Simon Bridges: Coalition shows frayed edges over divisive CGT

Opinion 14/03/2019
Simon Bridges. Photo: Getty.

By Simon Bridges, National Party leader.

OPINION: Is it any wonder that many New Zealanders are worried about a Capital Gains Tax?

Ministers from Labour, the Greens and NZ First have all chimed in on the debate but they aren’t singing in harmony.

Associate Finance Minister James Shaw, who is Greens co-leader, has claimed a far-reaching Capital Gains Tax would do everything from fixing a housing crisis to making the economy more productive. His Greens Co-leader Marama Davidson has gone further, saying it should be extended to the family home.

Employment Minister Willie Jackson, from Labour, wants a Capital Gains Tax ‘firmly on the table’ and has called on the Government to be ‘courageous’ while Deputy Prime Minister Winston Peters says NZ First won’t support any policy that complicates the tax system and leads to a boom time for accountants.

The Prime Minister says it won’t be as bad as people fear but she is refusing even to commit to a revenue neutral tax package. She won’t rule anything in or out before the Government’s official response next month but she has repeated that a Capital Gains Tax will help the housing market, a notion debunked by the Tax Working Group itself.

She has also claimed it is about fairness. Many Kiwis would disagree. A Capital Gains Tax would hurt small business owners, people who live on a lifestyle block, farmers and those saving for their retirement including KiwiSaver members.

It would hurt our capital markets and make it harder for people to raise money to build a business.

National has studied the Tax Working Group’s final report and has used its assumptions and recommendations to gauge the impact on New Zealanders.

Its centrepiece is a Capital Gains Tax, which is what Labour was looking for when it hired Sir Michael Cullen to chair the Group.Disgracefully, he will remain on the payroll at $1,000 a day for months after the report was delivered.

So far Sir Michael has used the extension of his contract to attack the Opposition’s criticism of a Capital Gains Tax. That is frustrating when the Government is being evasive and ducking questions.

The Government is wrong to think it can help New Zealand by imposing more taxes. Instead it will hurt growth and the creation of new jobs.

National believes Kiwis should keep more of what they earn and would repeal a Capital Gains Tax in its first term.

Simon Bridges is leader of the National Party.