In a statement to the parliament, the Prime Minister said, he promises to deliver across the board tax cuts this week. Keeping in consideration that households are already facing increased food and power prices, the Government says that will be able to compensate people for a proposed hike in GST.

Finance Minister was questioned by opposition parties about the fact that how was he going to design the scheme to ensure that people including those who work on low income and are without children will receive compensation. There were also queries regarding compensation to be made during the GST hikes and annual adjustments during inflation.

Finance Minister Bill English said, “The price increases would stream through to the annual adjustment for benefits. The components include extending the tax base so you would be getting more tax out of the property sector and in the whole package there is the opportunity to ensure that people aren't worse off. Of course, we would like to see a majority of people better off”.

Mr. English told journalists, “It could be done, but the exact design of the package is yet to be finalized. If they are on benefits or national superannuation the Government would be directly compensating if there's an increase in GST and for those who aren't on benefits what we are aiming for is for income tax cuts that match an increase in GST”.