Poll: More than half of voters say it's time for tax cuts

More than half of voters think now is the right time for tax cuts, according to the 1News Kantar Public poll, while more than a third say it's not.

The poll, which ran from May 20 to 24, asked eligible voters: “is now the right time to introduce tax cuts in New Zealand?”

Of the 1002 respondents, 52% said "yes", 35% said "no", while the rest refused to say.

While there was no interest in tax cuts among Labour caucus members canvassed at the party's annual congress this weekend, National Party leader Christopher Luxon said it was "absolutely" time for tax cuts.

"That's what we would do is make sure we can get Kiwis to keep more of their own hard-earned money in their own pocket so they can navigate the cost of living crisis the best way they can."

National finance spokeswoman Nicola Willis said National had a "fully costed" tax plan that meant someone on the median wage would get $800 more a year.

"It won't make people rich but those dollars will make a real difference in the back pockets of families.

"We want to deliver tax reduction responsibly. What that means is getting rid of some of the wasteful spending government's currently doing on itself, so we can prioritise letting New Zealanders keep more of their own money.

"[Labour wants] to tax some people more so they can offer reduction elsewhere. That is not the right thing to do when we have such a fragile economy."

While Prime Minister Chris Hipkins told 1News New Zealanders struggling in the cost of living crisis could be worse off if given tax cuts.

"It would likely mean inflation staying higher for longer."'

Infometrics principal economist Brad Olsen said high inflation and interest rates meant people were struggling with their household budgets.

He said that more than half of people wanted tax cuts showed how "widespread that challenge is".

"There's also a large group of Kiwis who are looking at government finances, they're looking at how much they're spending and they realise that it's going to be difficult to be able to provide tax relief on one hand and not provide some sort of cutbacks or pullbacks in government spending on another.

"None of these are easy decisions, you can't just easily reduce the tax take or reduce government spending without any consequences. There's no such thing as a free lunch."

He said if tax cuts were funded by borrowing, it was likely to be inflationary, but if it was funded from reducing government spending elsewhere, and there was a net no-change in overall spending - households spending more but government less - then it would not fuel inflation.

"The difficulty with all of these questions is around tax cuts or not is that no one knows exactly what the counterfactual then is.

"Everyone wants tax relief, but the question then is what doesn't get funded, what is the opportunity cost?"