Tax review head Cullen has 'huge integrity'

The government has defended its pick of Sir Michael Cullen to head its tax working group saying it was unfair to say the former Labour Finance Minister will just toe the party line.

Sir Michael's appointment and the terms of reference were announced yesterday.

The National Party said it would be a rubber-stamping exercise with a narrow focus, and its finance spokesperson, Steven Joyce, said there was no pretence of independence with the appointment of Sir Michael as chair.

Minister of Finance Grant Robertson told Morning Report the National Party had appointed Sir Michael to a number of positions including running NZ Post and reviewing the intelligence and security laws, and calling him Labour's man was unwarranted.

"He's a person of huge integrity and I think some of the accusations that were being thrown around yesterday were very very unfair.

"He will take this job seriously."

Mr Robertson said there would be a diversity of views among the group with more appointments coming before Christmas.

He said the review would look at making the system fairer, and it could recommend both tax cuts and increases.

For example, taxes could be could be raised on assets but lowered on income leading to a fiscally neutral outcome, he said.

Another area of work could be on exemptions around GST.

Mr Robertson said the government believed the simplest system that applied across the board worked well

"(But) one area where work is already underway ... is the question around GST on online purchases and how we make sure main street retailers aren't disadvantaged"

Mr Robertson said the group would could also look at factors driving inequality in society.

New Zealanders would have a number of chances to have input on tax changes, he said.

"There is still plenty of scope in the terms of reference of this review for changes to be made to the tax system and for people to propose their ideas and I really hope they do," Mr Robertson.