Bollard, Cullen at odds – Newstalk ZB

Bollard, Cullen at odds – Newstalk ZB

Are tax cuts inflationary Mr Cullen?

The Reserve Bank Governor appears to be at odds with the Finance Minister over the impact of tax cuts on the economy. Alan Bollard is saying they will bring pressure on inflation but minister Michael Cullen has said tax cuts will be non inflationary.

Dr Bollard says inflation will remain at more than three percent this year and tax cuts will not help.

He says government spending and any proposed tax cuts do have an impact on inflation and he says that is what the bank will continue saying to the government and to the opposition.

The only way Cullen can guarantee that tax cuts are not inflationry is to give with one hand and take back more with another, watch for some trickiness from Mr Sullen.

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