11 Feb 2010

English defends change of stance on GST

9:08 pm on 11 February 2010

Finance Minister Bill English has dismissed the Labour Party's accusation that the Government has broken its word to keep the goods and services tax at the same rate.

The Government is considering increasing GST to 15% after Mr English saying a year ago it would not be changed.

Labour has dug up a speech by Mr English in which he said the Government wanted to keep the GST rate as it is at 12.5%.

But Mr English says the plan to raise GST and reduce personal income tax is a response to the recession and recommendations by the Tax Working Group.

"Times have changed and we are dealing with the economy as we find it, and the process has been completely open.

"The opposition seem to have discovered in the last couple of days that the Government's been debating GST - the material's been out in the public environment since last August."

Mr English has also been defending the potential GST rise in Parliament on Thursday, saying his advice is that an increase, combined with other moves, would result in a better tax system and economy.

Meanwhile, Mr English says there are intense discussions with the Maori Party on the tax changes after it said it would consider withdrawing its support for National if the tax package does not meet the needs of Maori.