David Parker says no decision made about any CGT in Cabinet

Wednesday, 17 April 2019, 10:27 am
Article: RNZ

David Parker says no decision made about any capital gains tax in Cabinet

Associate Finance Minister David Parker says no decision was made about any capital gains tax in Cabinet this week, despite speculation from the opposition that an announcement was due this week.

Associate Finance Minister David Parker. Photo: RNZ / Ana Tovey

Mr Parker told Morning Report it was discussed at Cabinet this week, as it has been "many times" in other pre-Cabinet or Cabinet committee.

Asked whether a decision has been made he said "no".

Listen to the whole interview with David Parker duration 6:12
from Morning Report

There has been speculation a decision from the coalition government on whether to bring in capital gains tax would come this week after National Party leader Simon Bridges said "multiple very good sources" had told him sign-off was due on Monday.

The government has been considering its response to the Tax Working Group's recommendations for a broad capital gains tax on land, farms and most shares and business assets - including the bach - but excluding the family home.

Prime Minster Jacinda Ardern has said small businesses and farming would be top of her mind when assessing options for a tax.

A capital gains tax (CGT) is a tax on the profit from the sale of an asset.

The National Party has attacked the CGT recommendations as "an assault on New Zealand's way of life" and is vowing to repeal it.

Political scientist says any CGT announcement before Easter signals govt 'embarrassed'

Victoria University political scientist Bryce Edwards told Morning Report the government was likely to present a "watered down" version of the CGT proposals.

Bryce Edwards. Photo: Twitter

"Because really this is the big test of this government in this term. It's their major policy issue, and it speaks to so much about what the government has campaigned on.

"If they're weak on this ... I think a lot of supporters will lose faith."

It would be "disappointing" if the government made the announcement today or tomorrow - ahead of the long Easter break - which would suggest the government was "embarrassed" by its decision and wanted to bury it, Dr Edwards said.

He said after a decision was announced the issue was unlikely to be brought back up again by Labour or the Greens for the next five or 10 years.

"What we've seen in this debate over the last few months really is a traditional left/right split" - Bryce Edwards duration 4:14
from Morning Report

Wgtn business group expecting 'diluted' CGT

Wellington Chamber of Commerce head John Milford told Morning Report its members were "overwhelmingly" opposed to a capital gains tax.

He said more than 60 percent of members surveyed were against a capital gains tax, with 18.6 percent in favour.

"No to a new tax at the highest possible tax rate on top of a lot of other changes that are happening for the business community at the same time.

"We're already one of the highest taxed in the corporate world in the OECD [countries] with our company tax where they are, our regulatory taxes are quite high as well.

"So when's enough enough?"

He said bringing in the tax would be risky for the government, and he thought it was likely to "diluted" if it did go ahead.

Wellington Chamber of Commerce warns a CGT duration 3:40
from Morning Report

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