Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search


Closing the Gap statement on CGT decision

Today’s decision ruling out a Capital Gains Tax for New Zealand is hypocritical from a Government that campaigned on improving wellbeing, reducing inequality and governing on the basis of fairness, efficiency, and rationality, said Peter Malcolm, the spokesperson for the income equality group Closing the Gap.

“Improving wellbeing and cutting inequality requires a tax system that boosts the income of the those on lower incomes and reduces that of the very well-off,” Mr. Malcolm said. “But that is not going to happen under a government that previously ruled out more steeply progressive tax scales, and that has now decided against a comprehensive capital gains tax.”

Let’s revisit some of the rational arguments for a capital gains tax, Mr. Malcolm said.

Firstly New Zealand is the only western democracy to not tax capital income.

Secondly, economic efficiency and fairness mandate the introduction of a CGT. Not taxing capital profit skews investment toward property, which does nothing for workers or for the nation’s productivity.

“I feel really sad that a Government that has promised so much, has given way to the wealthy, the selfish and the greedy,” Mr. Malcolm said. Without a CGT there is an incentive to invest in assets where the capital profit is not taxed. Likewise with farming where too many farmers and their bankers ignored profitability because the farm was likely to inflate in value delivering tax free profits. Our productivity as a country has long been lower than equivalent western nations. One reason is that too much capital is invested in assets for tax free capital gain and not enough in better technology and mechanisation to boost productivity. As a result New Zealanders wages are lower and we all are poorer than we should be.

The other issue; that of fairness, needs careful thought. Many in the private sector and a number of politicians are claiming that small businesses will become less attractive to their owners. The argument is that owners of small businesses get up and go to work in the morning because they know that one day they will sell their business and make a tax free profit on that sale.

But what about all the other hard working New Zealanders who also get up early and work hard all day for wages. A sheep shearer is taxed on his or her income, as is a bricklayer, carpenter or school teacher. These are hard working people who have their earnings fully taxed. Where is the fairness in allowing owners of a business, farm or rental home be somehow exempt from tax on their capital profits.

In looking at the question of fairness it would be quite unfair to exempt the family home. Very expensive homes will become a favoured investment if the home is left outside the net. Certainly there are very good reasons to encourage the ownership of your own home. One is that home ownership creates greater financial resilience at retirement. But there could be exemption levels.

And to sum all this up, where is the fairness in, a person in a job paying $50,000 a year, paying approximately $8000 in tax and a person selling an asset with a profit of $50,000 paying no tax.

© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On The Saudi Oil Refinery Crisis

So the US and the Saudis claim to have credible evidence that those Weapons of Oil Destruction came from Iran, their current bogey now that Saddam Hussein is no longer available.

Evidently, the world has learned nothing from the invasion of Iraq in 2003 when dodgy US intel was wheeled out to justify the invasion of Iraq, thereby giving birth to ISIS and causing the deaths of hundreds of thousands of people. More>>


PM To Japan, New York: Ardern To Meet Trump During UN Trip

“I’m looking forward to discussing a wide range of international and regional issues with President Trump, including our cooperation in the Pacific and the trade relationship between our countries." More>>

PM's Post-Cab: "A Way Forward"

At Monday's post-cabinet press conference, Prime Minister Jacinda Ardern announced a number of actions in response to the Labour Party's mishandling of sexual assault complaints. More>>


Gordon Campbell: On Allegations Of Left Wing Media Bias

“Left wing bias” accusations date back at least to the mid 1990s... The charge of left wing bias was ridiculous then, and is ridiculous now. More>>

Next Wave Of Reforms: Gun Registration And Licensing Changes Announced

“The Bill includes a register to track firearms and new offences and penalties that can be applied extraterritorially for illegal manufacture, trafficking, and for falsifying, removing, or altering markings – which are a new requirement under the Firearms Protocol.” More>>


Gordon Campbell: On Labour’s Mishandling Of The Alleged Sexual Assault

The focus of Labour’s alleged sexual assault scandal has now shifted from the party organisation to the Beehive... This is now a crisis of Beehive management and response, not something occurring at a distance within the party organisation. More>>


'History Rectified': Rua Kēnana To Be Pardoned

An official pardon for Tūhoe prophet and leader Rua Kēnana is one step closer after the Te Pire kia Unuhia te Hara kai Runga i a Rua Kēnana: Rua Kēnana Pardon Bill was read in Parliament for the first time today. More>>


Mental Health: Initial Mental Health And Wellbeing Commission Appointed

The Government has announced details of the initial Mental Health and Wellbeing Commission which will play a key role in driving better mental health in New Zealand. More>>


people outside the meeting house at WaitangiEducation: NZ History To Be Taught In All Schools

“We have listened carefully to the growing calls from New Zealanders to know more about our own history and identity. With this in mind it makes sense for the National Curriculum to make clear the expectation that our history is part of the local curriculum and marau ā kura in every school and kura,” Jacinda Ardern said. More>>


Sexual Assault Claims Mishandled: Labour Party President Resigns

Jacinda Ardern: “This morning I was provided some of the correspondence from complainants written to the party several months ago. It confirms that the allegations made were extremely serious, that the process caused complainants additional distress, and that ultimately, in my view, the party was never equipped to appropriately deal with the issue…" More>>





InfoPages News Channels