John Key's tax reforms are being slammed as a cop out.

Economic commentator Bernard Hickey says the Prime Minister rightly pointed out there is a big hole in New Zealand's tax system, but he has done nothing to plug it.

He says Mr Key has ruled out a capital gains or land tax, sending a grim message to those not already owning a home.

"John Key was essentially saying to those people who don't own property now, that there isn't much hope, he isn't going to change the tax system in any major - and if you want to buy a house, you may as well buy a one-way ticket to Australia or somewhere else."

Mr Hickey says Mr Key has decided to take the easy way out to make sure he is re-elected in 2011.

Labour's on the warpath over suggestions GST may rise, after Mr Key signaled the idea is under consideration for this year's Budget. A 2.5 percent rise would earn the Government an extra $2 billion, money that could be used to reduce top tax rates.

Labour leader Phil Goff is damning of any move to increase GST.

"What New Zealander that he's met out in the street has told him that they want the price of their bread to go up? The price of their milk? The price of their power? The price of their kids' shoes and their back to school needs?"

Mr Goff says no-one asks for an increase in GST except those in the top income bracket, who will take it in exchange for tax relief for the high incomes they are earning.

Mr Goff says the speech delivers no real action plan for the country and it was more like "tiptoe Tuesday" than the "big Tuesday" National's spin doctors made it out to be.