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Labour Won't Rule Out Land Tax - Prebble

Extract from speech to Financial Services Federation AGM, Wellington Club 88
The Terrace 2 pm Wednesday 22nd September 1999
Hon Richard Prebble CBE, Leader ACT New Zealand

The statement by Michael Cullen this week that the Alliance's proposed land tax
is, quote, "a matter for coalition discussion" has sent a ripple of fear
through the country.

If land tax is a matter for coalition talks, it follows that a Labour/Alliance
government may introduce the tax.

I wrote to Helen Clark seeking Labour's stance and expecting that Labour would
give a concrete guarantee that land tax would not be introduced. Instead, from
Michael Cullen's statement it's now clear that land tax is on the
Labour/Alliance agenda.

Labour's promises amount to $3 billion. Labour's income tax increase will
raise just $300 million. I am told Labour's strategy is to let the Alliance
promise the $2.5 billion tax increases.

Why is land tax unfair? Land tax is paid for by small business, most of whom
lease their commercial premises.

In the standard real estate lease form there is a clause saying that the tenant
shall pay any land tax.

Some modern agreements have no such clause. So some land owners will have to
meet the land tax without being able to pass it on. That is unjust. For those
commercial property owners, this proposed land tax would simply be
confiscatory.

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