27 Sep 2010

Finance minister warns firms over GST rise

6:55 am on 27 September 2010

Finance Minister Bill English says firms that raise prices by more than the GST increase risk losing customers.

The Goods and Services Tax rate will rise from 12.5% to 15% on Friday.

Some companies are advising customers they'll be increasing prices to pass on the extra cost, in some cases by more than the rise in GST.

Mr English told TVNZ's Q+A programme on Sunday that this would be risky, when consumers are already being careful with their spending.

Meanwhile, Bill English says the economic recovery hasn't stalled, despite official figures last week showing the economy grew by just 0.2% in the June quarter.

He says the economy is growing in the right places and has come under more household pressure than expected.

Mr English says unemployment has peaked and the economy has grown over the last three or four quarters and will continue to grow.