John Key MP National Party Finance Spokesman

14 June 2005

Capital gains tax coming under Labour

"New Zealand residents currently exempt from any capital gains tax on shares they passively own in countries such as Australia and the UK could end up liable for yet another tax as soon as April 1, 2007," says National Party Finance spokesman John Key.

"Dr Cullen confirmed the potential change in Parliament today.

"When it comes to Australia there is no economic logic behind this new tax grab.

"Many of these companies invest capital, create jobs and pay tax here in New Zealand. The move runs contrary to the creation of a single economic market with Australia.

"We should be removing roadblocks like the streaming of imputation credits and non-resident withholding taxes, rather than putting up new hurdles.

"With billions invested offshore, including through the Superfund, the risk is that capital will be repatriated to New Zealand and will flood our small stock market.

"This in turn will see the capital flooding back into the property market.

"Michael Cullen's new capital gains tax will only lead to New Zealanders having less diversification in their investments and less choice. That is undoubtedly a negative thing," says Mr Key.

ENDS

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