Contact Energy joins GST price push

Contact Energy is the latest power company to signal it will increase its prices when GST rises on October 1.

The Government is increasing GST to 15 per cent, from 12.5 per cent, at the same time as cutting personal tax rates.

Prime Minister John Key says families will be $25 a week better off and individuals $15 but Labour disputes that, saying the New Zealand Institute of Economic Research estimates half of all households will be worse off by year's end.

"Power companies are increasing their charges on October 1, with Contact Energy the latest to inform customers of a 6 per cent increase in power prices, leading to around $6 increase on average for families," deputy leader Annette King said in Parliament today.

"Public transport costs are increasing on October 1, with the Wellington bus company (Go Wellington) increasing their fares for some passengers by $5 a week.

"How will New Zealanders be better off, as he (Mr Key) promised, when $11 of their so-called tax cuts have been eaten up in just two prices increases?"

Mr Key said the Government was doing what it could to control power prices and ensure the economy operated efficiently.

"If the Wellington bus company is raising its prices by $5 a week as of October 1 because of the GST increase then they're ripping people off because, quite frankly, GST going up 2.5 per cent is unlikely to equate to $5," he said.

- NZPA