be paid out directly to families through a climate dividend - a policy prospective governing partner ACT has long held.
National had released some details of its tax cuts, billed as the "Back Pocket Boost", ahead of its announcement.
Combined with the FamilyBoost tax rebate policy, the cuts would mean a family with children on an income of $120,000 would keep up to $250 extra a fortnight. Without children, they would keep $100 a fortnight.
Those on lower incomes would keep less of their earnings, with someone on $60,000 a year keeping $50 a fortnight; a full-time worker on minimum wage would keep $20 a fortnight; a superannuitant couple would have $26 extra a fortnight.
Earners with an income of more than $78,100 would have the benefits of the tax cuts capped at $40 a fortnight.
Finance Spokesperson Nicola Willis said this was expected to cost $14.6 billion over four years.
It would be funded through the four "targeted revenue measures" she had signalled earlier in the week, which include a 15 percent tax on foreign buyers of houses worth over $2 million, closing a tax loophole by ensuring offshore operators of online gambling services paid tax, and moving to user-pays immigration levies which would exclude tourist visas.
"Our Back Pocket Boost tax relief plan does not require borrowing and will reduce pressure on inflation. It has been designed to be self-funding so that National can guarantee tax relief for working people, even if Labour leaves the government books in a mess, as is predicted," she said.
She also repeated National's commitment to increase funding for frontline health and education every year if it wins the election in October.
At the policy announcement Luxon said: "This plan confirms that a National government can do what we've said all along that we will do, which is to put money in the back pockets of New Zealanders as part of a prudent, fully-funded and balanced tax plan."
The "squeezed middle" was being left behind, Luxon said.
"These are New Zealanders who work hard, sometimes juggling multiple jobs and family responsibilities, but high inflation, high interest rates and high taxes are eating away at their incomes. But I'm telling you, hope and help are on the way because a National government will deliver for a squeezed middle.
"These workers deserve to keep more of their earnings, and I have every confidence that they will spend their extra cash more wisely than any Labour government can. This package is deliberately aimed at helping middle New Zealand, and getting our country back on track."
"As well as providing tax relief, we are going to tackle the underlying drivers of inflation and we are going to bring it down, and lower inflation will almost certainly mean lower interest rates, and quite simply, New Zealanders will be better off with a National government."
Willis said it was an exciting day.
"Important context for our plan is the sheer volume of government spending that is occurring under the Labour government. This year, Labour will spend 80 percent more than it did in its first year of office, amounting to $1 billion more in government spending every week.
"The government's tax take has risen significantly to fund that increasing spending with the tax take up more than $100 million a day. National's concern is not only has the government failed to deliver improvements and public services with all of this spending, but that the tax burden is falling disproportionately on working people. They are paying higher tax rates on their incomes, and on their petrol, while also facing higher rents and costs in their lives.
"This is happening at the same time as the government is prioritising support for profitable polluters, who are continuing to receive subsidies while the backroom bureaucracy continues to grow and while foreign firms are avoiding tax on domestic activities. The balance is all wrong."
"In terms of these changes and how they break down, we have achieved the income tax relief across a package which is worth $3.1 billion in its first year, rising to a cost of $4b in 2027-28. The total value of the tax package we are announcing today is $14.6b.
"The vast bulk of this tax package is for income relief, with $12b of that $14.6b going to income relief."
There would be a shift in income tax brackets to compensate for inflation, introduction of a FamilyBoost childcare credit of up to $75 per week and expansion of eligibility for the independent earner tax credit so modest income earners get more relief, she said.
"This package also increases support via the Working for Families system, in recognition of the fact that parents with children are doing it particularly tough. We've increased the tax credit by $25 and we also lift the abatement threshold for the In Work tax credit from 1 April 2026.
"In terms of the timing for these changes, the full relief will be available from 1 July next year. The WFF changes will be available a little earlier, on 1 April next year."
National would fully restore interest deductibility for rental properties, Willis said.
"This means that from 1 July next year, interest deductibility will be at 50 percent, whereas under Labour it will reduce to 25 percent. In 2025, interest deductibility will lift to 75 percent, and by 1 July 2026, interest deductibility will be fully restored."
She said the party would also bring the bright line test back to two years.
"This has become a capital gains tax by stealth that has ended up capturing the family homes of cancer patients and people affected by natural disaster. Our plan will change the bright line test from 1 July 2024, meaning anyone who brought a property before 1 July 2022 will no longer be subject to the bright line test under National.
It would cancel the Auckland Region Fuel Tax and "cancel Labour's planned fuel tax hike of 12 cents over the next three years".
"We will not be cutting health and education funding, in fact, National will be increasing health and education funding."
*This article has been updated to clarify that both Labour and National would remove the commercial depreciation tax break given to commercial property owners during Covid-19.
