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No capital gains tax ‘ever’ not the way forward

Finance Spokesperson
Economic Development Spokesperson

4 October 2011

No capital gains tax ‘ever’ not the way forward

National ruling out ever introducing a capital gains tax is hugely irresponsible in the light of New Zealand’s double credit downgrade, Labour’s Finance spokesperson David Cunliffe says.

The admission that a National government would never introduce a capital gains tax was made by Bill English, on behalf of the Prime Minister, in response to a question from Labour’s Economic Development spokesperson, David Parker.

“Vetoing a measure recommended by various national and international agencies, including the IMF, the OECD, Treasury and the Reserve Bank is arrogant and very unwise given the double downgrade of New Zealand’s sovereign currency rating,” David Cunliffe said.

“All but two other OECD economies use capital gains taxes as a broad revenue measure to reduce tax bias towards property speculation and direct precious investment towards the export sector,” David Parker said.

“Labour’s tax plan which includes a CGT - that excludes family homes - will cut net Crown debt to zero by 2021/22, keeps SOE assets in public hands, and fund a $5000 tax-free zone for all taxpayers,” David Cunliffe said.

“A CGT would also help reduce the country’s private debt mountain and, as a result, the current account deficit - by reducing the tax incentive for property speculation,” David Parker said.

“Perhaps that’s why the Government’s own Tax Working Group favoured such a tax. It knows, as Labour does and our OECD peers do, that a CGT, is a fair and reasonable way of broadening the tax base and spreading the load,” David Parker said.


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