Deputy Prime Minister Paula Bennett says Kiwis need to say thank you with their wallets.
Bennett's call follows an op-ed from Radio Hauraki presenter and columnist Matt Heath claiming hospitality service in the United States was better than New Zealand because of the tipping system.
In a letter to the Herald today, Bennett said she seconded Heath's call to tip service staff.
"People come to New Zealand for our beautiful landscapes and beaches, they leave talking about the wonderful people they meet," she said.
"Overall I think the service in New Zealand is good, I always tip for excellent service and encourage others to too if we want standards to continue to improve."
"Great waitstaff can make a good meal an excellent experience - say thank you with your wallet."
Restaurant Association chief executive Marisa Bidois said the organisation had been working hard to encourage consumers to tip.
"I one hundred per cent agree with Paula and I think this is an issue we have been talking about as an association for quite a while now," Bidois said.
Bidois said the association thought good service should be recognised, although whether or not it should be mandatory was another discussion.
She said tipping was a good incentive for staff, and customers should be encouraged to tip.
"Obviously business owners in the industry train staff to treat customers well - that's the basis of hospitality - but if there was another incentive thrown in there I'm sure that would help," she said.
"I've definitely seen a change over the years, particularly in the last few years, it is becoming more common," she said.
"I do think people need to be aware of it though so it's great Paula mentioned it in her letter."
Hospitality New Zealand advocacy and policy manager Dylan Firth said tipping was becoming more common in New Zealand, and customers should be encouraged but not obliged to tip for good service.
"I think tipping is growing," Firth said.
"Traditionally it has been more in high-end restaurants but it's becoming a lot more common now, even to the point of eftpos machines asking 'do you want to add a tip'," he said.
"I don't think people should feel the need to be forced to tip but if they're getting good service they should be rewarding people for it."
The US has a strong tipping culture with two different wage rates - one for workers who receive tips and one for those who don't.
Firth said the New Zealand situation was different, with tips seen as an additional bonus on top of wages rather than a part of working wages.
Despite agreeing with Bennett that tipping should be encouraged with great service, Firth said it should not be mandatory.