77% of NZ’s business leaders say a CGT is needed as chorus for CGT increases

How many successful CEOs can manager Christopher Luxon snark at after running a government airline with a near monopoly on the domestic market?

After taking a crack at ANZ Boss Antonia Watson for her support of Capital Gains Tax last month, a new line of CEOs is forming to support the idea of more taxes.

Can someone please break it to PM Luxon that Capital Gains tax goes to the government and not the banks – Why is he spreading lies to the NZ people?

Sam Stubbs, Simplicity Founder and MD wrote for The Post:

Rarely do I agree with the CEO of the ANZ. But on capital gains taxes, I find myself in violent agreement. It’s time.

Why?

Look at the recent sale of an apartment in Wellington by the Prime Minister. The capital gains he made on it are taxed less than other investments, including KiwiSaver.

And in buying investment properties, the Prime Minister was doing a rational thing. That’s because tax is a very important factor in any investment decision. No one should fault him for investing to make the highest after tax gains.

And buying and flipping investment properties is the great Kiwi tradition. For generations it has been the most reliable way to get rich. And I bet that most KiwiSaver managers – who should know these things – have most of their personal wealth in property.

Antonia Watson, ANZ NZ CEO, caused a stink saying she supported a CGT.

Yet all those tax advantaged profits from investment properties haven’t provided more housing.

In theory, the rising prices of investment properties should have incentivised developers to build more. And with a tax incentive like we have, we should be swimming in houses.

But here’s the rub. We aren’t swimming in houses. Actually, we’re drowning in housing unaffordability. We simply don’t have nearly enough homes to live in, in spite of offering massive tax incentives to build.

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ASB’s boss Vittoria Shortt also spoke up for taxes:

ASB chief executive Vittoria Shortt says New Zealand has to collect more tax to invest in the infrastructure the country so desperately needs.

“I think New Zealand has to really lean into taxes,” Shortt told The Post in a wide-ranging interview.

“We’ve got to invest in this country. It’s a pretty simple equation,” she said.

“Can anybody sit back and say today that we’ve got everything we need in the country?

“We probably do need to pay more tax….I paid more in Australia.”

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And last month, 77% of the 100 surveyed business leaders in NZ “told the Government it was time to wake up and smell the capital gains tax.”

None of this is rocket science or even beneficient behaviour.

It’s merely drive by our reality.

As Treasury has been advising throughout the year, even going publicly to do so, New Zealand faces structural headwinds. (And Treasury has specifically advocated for CGT)

Put simply, revenues will struggle to meet costs due to a significantly aging population, climate change costs, healthcare needs etc. – and chopping down trees now for a quick fire is only temporary, and reduces the ability to meet future needs.

i.e. cost cutting is not the way out and can actually make things much worse by reducing the govt’s tax take [although that’s also a way to force in privatisation by claiming ‘our hands are tied’]

When the government cuts people and investments – as it is doing in Health and our infrastructure programs – it merely defers those expenses to a later, much, much more expensive time.

This government’s entire strategy appears to be to privatise and corporatise as it flings open the doors to foreigners who now say NZ’s assets look cheap, “because there isn’t a lot of competition for them, the economy is weak and, on the flipside, recouping the cost of the investment is relatively easy from New Zealand consumers.”

Does that sound like a ringing endorsement? Nevertheless, Luxon is fixated on privatisation – despite the serious and negative implications.

Meanwhile he and David Seymour are working hard to politik and drive fear about CGT into the NZ population, claiming CGT is a non-starter.

Today, Barbara Edmonds, Labour’s Finance Minister asked: “Why are you so afraid of Capital Gains Tax?”

Most of our money is in real estate, and our debt to foreign owned banks. There is a reason why most countries have a CGT on investment properties. And if we are serious about productivity and fairness for our future generations, now is the time for that debate – unfettered by misinformation and lies.