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Cullen, Key Against GST Hike

Contributor:
Fuseworks Media
Fuseworks Media

Neither Labour nor National would consider raising GST to 15 percent.

John Shewan, a specialist tax partner and chairman of PricewaterhouseCoopers New Zealand, told the New Zealand Herald that GST could hit 15 percent and the top personal tax rate increase to 45 percent.

Goods and services tax now adds 12.5 percent to purchases and the top personal tax rate is 39 percent.

Mr Shewin said the revised Government fiscal outlook forecasting a decade of budget deficits, Labour's and National's spending promises and the global economic situation, meant either Government debt would expand unacceptably or taxes would have to rise.

"It wouldn't be inconceivable to end up with a GST rate of say 15 percent and top personal tax rate of 45 percent. Now I'm not saying that is going to happen."

National leader John Key was not interested in increasing GST.

`I don't support that move and our aim as a political party is to be reducing tax and not increasing it," he told Radio New Zealand.

He said the way forward was to grow the economy, not tax more.

Finance Minister Michael Cullen said people "needed to stop panicking" about the 10-year projection based on Treasury forecast.

It only allowed for 2.5 percent growth each year.

"I'm saying absolutely no (to increasing GST to 15 percent) because there is no need to panic at all."

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