Is GST still fit for purpose?

On today in 1986, then-finance minister Sir Roger Douglas introduced GST to New Zealand. 

It was part of the dramatic economic changes known as Rogernomics.

But since then, the world has spawned the internet, smart phones and Uber Eats - so, is GST still fit for purpose?

New rules coming into effect on January 1 will mean that overseas companies like Amazon will have to pay GST in New Zealand.

Netflix has already surrendered, putting up its prices twice to cover its tax bill.

The new law is being embraced by New Zealand retailers and the move is expected to add a $100 million a year to the country's tax pot.

GST was seen as a way to fill the coffers in 1986, and over the years has increased from 10 percent to 15 percent.

The Project asked Sir Roger himself what he thought about the idea of getting rid of GST.

"What you have to remember, if you take it off food the tax on everything else will go up by about 25 percent," says Sir Roger.

"If you were going to cut it then you need to cut Government expenditure - I'd favour that."

Watch the video.