Prime Minister John Key "believes" tax cuts for 2010-11 and will go ahead, but he stopped short of guaranteeing them today.Mr Key made the comments while being asked about Air New Zealand chief executive Rob Fyfe's comments earlier questioning whether tax cuts were the best way to stimulate the economy.
The Government is holding a jobs' summit tomorrow as part of a set of measures to deal with impacts of the international financial crisis and recession.
Mr Key told reporters the April 1 tax cuts were definitely going ahead.
"A huge part of what drives economic growth is private sector consumption, so if New Zealanders have more money in their pockets its stands to reason they will go and spend that and that stimulates our economy," he said.
It was also not a bad thing, he noted, if some people chose to put the money towards paying debt.
Mr Key said several other governments had included personal tax cuts as part of packages to deal with the tough economic times.
"The April 1 tax cuts are going ahead, we believe that they will stimulate the economy, we believe that they will put money in the pockets of New Zealanders who have waited a long time for them and we think we are on the right track."
When asked about the following two years he was less emphatic saying "I believe them to be (safe)".
And "On the best knowledge I have at the moment that's not my expectation... We live in dynamic times; I wouldn't jump to conclusions."
Labour leader Phil Goff said the tax cuts should be dropped.
"The world has changed markedly since National campaigned last year on introducing these tax cuts," he said.
"The outlook for our economy has worsened significantly and job losses are forecast to increase."
Labour believed spending on insulating homes and encouraging research and development plus putting more into training would help stimulate the economy.
"Labour stands ready to support the National Government changing its stance on these tax cuts," Mr Goff said.
Mr Key said Labour did not believe in tax cuts - it had nine good years in which it could have delivered them.
"Which would have put New Zealand in our view in a much stronger position."
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