GST Incerease Unpopular Among Kiwis

15 February 2010

“Most New Zealanders don’t want a GST increase, despite the fact that evidence continually shows it would be good for the country in the long-term,” says Maxim Institute Researcher, Steve Thomas.

According to a poll conducted by UMR and commissioned by Maxim Institute, 56 percent of New Zealanders do not want to see GST increased, even if personal income taxes were lowered at the same time. 41 percent strongly opposed an increase, while only 13 percent strongly supported it.

“Rebalancing our tax system by relying less heavily on personal income taxes and more on GST would be good for the economy,” says Thomas. “The Tax Working Group and the 2025 Taskforce have both recommended that serious change to our tax system is needed and income taxes need to drop. While the poll results show people are clearly concerned about a rise in GST, we need to be realistic. We need a tax system that will allow the economy to grow if we are to reach our potential as a country. At the moment we collect 53 percent of all tax revenue in personal income taxes—the most harmful taxes to growth. That’s just not sustainable.”

“The challenge is for the Government to undertake the difficult task of balancing the public mood with what is good for the country.”

“There is obviously significant concern about a GST increase and that concern deserves to be acknowledged,” says Steve Thomas. “At the same time, we need to understand that more reliance on GST actually holds out genuine advantages. A rebalanced tax system offers real benefits for all of us, in the shape of economic growth and better living standards. The Government needs to make a commitment to a rebalanced system to make New Zealand a more attractive place to work, live and invest—and it needs to clearly explain the case to the electorate.”

ENDS

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