GST rise motivates shoppers

Otago businesses were as busy as they looked on the eve of the GST increase.

Their eftpos machines handled more than $8.7 million in sales on September 30, about $1.8 million more than at the same time in 2009.

Paymark, which processes 75% of New Zealand's electronic transactions, said its figures showed there was a last-minute rush to buy before GST rose from 12.5% to 15%.

Sales and marketing head Paul Whiston yesterday said Otago people used their cards 10.3% more to spend 26% more than they did on the same day last year.

That meant they bought more big-ticket items, and suggested there really was a stampede to southern retailers' tills, Mr Whiston said.

The figures reflected a national rush in which people put $35.8 million more on the plastic than on the same day last year.

Regional figures were unavailable.

Nationally, hardware suppliers (207%), building supply merchants (145%) and electronics stores (89%) enjoyed some of the biggest value increases.

Petrol stations (44% increase) and supermarkets (33%) were also caught in the rush, and took an extra $14 million on the day, Mr Whiston said.

New Zealand Retailers Association Southern and Central regional manager Brian Finlayson said the "very obvious" rush was a welcome fillip to southern retailers.

Those struggling with "recessionary spending" were pleased with the "new spending interest" generated by the Government's bolstered tax.

They were heartened by the income tax cuts on October 1 - but worried some of it might be spent repaying the credit cards used in the pre-GST spend.

"It has been tough for some retailers, and they'd rather not see people spending all their credit before Christmas, when that's when retailers do their best business," Mr Finlayson said.

"If that business isn't there, then a number of retailers that have struggled through the year might not last another one."

Paymark's statistics did not include cash sales, and people seemed to have less cash to spend, Mr Finlayson said.

Even so, Otago and New Zealand figures were only slightly healthier in September than the same month last year, suggesting pre-GST spending was spread across the month.

There were 3.98 million transactions in Otago, about 198,000 more than last September.

They were worth $185.5 million, about $7.3 million more.

At $77 million, Southlanders spent $500,000 less last month when compared with September 2009.

Nationally, New Zealanders spent $3.485 billion last month, 3.6% more than when the GST rise was still another 12 months away.

Mr Whiston said September was "relatively flat" and that most regions had "mixed growth".

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