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Dunne: Labour's desperate, ignorant attack on achievement

Dunne: Labour's desperate, ignorant attack on achievement

Labour's new tax package is little more than a massive attack on personal achievement and success, UnitedFuture leader Peter Dunne said today.

"The 'better off should pay their fair share' argument that Labour is pitching is just a dog whistle call to Labour's traditional constituency to come home.

"This has nothing to do with good policy or sound economics, but everything to do with satisfying entrenched envy within the Labour left, and seeking to stop Labour haemorrhaging its core voters to the Greens," he said.

Mr Dunne said the policy represents the end of the broad economic consensus since 1984, and means New Zealand faces a period of more disruptive policy shifts every time there is a change of government.

"That uncertainty will not be good for the New Zealand economy, or jobs or future prosperity," he said.

As Revenue Minister, Mr Dunne says Labour's capital gains tax would be a "bureaucratic nightmare".

"I doubt it could be implemented easily or quickly; the revenue it could raise is likely to be low for at least the first decade, but compliance costs will be immediate and significant. Certainly it would not raise anywhere near the revenues needed to pay for only one of Labour's spending promises, exempting from tax the first $5000 of earnings, until at least 2025.

"Gift duty would have to be reintroduced, and more than likely death duties and other wealth taxes as well to prevent avoidance opportunities - these are all inefficient taxes with high compliance costs.

"Our existing regimes for the tax treatment of shares and other financial arrangements would also have to be revisited to avoid over-taxation, or double taxation occurring," he said.

Labour's proposed GST exemptions on fruit and vegetable are nonsense, he said.

"For example, why should apples from California be exempt from GST, while Wattie's canned peaches from Hawke's Bay remain taxable? Where is the benefit to New Zealand-produced food in that distortion?" he asked.

Mr Dunne said Labour's tax policies are "desperate, erratic and plain ignorant".

"The fact they want to put up taxes for higher income earners shows they have learnt nothing from the last decade.

"Their 1999 top tax rate increase - which led to the explosion in trusts as tax avoidance vehicles - was the biggest single tax blunder of recent times.

"The remarkable sadness of today's announcements is the Labour is now promoting policies to top even that blunder. On 26 November they will learn how costly that blunder will be," he said.

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