Strong opposition to GST increase - poll

Prime Minister John Key. Photo / Mark Mitchell

Prime Minister John Key believes people are keeping an open mind about the Government's tax changes until they see the final detail on budget day.

The Government is considering tax cuts across the board, funded through a rise in GST to 15 per cent and changes to property taxation.

A TVNZ/Colmar Brunton poll today showed 69 per cent of people were against a GST rise and 63 per cent did not believe they would be better off from the resulting tax cuts.

A recent TV3 poll also showed strong opposition to a GST hike, but an even split when people were asked about being given tax cuts in compensation.

The same polls also showed National maintaining a lead of around 20 percentage points over Labour.

Mr Key said the public would judge the package when it was revealed in the May 20 budget.

"Now it is my expectation that the vast majority of them will be better off and it is also my expectation that the country will be better off," Mr Key said.

"This is just isn't about lowering personal taxes, being financed partly through a potential rise in GST. It's also about the wider economic signals - whether we save more, whether we invest more in the productive sector whether our workforce faces lower marginal tax rates."

Mr Key did not believe that National was losing the PR campaign on tax with Labour warning that all people will be paying more for their shopping, in order to fund tax cuts for the rich.

"The weekend's polls, I think, show that the country is very open-minded about what is going on," he said.

People were concerned that they may not be better off, but if they had lost faith in the Government over considering changes to tax then this would have been reflected in National dropping in the polls - and this had not happened.

"Like any government, we stand and fall on our policies and what we do in our term in office and in the end you elect a government to make decisions and do what they believe is right. We believe in terms of lifting New Zealand's economic performance this is a potentially important element... and come the election in 2011 we will have to stand up and be accountable for our actions."

Labour is hitting the road shortly with a bus tour campaigning against the Government's plans to raise GST, but Mr Key was unimpressed.

"They are trying to mislead the public. So they are going out there saying there is going to be a rise in GST, but they are forgetting to tell the public about the personal tax cuts that will be coming there way."

Mr Key said Labour leader Phil Goff was being hypocritical in campaigning against the GST rise without saying if he would reverse it. If if he did promise to cut the GST rate then Labour would have to campaign on lifting personal incomes taxes and cutting benefits in the 2011 election campaign, he said.

- NZPA