Prime Minister John Key hinted yesterday that National would campaign on lowering taxes for middle-income earners in a third term.

The announcement was made ahead of this afternoon's 2014 Budget announcement.

Housing and an extension to paid parental leave are tipped to be included in this afternoon's Budget announcement.

The Prime Minister also ruled tax cuts out of the Budget, saying getting the books back in the black gives the Government options for later down the track.

This included spending more, or retaining some of the surplus through the tax system.

Finance Minister Bill English talked down incentives for first-home buyers yesterday, reports Fairfax Media, but signalled measures to free up land supply for new housing.

Measures to bring down building costs were also suggested by the Finance Minister.

Extension to paid parental leave is also predicted to be phased in, after National came under pressure to match Labour's promise to increase the scheme to 26 weeks.

'It's been a difficult few years for many, and the Government acknowledges this,” says John.

'We have taken on a considerable amount of debt to protect the most vulnerable families, maintain living standards and support the rebuild of Christchurch.

'We are moving into a period where we are seeing improved economic and fiscal conditions.”

John says this year's Budget will continue what the Government has done in the previous Budget, which is to set out a longer-term path to repair the damage to the economy 'caused by excessive borrowing, consumption and spending under the previous Labour government”.

'What I can say is that just because there is a General Election coming in September, we will not be spending large amounts of new money.

'That would stop us getting back to surplus, push up interest rates even higher, and prevent us paying down debt.” He says the Government won't be losing sight of the need to maintain a tight watch on spending.

John says the Budget is about sustaining economic growth.

In the last two years, the average full-time wage has gone up 5.8 per cent while inflation has gone up just 2.6 per cent. The average wage is now $54,700.

'We have the opportunity now to lock in the benefits of a growing economy for households and businesses up and down New Zealand.

'This term, our programme is based on four main priorities. These are to responsibly manage the Government's finances, build a more competitive and productive economy, deliver better public services for New Zealanders, and rebuild Christchurch.”

The Budget will be announced in Parliament this afternoon.