Radio New Zealand - Te Reo Irirangi o Aotearoa

Suggestion of further GST rise rejected

Updated at 6:08 am on 17 December 2010

An Auckland academic is rejecting suggestions that another increase to the goods and services tax (GST) would help increase the country's savings record.

The Savings Working Group, which is looking at ways to boost savings levels, says a further increase in GST should be considered but should should be compensated for by income tax cuts.

The co-director of the retirement policy and research centre at Auckland University, Susan St John, says increasing GST would only lead to increased calls for exemptions on goods such as healthy foods.

Business New Zealand says any hike in GST have the potential to fuel a black market economy.

The Savings Working Group is due to present its final report to the Government next month.

Copyright © 2010, Radio New Zealand