In October 2010, the New Zealand government implemented a significant fiscal reform package. The cornerstone of this policy was an increase in the rate of Goods and Services Tax (GST) from 12.5% to 15%. While the government simultaneously reduced personal income tax rates to offset the rise, consumer confidence weakened immediately following the hike. Retail sales fell sharply in the fourth quarter of 2010 as households reduced non-essential spending. Many businesses, faced with higher prices and falling sales volumes, cut back on their expansion plans and reduced their staff numbers to lower operating costs, particularly in the retail and hospitality sectors.
Using information from the extract, explain how the increase in the Goods and Services Tax (GST) may have affected unemployment in New Zealand after 2010.
