The Manufacturer's Network boss Dieter Adam says a tax on robotic arms in factories would be "stupid".

The new Government is monitoring how machines will affect jobs in the future, but has not considered a "robot tax".

Announcing the Government's tax working group this week, Finance Minister Grant Robertson said the nature of work was changing and so too could the tax system.

Auckland University head of commercial law Alex Sims said robots, autonomous systems and artificial intelligence would displace skilled workers from jobs forever, in a similar way to cars replacing horses for transport.

SUPPLIED Auckland University head of commercial law Alex Sims says the Government has not factored in the wider problems the changing nature of work will inevitably bring.

Sims said a future with fewer employees paying tax from their wages was a growing concern internationally.

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"The big problem is that people are going to be displaced from work and where is that money [in tax] going to come from?"

ALEXANDER KOERNER/GETTY IMAGES Alex Sims says automation will displace workers forever.

A dubbed "robot tax" was first suggested last year in a draft report presented to the European Parliament.

Microsoft founder Bill Gates publicly endorsed the idea this year.

The idea in practice could be a tax added to the purchase price of automated systems or machinery that would replace workers.

MONIQUE FORD/STUFF Finance Minister Grant Robertson raised the alarm on the "changing nature of work" affecting tax this week.

Another idea is to tax the money a company makes from technology that takes jobs and lifts revenue.

Revenue Minister Stuart Nash said earlier this month that the Government already taxed business productivity through income tax.

"Currently, if a person uses a robot in their business, then we tax the income they receive from using the robot."

SHIZUO KAMBAYASHI/AP Sims says such a tax should be applied to robots and automated systems that customers use.

Nash said technology in the past had not resulted in significant long term unemployment, and it was unclear whether robots would.

Sims disagreed. This time, the effect that technology would have on workers was different, she said.

Historically, people worried that ATMs would displace bank tellers but banks actually hired more as their business expanded.

Now, banks across New Zealand were closing down as customers increasingly chose to bank online, she said.

Sims said the Government had not fully considered the "ripple out effect" technology would have.

If people were not earning, they would not be buying, meaning less goods and services tax.

The Ministry of Business, Innovation and Employment (MBIE) confirmed it was keeping watch on the effect technology could have on jobs.

MBIE labour and immigration policy general manager Ruth Isaac said it was undergoing investigations to understand the "changing nature of business and employment".

She said the investigation included the "possible effects of automation and technological advancement on the labour market".

Isaac said it had not yet seen any major changes to jobs here so had not given thought to a robot tax.

Inland Revenue said it was not considering introducing a robot tax either.

The IRD will cut almost 2000 staff as it executes its Business Transformation programme from next year, that will see it replace computer systems and introduce more automation.

The Manufacturer's Network chief executive Dieter Adam shot down the idea of a robot tax for his industry.

He said charging companies that were automating in a bid to stay relevant was "stupid" and "backwards".

Adam said manufacturers did not want to rid workers of their jobs, but they had to automate some of their production line to keep up with international competition.

"I am yet to meet a manufacturer that says the aim is to get rid of jobs."

He said manufacturers bought robots to grow their business, then employ more people.