Berlin - Leaders of Germany's Social Democratic Party (SPD) met in Berlin on Saturday to approve an election manifesto designed to win over voters with promises of more cash.

Key points of the platform are tax cuts and state handouts for low income groups and families with children to be financed in part by a tax on the rich and a levy on stock transactions.

The centre-left SPD is seeking to distance itself from Chancellor Angela Merkel's conservative Christian Democrats (CDU) as Germany's two coalition partners gear up for a parliamentary election on September 27.

Campaigning is expected to be dominated by the fallout from the economic crisis, which has hit key sectors of German industry and put tens of of thousands of workers on reduced hours with less pay.

The SPD measures "are the right answer" to the unprecedented downturn, said Ralf Stegner, a member of the party's executive bureau, ahead of Saturday's meeting.

The programme includes a 4-point reduction in the lowest bracket of income tax to 10 per cent as well as a 200-euro (264 dollars) tax break for families with children.

There is also a 300-euro bonus for people on low wages if they forgo filling in a tax return, a move the party says will also help cut red tape.

The measures will be counter-financed by a 2 point increase in the top tax band to 47 per cent for people on annual incomes of 125,000 euros upwards and a 0.5 per cent levy on stock exchange transactions.

The party estimates these steps would generate 5 billion euros in extra revenue, part of which would be used to improve educational facilities.

"We are providing relief to the centre by lowering the opening tax rate and by investing more in the education of their children," said Foreign Minister Frank-Walter Steinmeier, the man chosen by the SPD to challenge Merkel for the chancellorship in September.

Steinmeier is due to unveil the election manifesto on Sunday before it is presented for approval to a party congress in Berlin on June 14. (dpa)