National Party leader Christopher Luxon has defended National's tax-cut policy while fighting back claims the plan could be a financial disaster.
It comes after UK Prime Minister Liz Truss was forced to U-turn scrapping the top rate of tax after the announcement caused turmoil on the financial markets and caused the pound to go into freefall.
Truss ditched her $2 billion tax cut for the wealthiest Brits - those earning more than £150k.
Luxon told AM on Wednesday his tax policy differs a little and New Zealanders need cash-in-hand now more than ever to deal with the cost of living crisis.
"In the UK, you've got a very different situation, you've had massive wholesale tax changes proposed and at the same time you've got massive amounts of stimulus caused largely by energy prices over there," Luxon explained to AM co-host Ryan Bridge.
"What we're proposing is something quite different and what I say to you is, look, the things people are concerned about in the UK are actually already here. We've got a Government spending $1 billion more a week in government spending and not getting outcomes."
He added debt is still going up, and interest rates are increasing because of the Government's reckless spending.
Alongside moving tax brackets up, National plans to ditch the 39 percent top tax rate for high-income earners and a slew of other taxes.
Luxon said the major components of National's tax-cut policy are indexing tax brackets to inflation and unwinding Labour's taxes they implemented since they came into power in 2017.
"The way we're so confident we can do that is when you're spending $51 billion more - a billion more a week in government spending - there is a huge amount of waste, there's a lot of low priority projects and there's also a bunch of projects we need to get better value out of," Luxon said.
"We're very confident when you go through all that government spending, to adjust those tax thresholds, to unwind the bright line test on the interest deductibility and the 39 percent tax rate, all of that's possible with respect to managing that spending better."
Luxon said Kiwis will see a fully costed fiscal plan from National before the election next year.
"When we get to next year and we actually have a look at the books before the election, you can trust National that we are good economic managers, we're going to make sure we're responsible, we're prudent, we're really disciplined," Luxon told AM.
"But we have to get better performance because at the moment we are spending more money, we're hiring more people and on health, education, the economy, housing, crime, we are getting worse outcomes."
National's tax-cut policy has come under fire from Labour and economist.
Independent economist Cameron Bagrie said last month tax cuts are the "wrong policy response" to an economic crisis.
"We've seen that mini-budget… tax cut package come out which just, in all honesty, looks to be money for the greedy as opposed to the needy," Bagrie said of the UK's policy.
From New Zealand's perspective, he told AM tax cuts were "the last thing we want".
"What we want is what's called 'micro-economic policy' - these are all the levers such as immigration settings that can help our economic car drive a little bit faster."
Ardern was asked by media on Monday if it was intellectually dishonest to re-badge some of the things National is pledging to repeal as taxes.
"You will have seen us challenge this directly, the way that some of these, for instance, the work we’ve done to ensure that the playing field is level for first-home buyers. For them to re-characterise those initiatives in that way - no, I don’t think it’s a fair representation of the action we’ve taken as a Government," Ardern said.
"But I think, more broadly, what I would say is there’s a lesson to be learned when you look at some overseas jurisdictions who have gone down the track of wide-ranging tax cuts. For instance, as we’ve seen around income tax and stamp duty in the UK and the impact that has had on their market and the impact that it’s had on pension funds, and so on. You can see that policy decision and the time at which you make them can have much wider ramifications."
Watch the full interview with Christopher Luxon above.
