GST an option because 'times have changed' - English

Bill English has had to contend with flip-flop criticism of his own. Photo / Mark Mitchell

Finance Minister Bill English was today forced to defend the Government's plan to raise GST after parliamentary rivals accused him of telling "porkies."

"They're a bit slow," he told reporters in Wellington. "Over the last six or eight months there's been debate about GST and the Government's come to the conclusion that it should consider it."

"The opposition seems to have discovered that in the last couple of days," he said.

In February 2009, English delivered a speech in which he said the Government wanted to maintain GST at its present rate.

"(It is) probably one of the best examples of indirect tax in the world," he told an audience at the Centre for Accounting, Governance and Taxation Research Forum.

English said today that the current economic climate meant changes in GST had now had to be considered.

"Times have changed and we're dealing with the economy as we find it."

The criticism follows Prime Minister John Key's announcement on Tuesday that the Government would "consider" raising GST from 12.5 percent to 15 percent. He spent time in Parliament yesterday deflecting attacks from opposition MPs after a video, in which he said a National-led Government would not raise GST, surfaced online.

The video was recorded during a press conference in 2008.

Key argued that his comments were made in the context of raising GST to cover deficits.

* Quotes

John Key

"National is not going to be raising GST. National wants to cut taxes, not raise taxes.

He's [tax specialist John Shewan] talking about having to raise GST and the top personal tax rate maybe in five years' time and what I am saying is if we do a half-decent job as a government at growing our economy I am confident that won't be happening."

- Press conference, October 2008

Bill English

"We want to maintain GST as it is - probably one of the best examples of indirect tax in the world. We want to keep that rate and no doubt there will be continuing debate about where the corporate tax level should go and the need for a capital gains tax."

- Speech, February 2009

- NZHERALD ONLINE