About the CGT decision

Written By: - Date published: 8:06 am, April 18th, 2019 - 232 comments
Categories: capital gains, class war, Deep stuff, Economy, greens, jacinda ardern, labour, national, nz first, Politics, tax, winston peters - Tags:

Well that was a bugger.

The brutality of MMP Politics and New Zealand First’s withdrawal of support has meant that there will be no new capital gains tax introduced.

I always thought that the proposal was brave and that the final version would be pared back from the tax working group’s recommendations. The valuation exercise required of small businesses would have made it too complex to tax private shares.  But I thought there was a compelling case for a CGT on land and on public company shares.

Yesterday’s announcement was something of a shock.  But Michael Cullen in his usual way has explained why the decision was, with the benefit of hindsight, utterly predictable.

From Jason Walls at the Herald:

Cullen said NZ First may have been worried about going down further in the polls if they had supported a CGT.

Cullen added that he was disappointed with what happened – “but not in the least bit surprised”.

“I thought it was always going to be very difficult to persuade Peters and New Zealand First to vote for any form of CGT, given their natural constituency is older, whiter than the population as a whole.”

He said this demographic would have been more susceptible to a CGT than most of the population.

In fact, he said he was never really confident that the TWG’s CGT recommendation would get across the line.

In terms of the political implications and the reasoning behind Jacinda Ardern’s decision to rule out a CGT in the future I believe Audrey Young has got it right:

… [Ardern] explained her third position on capital gains by saying while she supported it in principle, she was a pragmatic idealist.

Another way to explain it is to imagine the counter-factual.

Pragmatically speaking, if Ardern had not ruled it out, three things would have happened which she has now stopped by refusing to campaign on it again.

National would have hounded Labour about it week in and week out.

Even a diluted capital gains tax would have presented opportunities for National to portray it as a Trojan Horse for further expansion.

New Zealand First leader Winston Peters would have continued to campaign to voters as the ultimate insurance policy against any further expansion of capital gains tax to farms and other businesses.

The only way he could do that now would be to suggest that Labour and Jacinda Ardern might not keep her word on a capital gains tax – and that is not something a Deputy Prime Minister would say about a Prime Minister.

The third reason, and not least, for Ardern’s decision to rule out a future capital gains tax is that the Labour Party base would have expended a lot of energy about whether it should go into its fourth consecutive campaign in 2020 supporting such a contentious tax.

It would have been a distracting and possibly divisive debate.

Ardern has decided it is not worth it. She has built up political capital in her 18 months as Prime Minister and she has decided to cash it in.

Of  course it hurts.  Seeing the right bray on social media and the already wealthy celebrate the retention of their privilege was a real lowlight.

It is not the end of the debate about our tax system.  The changes the Government made to the brightline test has made a significant difference at least in Auckland and house prices have been stalled for a while.

And the budget will present a further opportunity to address inequality.

I trust that this decision is part of an overall negotiation process and that New Zealand First will sign up to significant climate change policies.  There will be intense disappointment on the left if the New Zealand First dinosaurs prevent meaningful action in this most important of areas.

And this is MMP.

A Labour Green government is capable of making brave decisions. While we continue to rely on New Zealand First for confidence and supply these sorts of shocks will always be possible.

232 comments on “About the CGT decision”

  1. That_guy 1

    If the Greens don’t get some significant action on climate change they should walk.

    • The Lone Haranguer 1.1

      Not really. Because walking =

      Having no presence at the big table
      Having no chance to influence discussion in Cabinet on matters important to the Green voters
      Having no way to moderate the NZF ministers,
      Having no more limo rides to the airport.

      Call me paranoid if you wish, but it was Anderton who broke up the Alliance, its was Helen who shafted the Greens, and now its Jacinda who has again shafted the Greens.

      And my reading of politics over the past 25 or so years was that Anderton was a confidant/reliable advisor to Clarke who is a confidant/reliable advisor to Ardern.

      The more things change, the more they stay the same. Or as my pinko mate tells me it SSDD.

      • That_guy 1.1.1

        I don’t think they’ll need to walk because I think they’ll get what they want. Or at least some of it.

        But I guess the Green argument would be, who cares if you’re at the big table when the table’s underwater?

      • Marcus Morris 1.1.2

        If you did a bit of research I think that you would find that the Greens left the coalition because they wanted to market their own brand with more definition. Can you elaborate on your claim? Helen did not shaft the Greens, Winston refused to go into coalition with them and in what way has Jacinda done the Greens down. Still, why spoil a good story with a bit of accuracy?

        • The Lone Haranguer 1.1.2.1

          Marcus,

          And I didnt mention the Greens, just that the Alliance got broken up by Anderton, so please dont misquote me.

          Helen sold the Greens down the river, because working with Winston in Government suited her more than working with the Greens in opposition. Prior to the election results being finalised, the Greens had every expectation that they would be in bed with Labour. You can call the final outcome what you want, but I would call that being shafted. Others may well agree with you and may well disagree with me.

          And if you look at the CGT final result, if I were a Green supporter, I would feel that Jacinda and Labour had shafted us.

          My perception may differ from yours, but I doubt mine lacks accuracy.

  2. mango 2

    I know that a lot of people will disagree but for me keeping national out of power is well worth it.

    • Kevin 2.1

      Power for powers sake? No thanks.

    • Ankerrawshark 2.2

      Mango I agree with you.

      It would have been political suicide to bring in this tax.

      I want labour to fix child poverty. Inequality, housing and climate change. And improve mental health services. As long as we get some progress on this, and I believe we are, I am prepared to sacrifice CGT…….the countries that have it still have the above problems.

      Btw another thing I wanted from the govt was guns laws changed and inclusivity/anti racism. Tick, tick

      • fustercluck 2.2.1

        And yet by the majority of measures child poverty is increasing, Kiwibuild has produced less than 100 houses and emissions are increasing with no end in sight. It is almost as if the model of taking from some and give to others is flawed and a different model is needed. Hm.

        • ankerawshark 2.2.1.1

          Those are all fair points fustercluck, and I am wanting Labour to continue to work on remedying the situation.

          They have build 1000 state houses, reversed the Meth house debacle, increased minimum wage, adjusted 90 day trials for big corporations, decreased prison population by 1000

          These are small gains. I want them to do more. But I am under no allusions that change would be quick.

  3. Muttonbird 3

    In the event of Labour/Greens getting over the line in 2020 I hope JA remembers this treachery and doesn’t invite NZF into government.

    • Dukeofurl 3.1

      Its not ‘treachery’ . The Coalition agreement doesnt include a CGT.

    • Grantoc 3.2

      Muttonbird

      The problem with this theory is that by opposing CGT so absolutely, and in accordance with the wishes of its supporters, NZF has consolidated its position and has enhanced its electability in 2020.

      The most likely scenario is that we have a repeat of the 2017 election result. This means that Labour and the Greens will continue to be saddled with NZF.

      Perhaps Labour’s best bet was to make CGT a confidence issue now and even go so far as to force an early election on the issue. It would have been a risky gambit; but because of the PM’s personal popularity, it may have paid off. That is a Labour/Green win along with NZF’s removal from parliament.

      The current perception is that NZF, with about 7% of the vote, holds the keys of power, and a Labour/Green coalition cannot implement their agenda without Winstons approval.

  4. Formerly Ross 4

    MS

    You didn’t mention that the PM has ruled out a CGT for the entire duration of her leadership. So irrespective of whether NZF is still around after the next election, a CGT is a non-starter. Those blaming Winston seem to have ignored this fact.

    • mickysavage 4.1

      It was addressed in Young’s comment. Ruling it out means that it will not be a campaign issue in 2020 or 2023 for that purpose.

      • Wayne 4.1.1

        However, you have essentially ignored the fact in your principal item that the PM has said she will never campaign for a CGT while she is PM. That implies that even if there was 61 seats between Labour and the Greens there still would not be a CGT.

        It does raise the question whether the PM was ever very enthused about CGT. Yes, she had argued for it before, but it clearly was not one of her main priorities. And certainly not when there was such opposition to it, including from people like Chris Trotter.

        It seems to me that the PM has other things that rank much more highly of her list of priorities. Presumably Climate Change and Children. I would expect to see much more action on these. I also think she will choose a policy mix in these areas that does not generate such opposition. She will want her policies to be widely accepted.

        • mickysavage 4.1.1.1

          Kia ora Wayne

          It does raise the question whether the PM was ever very enthused about CGT

          She raised it during the intensity of an election campaign. This normally suggests a deep commitment to the principle.

          It seems to me that the PM has other things that rank much more highly of her list of priorities. Presumably Climate Change and Children

          These are laudable goals. If there is no significant movement then I agree that Jacinda will have problems.

  5. adam 5

    Squirrel – no wait – the labour party held firm on hard right economics…

  6. esoteric pineapples 6

    “A Labour Green government is capable of making brave decisions.

    Not sure about this. The level of opposition would be the same and such a government would still be worried about losing the next election if it introduced a CGT. I don’t really buy the It’s Winston’s fault” line. Where there is a will, there is a way. No will, no way.

  7. BM 7

    Does Labour discuss anything with NZ First, the Greens or are the three parties completely siloed?

    Is it just ministerial business and that’s it?

    • McGrath 7.1

      My understanding is that the Greens are out of cabinet on the cross benches. They could wield significant power if they so desire, but choose not too for whatever reason.

      • BM 7.1.1

        Just seems weird to go down the CGT path when it’s well known that Peters hates the idea of a CGT.

        You’d think there would have been some sort of initial agreement before they proceeded, otherwise what was the point of all the angst and cost?

        Unless the whole thing was just elaborate theatre to bolster the chances of NZ First and the Greens surviving 2020.

        But rough playing your supporters for fools though.

        • McGrath 7.1.1.1

          I would have thought there would have been at least some CGT targeting landlords who own significant portfolios.

          • Dukeofurl 7.1.1.1.1

            yes. A compromise at just the residential landlords and excluding bach owners and those with 1 second property would have been a start.

            Other than that, Reserve Bank restrictions written into legislation to target LVR for large landlords should be indroduced- starve them from using unearned capital to buy more houses.

          • Adrian 7.1.1.1.2

            The Brightline test does this to a significant extent for people who are flipping houses (e.g. buying a house cheap, renovating it, and then selling it for me quickly.). And… the no negative gearing laws that are likely to happen will deal with the borrowing off losses to buy more issue.

  8. Incognito 8

    At least now we have certainty that property will remain by far the most lucrative and attractive investment in the foreseeable future. This is good news for Mum & Dad investors who can now plan for their next rental acquisition into their portfolio without any political angst heaped onto them. For productivity and GDP, not so good.

    Everybody is in favour of fairness and equality until it hurts them in the pocket. Even the thought of hurting in the pocket hurts. Enough said.

  9. esoteric pineapples 9

    “I trust that this decision is part of an overall negotiation process and that New Zealand First will sign up to significant climate change policies.”

    Why would anyone expect Labour and NZ First to do anything serious about climate change if they haven’t got the courage to introduce a CGT?

    • mikesh 9.1

      We are probably better off without a CGT if they don’t have the courage to include the “family home”.

      • The Lone Haranguer 9.1.1

        I agree with you, but thats never going to fly.

        Perhaps a novel approach would be to tax everything (private homes, fine art and all the other proposed exemptions) and then issue all individual tax payerswith IRD numbers (as in real persons so not trusts or companies) with CGT tax credits to a certain value – say $100,000 each by way of example – and then make the CGT tax credits trade-able.

        If Flash Harry makes $500,000 on his property/art sale then he gets taxed at the rate agreed (call it 25% for now) so Flash Harry needs $125,000 to make good on his tax bill.

        He can then go to the CGT tax credit markets and buy $25,000 of tax credits off Sally Perpetually-Poor for say $20,000.

        So Harry has benefited by $5,000 tax savings and Sally has $20,000 in the bank. And if Harry makes another similar profit next year, he will be out buying $125,000 of tax credits – again probably off those who see no future value in them, for themselves.

        Its not an impossible option.

        • Tuppence Shrewsbury 9.1.1.1

          You want to create a market for tax credits? Thereby numerating there scarcity and enabling arbitrage? I think it’s a great idea, but left wing economic theory is that the market doesn’t serve its poorest well, or fairly.

          How do you reconcile those two things?

          • The Lone Haranguer 9.1.1.1.1

            Well Im not a left wing economist by any stretch of the imagination, but if all folk (including the poor) get allocated a $100,000 CGT tax credit, in my TOP sympathising head, Im seeing that the “poor” now have a trade-able asset which they might choose to keep or choose to sell.

            So they gain an asset which I see as being a good thing.

            And I think its a darn sight fairer to CGT all houses so the working poor of say Tokoroa have the same handout/handup tax wise, as the rich multi house owning MPs in other areas.

            The tax credit will never sell for more than its face value and maybe it will sell for less, but regardless of that, I see it meeting the “fairness” test, and I see it as meeting the “helping the poor” test.

            So why not?

            • alwyn 9.1.1.1.1.1

              Before i comment on this could you answer two questions.
              Is this $100,000 credit an annual amount, or is it a onetime thing?
              If it is a one-off does it only apply to people who are alive at a particular time or do babies get one when they are born,or a migrant when they first enter the country?

              • The Lone Haranguer

                Hi Alwyn,

                To be fair I havent really thought the details thru too far, but I assumed it would be a “once per taxpayer” kind of deal.

                I figure its kind of no cost to Government, as Government doesnt tax CGT in the first place, but its a huge benefit to the poorer folk, and it give room for a comprehensive CGT including on the family home.

                • alwyn

                  It is certainly an interesting approach to the redistribution of income.
                  I’ve had a quick look at the numbers though and I don’t think it will really be effective.

                  Here are a few basic numbers about the New Zealand economy. They are pretty rough but they should illustrate the situation.
                  GDP is about $290 billion. Population is 4.8 million. Births are around 60,000/year and permanent long term immigration is about 150,000/year. Our national debt is around 23% of GDP.

                  Therefore, as a one-off we would have to provide about $480 billion to give each resident the $100 k you nominated. We would then have to add a further $21 billion each year for new arrivals.
                  This would of course all be Government debt as the credits can, on demand, be redeemed to pay CGT obligations.
                  The TWG suggest that their scheme would, if starting in 2021, provide CGT amounts which would rise steadily to about $6 billion in the 2030/2031 year. Over that 10 year period the tax would come to about $3 billion/year on average.

                  Now they would clearly never receive any tax income. The credits they provide would start with a lump sum of $480 million and go up by $21 billion/year. That represents about 100 years worth of obligations that will have been financed compared to the 2030/2031 year debts and they will obviously all be paid from the credits.

                  The cost of buying these credits, for the people who have to pay the CGT, will, I suggest, be nugatory. I’m sure that a cent in the dollar would be quite enough to get people to surrender their hypothetical future benefits. I would certainly take that amount unless I was quite sure I would use the credit of $100k in the first year or two. I’m sure the scheme would not last last much longer than that. The Government will have to honour the credits at face value and will not receive any income at all from the CGT credits they are dishing out.

                  In the meantime of course National debt will rise from about 23% of GDP today to around 185% in 2021. That will put us in second place in the world behind only Japan and ahead of such struggling countries as Greece and Sudan.

                  Now, if the CGT applied to everything the amount of tax due would clearly rise a lot. I would suggest it is unlikely to reach the $21 billion a year at which the Government would start to receive some real payments instead of the credits they are dishing out free exceeding the amount of credits they have to honour.

                  Not a great prospect I would suggest. Sorry. It sounded quite an interesting idea till I plugged in the numbers.

                  • The Lone Haranguer

                    Thanks for crunching the numbers.

                    The TWG never did their numbers allowing for CGT on family homes tho, which I think makes my arguements quite different to theirs. So the CGT tax liability wouldnt be a 100 year deal.

                    I saw the CGT tax credit – and my hypothetical 25% tax rate – as being start point for a discussion, and I appreciate your comments.

                    Government currently had the ability to ringfence types of taxes, so they can ringfence these one to only be usable for paying CGT. Now I figure if at the same time, a universal CGT applies to ALL property, then those buying and selling will be active in the “CGT market” which by my reckoning could be easily administered by the IRD.

                    And yes, my 80yo mother may not use her CGT tax credits, but she might sell cheaply or gift them to her grandkids, who might then sell them to get a $75,000-90,000 deposit together to buy their first home. I think that could be a good thing.

                    Equally, a person who has maybe never owned a home (my Sally Perpetually Poor) could sell hers in order to get a deposit together for her own home.

                    Honestly, I havent thought too much about what to do with minors and recent immigrants. But I would think that you wouldnt get the tax credit until you are 18 (or voting age) if born in NZ, or until after some period of years, for those who are not born in NZ.

                    I wouldnt want to discriminate, but then neither do I want to see the tax credits go to folk who are “just passing thru NZ on their way to Australian citizenship” either.

                    I think because the tax would also apply to the capital gain on the family home, that the tax would be cash positive in no time flat.

                    Its just an idea, born out of my view that all property should be subject to CGT, and that, in introducing something thats comprehensive, that there are benefits for the poorer folk (a group Im probably not a member of), and something that might have a chance at electoral acceptance – given that the PM told us she canned the CGT due to its electoral unaceptability.

                    I appreciate the time you put into the suggestion, and your thoughts on it.

                    • alwyn

                      The TWG were forbidden from looking at a CGT on the Family home.

                      It doesn’t really matter the age at which you get the credit/ It has to happen sooner of later and then it becomes part of the Government debt. It is much smaller of course than the one-time $480 billion I mentioned. Of course if you didn’t get it until you had been in New Zealand for some number of years or reached 18 you would get a major question of fairness to the people who were excluded. Why should they have to pay a CGT when they don’t get the the benefit of the allowance?

                      There is a lot of wealth in housing of course. The total value of residential property is about $1000 billion. How much is family homes I don’t know. It isn’t really a field of any interest to me.

                      That of course would be the base from which the gain would be calculated. I don’t think anyone would dare count gains to date as being taxable.
                      It also makes it very hard to be fair unless you allow a roll-over of the CGT owned to your next house. Would you shift from Wellington to Auckland say if you had owned your Wellington house for 20 years and in that time it had risen from $200 k to $1 million. The CGT you would have to pay would be, on your 25% figure about $200k. You would therefore have to start again with only $800k rather than $1 million.

                      I will let you have fun with it though. I don’t think the Labour Party will flip again and start talking about introducing a CGT again until they dump Ardern as leader. Neither of course will National. I don’t think I will bother considering it now that it has been totally ruled out for the foreseeable future. It was interesting to think about it though.

                    • The Lone Haranguer

                      The reason I suggested that NZ born folk should only get their CGT tax credit at voting age, it that really, very few minors buy their first house before 18 from their own earned resources,

                      I wouldnt give it to under 18s as I wouldnt want to see “outside pressures” force them to sell up and not use the benefit for their own housing benefit at a time when they can use it for themselves.

                      I dont think any political party in NZ would embrace the CGT tax on all property with a $100,000 CGT tax credit, so as you say, its a hypothetical idea .

                      But somebody needs to rethink CGT, because as I sit here tonight, its dead in the water in its current guise.

                    • alwyn

                      My last word. As you say. at the moment CGT is dead, and probably will remain so for the rest of my life.
                      I quite agree with your first two paragraphs. Yes there would probably be pressure for youngsters to sell up if the family needed the money. Sad but true.
                      However all I was meaning to suggest was that, sooner or later, the CGT credit they would get was going to have to be reflected in the National Accounts as a Government debt.

            • mikesh 9.1.1.1.1.2

              Perhaps a taxpayer receiving W4F could sell part of his future entitlements as a tax credit to someone hit by a CGT. It would be a bit like “capitalizing on the family benefit” as used to occur back in the fifties.

  10. Tiger Mountain 10

    Ladder pulling, smug, “don’t know, and don’t want to know” New Zealanders, addicted to property speculation, “flicking”, and neo rentiers, were a significant part of the background to this decision. As were the hordes of owner ops, self employed, franchise holders, contractors, small business and SME operators, whipped by the Nats like some lynch mob.

    A second term for this Govt. is more important than a diluted CGT at this point. CGT can wait. But the Govt. has to move beyond their miserly fiscal cap on Debt. to GDP, and significantly move on a massive State House/apartment build, charge on with Fair Pay Agreements and radically reform WINZ/MSD.

    • Kat 10.1

      Agree, The current govts move into the workings of the construction arena has the inklings of a resuscitated MOW’s about it. Encouraging and relying on market forces has proved useless and detrimental in getting the best results and hopefully will ultimately be buried along with all the other neo liberal myths that have invaded this country.

    • Anne 10.2

      100% correct TM.

      As ‘the well known economist with the foreign name that I can never remember’ has said on numerous occasions:

      “Now is the time to borrow money on the global market. The terms and conditions have never been better”.

      Grant Robertson has got to get over his fiscal conservatism and go for it.

  11. Brutus Iscariot 11

    Helen would have found a way to ram it through. Ardern isn’t a leader, she’s a figurehead.

  12. Sacha 12

    Next question: how will this government pay for climate action?

  13. Glenn 13

    My National mates have been harping on for months about CGT. This was going to bring National back into power next election.
    And now it won’t. A worthwhile sacrifice to keep those wankers out IMHO.

    • Peter 13.1

      Make a list of what you think they’re going to harp on about now. (After their guffawing about Labour not getting what it wanted.) They’ll be on song again today and going forward.

      Consider how many will vote for NZ First because they stopped CGT going through. In the masses those who were going to vote National still will. Those fervently anti-Winston won’t give him or MMP credit.

      • Muttonbird 13.1.1

        I think you are wrong there. Peters is desperate to claw back his rural and far right wing voters who spat the dummy and went to National after the formation of the current government.

        While those voters might come back after this ‘win’, they will be at the expense of National. NZF will also lose some of its more socially responsible left leaning voters.

    • Enough is Enough 13.2

      What is the point of keeping them out if they are winning the policy debate from opposition?

      If this government isn’t going to be a transformational government now, when they are at the peak of their popularity, when they have Jacinda in charge, when they have a weak opposition leader – just when the hell they are going to be transformational.

  14. Jess NZ 14

    The Tax Working Group has other valuable and possibly more effective recommendations apart from the CGT. Wealth tax and steep progressive income tax might not be so scary to NZF voters, who are more likely to have a small amount of investment property than great wealth or large incomes.

    • UncookedSelachimorpha 14.1

      I would be happy to have a wealth tax instead of cgt. So there are other options. The coalition needs to work to shift the discussion about tax away from the childish ‘tax is bad /theft’ nonsense.

  15. Kat 15

    The PM is a very very very clever politician. Why piss off the ordinary Kiwi, put up with years of attacks from the Nats and a possible electoral backlash from introducing a complex but watered down CGT when big multinational corporations are not being asked to pay their fair share. Thats where the real sustainable tax income lies. That is why the PM’s powder remains dry.

    • UncookedSelachimorpha 15.1

      ‘big multinational corporations’

      and very wealthy individuals also.

    • indiana 15.2

      You’ve just described John Key.

    • Shadrach 15.4

      If she was that clever she wouldn’t have either done a better job of winning the argument, or not put her personal support behind a CGT to start with (via her captains call).

      • ankerawshark 15.4.1

        Shadrach, say what you will but Ms Ardern is super smart on every level

        • Shadrach 15.4.1.1

          The word Kat used was ‘clever. I see smart and clever as meaning different things in this context. The PM is no doubt intellectually ‘smart’. Clever, in the sense of being worldly wise, she is not.

          • Kat 15.4.1.1.1

            “clever” is an adjective. Here are some examples of synonyms: intelligent, bright, smart, brilliant;……………….

            “smart” is an adjective. Here are some examples of synonyms: clever, bright, intelligent, sharp, sharp-witted, quick-witted, nimble-witted, shrewd, astute…………………….

            Jacinda Ardern is featuring in Time magazine’s list as one of the world’s 100 most influential people of 2019. Hardly someone who is not worldly wise.

  16. You_Fool 16

    Does leave it open for the Greens to campaign on it if they choose, and if they can get it right and they get significant support out of it, then Ardern can be a pragmatic idealist and switch decisions again, citing a public mandate / its the cost of MMP to sign the Greens up post 2020

    Gives the Greens something to campaign on to show difference to Labour, gives NZF something to campaign on as they applied the handbrake on crazy leftie ideas, and Labour still has Ardern… such a clever move, and NAct and Simion get to sit on the sidelines a bit longer…. such a shame…

    • Wayne 16.1

      A major party can’t do that on such a major policy. Not unless they have also campaigned on it. So when the PM says she will not have a CGT while she is PM, voters are entitled to take her at her word. As a leader of a 45% party she can’t say she was forced to change her mind by a 6% party on such a basic issue.

      In any event what other options do the Greens have. They can only ever go with Labour, so Labour gets to dictate the fundamental terms of any deal. The Greens can only realistically expect to get their environmental policies. They won’t get to determine fundamental economic settings. That remains with Labour as the major party.

      At least that is how I remember coalitions working. And I am sure that will be the case now.

      • You_Fool 16.1.1

        And if it is a 15 or 20% party because tax fairness is actually a good idea? National are the ones that have no where to go.. Or even a 10%+ party… that is starting to show that there is a political mandate… at least enough to take it into 2023…

        Also I tend to remember a 1% party dictating to a 45% party about education reform, and that was ok then… it was the “cost of doing business in MMP” and that was a policy neither party campaigned on at all… Oh there was also the no new taxes…. no asset sales…. seems quite a few things can be changed after an election….

        As to who the Greens could go with, it is hard to have options when only 1 major party even tries to think about the environment… maybe if the blue party could be serious about environmental issues then the Greens could work with them, whilst they continue to be only GreenWash there is nothing the Greens can do about it…

        • Wayne 16.1.1.1

          Six partnership schools is hardly a core issue or fundamental economic policy.

          But take up your first point. If the Greens get 15 to 20%, Labour won’t be getting 45% (or more). Much more likely in the low 30’s. Obviously that would change the dynamic between Labour and the Greens. But even then, the PM would still have her personal commitment to NZers on CGT. I reckon she would be bound by it.

          Asset sales was a specific National Party campaign policy in 2011. In fact it was the single biggest issue during the 2011 campaign. So naturally when National won, they implemented it. Anything else would have been a clear breach of promise.

          • You_Fool 16.1.1.1.1

            and in 2014? No more asset sales and then sold more assets? that was ok?

            The charter schools policy was still a fundamental change in our education and one that wasn’t campaigned on at all… but I guess if it isn’t making money you don’t care?

            A leader who never bends is not a good leader… if the voting public show what they think and it is for CGT, then there will be a CGT.. just because you don’t want it doesn’t make it a bad idea…

          • Dukeofurl 16.1.1.1.2

            That promise was to sell assets AND use it for hospitals and schools !

            “Prime Minister John Key promised in the 2011 election campaign the money from state assets sales would be for New Zealand hospitals, schools and roading – he has broken that promise and instead will spend a large amount in Asia, says New Zealand First.

            “The asset sales money went into the Future Investment Fund, launched in 2011, but the government is using it to pay a $140 million contribution to the recently announced Chinese-led Asian Infrastructure Investment Bank,” says Leader and Member of Parliament for Northland Rt Hon Winston Peters.”

            • Wayne 16.1.1.1.2.1

              New schools in Albany and Hobsonville (among others). New Hospital in Wellington.

              • Dukeofurl

                Those schools were mostly ‘build leaseback deals’ with private equity
                Wellington Hospital rebuild was approved by labour back in 2002

                “Construction was completed in 2008 and the new Wellington Regional Hospital officially opened on 6 March 2009. ”

                this is what it did go into
                ‘ $140 million contribution to the recently announced Chinese-led Asian Infrastructure Investment Bank”

          • Peter 16.1.1.1.3

            I suppose introducing ‘partnership schools’ as a way to establish a way of selling off schooling isn’t a core issue. I suppose that came under ‘practising for asset sales.’

            • Wayne 16.1.1.1.3.1

              Six partnership schools with less than 1,000 students is about one tenth of one percent of all secondary school students.Truly in the minor category.

              • Peter

                You’re talking about importance as denoted by number. Not seeing significance in the political history of our schooling and provision of education with the intent of charter schools is silly.

            • Shadrach 16.1.1.1.3.2

              Are you seriously suggesting that charter schools were a way of ‘selling off schooling’? Why would they bother? Private ownership of education providers has been a part of the education sector in nz since forever.

  17. swordfish 17

    Cullen

    “I thought it was always going to be very difficult to persuade Peters and New Zealand First to vote for any form of CGT, given their natural constituency is older, whiter than the population as a whole.”

    He said this demographic would have been more susceptible to a CGT than most of the population.

    The 2014 New Zealand Election Study found that Māori and Pasifikas were more likely to Party Vote NZF than Europeans … and that Lower Income voters were significantly more likely to head Winnie’s way than the well to do.

    (Don’t think that level of detail is available yet for 2017 … but I’d be highly surprised if their voter-base had dramatically changed over that 3 year period)

    • You_Fool 17.1

      Makes sense really…. it is the Trump voter base…. (or NZ equivalent) – People who want a straight talker, no nonsense decision maker who has NZ values at heart…

      YMMV on if Winnie actually fits that idea…

    • alwyn 17.2

      It is probably all in this book, published in September 2018.
      https://www.wheelers.co.nz/books/9781776561971-stardust-and-substance-the-new-zealand-general-election-of-2017/#detail
      I haven’t read it but I think it is the 2017 equivalent of the book you mention

      Alternatively the numbers may be in here.
      http://www.nzes.org/exec/show/2017_NZES+Results

      • swordfish 17.2.1

        Cheers, alwyn … but I’m guessing it’ll be out at a later date.

        Traditionally there are two ‘rival’ publications after each Election: a Vic Uni one from Levine / Roberts et al … and an Auck Uni one from Vowles / Aimer et al (the latter originally associated with Waikato Uni but then moved to Auck).

        The Vowles / Aimer one has always been based on analysis of the NZES data (usually a little more quantitative / with the Levine volumes tending toward the qualitative)

        Jack Vowles moved to Vic Uni relatively recently … but the two separate publications continue …

        In 2014:

        Levine: Moments of Truth (published by Victoria Uni Press Wellington)
        Vowles: A Bark But No Bite (published by the Australian National Uni Press Canberra)

        Stardust and Substance is the latest Levine publication.

        I’d expect the Vowles one to be out next year.

        (The NZES site is very useful … but it’s really only in the publicatons that you find the really detailed analysis & statistical breakdowns)

        • alwyn 17.2.1.1

          “it’s really only in the publicatons”.
          Thank goodness. It isn’t just me.
          I looked at the numbers in the NZES tables and shuddered.

    • Pat 17.3

      Ah but Cullen is a ‘real’ politician…..facts have nothing to do with narrative. He is also a convinced neolib.

    • Muttonbird 17.4

      There’s so much not addressed in your comment. That Maori and Pacific people are more likely to party vote NZF might be true but there are fewer of them.

      Then, I think we all know that Peters’ biggest constituency is a range of older and whiter people but they vote because he battles for them on super issues like the gold card and ragging on foreigners. They are right wing, anti-immigrant, and cantankerous. A lot are farmers who are suspicious of Labour and seethe at the Greens and those are the people he’s afraid of losing. He’s also desperate to win back the rural vote he lost at the formation of the coalition.

      I suspect some of these will drift back from National but he will also lose some of his left voters who rightly view his obstruction of the CGT as a betrayal of his statement that he wants a fairer face of Capitalism.

      Not sure what went on in the discussions between him and Labour but JA seems to have decided that if Peters’ was going to vote with National because of the inclusion of farms attracting passive gain, then she was going to chuck the whole lot out including rentals.

      It’s a pretty dark day for NZ as far as I’m concerned.

      • swordfish 17.4.1

        It’s certainly fair to say most NZF voters are European … but that wasn’t the point I was rebutting. Cullen had suggested “their natural constituency is older, whiter than the population as a whole … and … this demographic would have been more susceptible to a CGT than most of the population”

        According to NZES data:

        Older ? … certainly
        Whiter ? … Nope
        Affluent ? … Nope

        Affluence more important than Age.

        NZF voters are disproportionately former Labour voters – not Nats, Labour … on average older, morally conservative, low-to-middle income former Labour voters.

        Not so much Farmer-Purely Rural areas … as large Provincial Cities, smaller Provincial Centres, minor service Towns.

    • Dukeofurl 17.5

      Lower income voters ?

      A large portion of those voting NZF AND lower income would be living on super only pensioners

  18. Weasel 18

    My first question is why was Jacinda not strong enough to call Winston’s bluff and tell him accept CGT or Labour will call an election? I don’t accept that on the basis of one bad result from a snap election in 1984 when Muldoon had already far outlived his shelf-life, that the electorate will necessarily punish a government that can’t get through fundamentally important legislation because of a minority party.
    My second question is, what about Winston’s weasel words about “irresponsible capitalism” when NZF decided to go with Labour after the 2017 election?
    To remind all, he said far too many New Zealanders have come to view today’s capitalism not as their friend, but as their foe.
    “And they are not all wrong. That is why we believe that capitalism must regain its responsible – its human face. That perception has influenced our negotiations.”
    “The truth is that after 32 years of the neoliberal experiment the character and the quality of our country has changed dramatically, and much of it for the worse.”
    He also forecast imminent world economic doom and gloom which just like taking action against irresponsible capitalism did not eventuate.
    In the wake of this decision, how is Labour going to address the question of tax fairness and inequality? One simple solution might be to extend the Bright Line Test from 5 to 10 years — after all John Key and National have sworn black and blue it is not a capital gains tax.
    Another solution would be to raise the margin rate on high income earners. But income tax is apparently such a hot political potato that the Tax Working Group were forbidden from even looking into that. Can’t see Jacinda taking that one on.

    • alwyn 18.1

      ” John Key”.
      What does he have to do with the matter?
      You may not have noticed but he resigned as Prime Minister in 2016, about two and a half years ago, and left Parliament in 2017 which was two years ago.
      As they used to say to the adoring crowds at concerts who wouldn’t leave. “Elvis has left the building”.
      Well John Key has left the building and what he says has no more relevance than anything Helen Clark may come out with.

    • Dukeofurl 18.2

      ” why was Jacinda not strong enough to call Winston’s bluff and tell him accept CGT or Labour will call an election? ”

      labours private polling. It produces the same effect on all PMs in office.

      Anyway Peters would go into a snap election with NO CGT as his headline policy.

  19. RedLogix 19

    This enlarges on why I thought the TWG report was so disappointing and destined to fail:

    https://www.interest.co.nz/opinion/98539/andrew-coleman-how-tax-working-group-produced-report-anything-looks-future-tax

    For all of you who still want a tax on capital, there is one party that has this as it’s primary centre-piece policy:

    Capitalism can work, but only if it is a level playing field. Right now we have the opposite of a level playing field. We have a game that is rigged in the favour of a few. We have neoliberalism.

    The Government has failed to be a leader on tax and New Zealand’s housing crisis. By sheltering New Zealanders from a conversation about how we tax all assets, including the family home, they ultimately sowed the seeds of this proposal’s demise.

    https://www.top.org.nz/blog

    • Dukeofurl 19.1

      hahahaha.

      As a minor party they would trade it away in a heartbeat.

      • RedLogix 19.1.1

        All minor parties have to ‘trade away’ policy to some extent. But arguably tax reform is the reason why TOP was formed in the first place, and the only one committed to arguing for it.

        • Dukeofurl 19.1.1.1

          yeah right . They wouldnt get national to agree in a lifetime

          • RedLogix 19.1.1.1.1

            So your argument amounts to nothing more than ‘minor parties are a waste of time’. I’ll go now and see if I can process all that nuance.

            • Dukeofurl 19.1.1.1.1.1

              Your mistaken belief is that ‘Minor parties can change things ‘ Wont happen!

              Look what occured within ACT after 2008 election , they thought they would be in driving seat for Small Government on the back of the GFC. Key and English , correctly, borrowed up big and ACT tore itself apart over their impotence ( and Hides personal leadership failures).

              Look I get you are a 20 something who thinks changing the country is an easy matter.

              • RedLogix

                Next you’ll be arguing us back to the old National/Labour duopoly and FPP 🙂

                Besides you rather overlook how this Coalition govt’s dumping of a CGT, does seem to be a case of a ‘minor party’ having a very significant impact. Case of being in the right place at the right time.

                While it’s true that life for minor parties is an uncertain and often frustrating thing, there is no doubt that being in Parliament is still a better bet than not. After all there is only one way to ensure you never win Lotto, and that’s never to buy a ticket.

                • mikesh

                  It’s probably easier for a minor party to veto something and maintain the status quo than to initiate something new.

    • SPC 19.2

      You seriously expect the NZP to allow a punitive action on home ownership after blocking a CGT? Or the Labour Party that ring fenced any CGT from home ownership to ever agree to a coalition agreement with this in it?

      The apparent beneficiary of the decision will be the TOP – they now have a permanent role as a vehicle for the discontented younger voter alienated by the inequity of our tax system and its neo liberal guarantors in Labour and National. But as they will not reach 5% they will remain irrelevant to the political decision-making.

      • RedLogix 19.2.1

        But as they will not reach 5% they will remain irrelevant to the political decision-making.

        So despite all the outrage here at the lack of tax reform, you believe only a few ‘alienated younger voters’ are going back the one party committed to delivering it.

        Does the term ‘all hat, no cowboy’ mean anything to you ? 🙂

        • SPC 19.2.1.1

          1. You were the one arguing that there was an alternative in the TOP approach, as I said the Roger Douglas tactic of claiming there is an alternative to a CGT.

          2. The TOP option is deliberately anti homeownership – it is one of the most neo-liberal ideas ever (speculator landlords would have no problem with it). It is just a temporary vehicle for disenchanted youth and those reduced to tenancy for life (taking votes off the left). Those on the left calling it tax reform are either stupid or being disinegenuous like a landlord defending their privilege. It is not based on realising greater home ownership – Morgan, the great architect of it (Bob Jones NZP enabling Rogernomics), has always supported lower levels of home ownership.

          • RedLogix 19.2.1.1.1

            The TOP option is deliberately anti homeownership

            Why? Given that it treats home owners and landlords exactly the same you have some explaining to do.

            • SPC 19.2.1.1.1.1

              You do not see an extra cost on home ownership as leading to less home ownership? Seriously?

              Prevaricating like a landlord.

              The reason why DPF supports any CGT including family homes is to ensure CGT is defeat, the reason why alternatives such as TOP (or the Roger Douglas assets tax) are proposed are for the same reason – to prevent tax on CG.

              • RedLogix

                As a landlord voting for TOP would have ensured I paid more tax. Even with a CGT, as long as I didn’t sell, which is absolutely my intention, I never paid anything on my capital invested. (Of course I still payed tax on any ordinary business profit.)

                By contrast TOP’s Minimum Capital Return tax would have ensured I did pay a minimum tax on my capital. Unlike most people here, I was prepared to not only vote for something I believed in, but pay for it as well.

                to prevent tax on CG.<

                Paying this MCR tax over time amounts to a higher and more stable total govt revenue stream than a CGT.

                • SPC

                  The MCR would result in on-going payment but less than a CGT would. In that sense a bit like investment in farming for an untaxed CG when the property was sold. Good for the landlord.

                  And it would require extra cost to homeownership to top up the revenue it would thus reduce home ownership.

                  You voted your self interest, not the good of others.

                  The real problem with the CGT proposal was that it was not backdated to the cost of asset purchase (no valuation problems just cost plus annual CPI since), so it would raise significant CG tax from the first year after 1 April 2021.

                  • RedLogix

                    And it would require extra cost to homeownership to top up the revenue it would thus reduce home ownership.

                    In isolation that might be a consideration, but TOP explicitly organised their complete tax package to ensure that the bottom 80% of taxpayers would pay less total tax. The disincentive is not obvious at all.

                    It was only the top 20% who would pay more. No self-interest at all; quite the opposite.

                    • SPC

                      So you believe those figures. That’s nice.

                      How would those amongst the top 20% pay more, if their MRI cost was less than their future CGT impost?

                      The policy is designed so that those who own their homes paying more tax than those renting. It’s a strategy to adapt to more people never owning a home.

                      While that means more old people who own homes paying higher tax while living on super in their old age, but one day more and more people retiring without owning a home and being in poverty when they can no longer work (try paying rent on super).

                      The other real change TOP offers is to means test super – gut the payment and means test extra support. Which means those who own homes will be poorer if they cannot work or have not saved

                      As I said, TOP policy is of a design to reduce home ownership and have people save for retirement or be poor over 65. A policy from a guy who ran a super fund. It’s thoroughly right wing.

                    • RedLogix

                      How would those amongst the top 20% pay more, if their MRI cost was less than their future CGT impost?

                      Because it would be a highly predictable and modest tax paid annually.

                      By contrast a CGT may be a larger amount, but is paid only on the sale of the property, and depends very much on market conditions at the time.

                      The policy is designed so that those who own their homes paying more tax than those renting.

                      Can you explain how that works? Both types of property attract the exact same tax, just as they do mortgage interest, rates, insurance, maintenance etc. Yet you don’t complain that these costs are a ‘disincentive to home ownership’.

          • mikesh 19.2.1.1.2

            The TOP approach has better logic underlining it inasmuch as the benefit inherent in rent free accommodation can be deemed to be income. Capital gain is clearly not income. (Which doesn’t mean it shouldn’t be taxed, but it is better that we stick to taxing income).

    • greywarshark 19.3

      If TOP propose cgt on the family home because that is a nice clean system they are going the Douglas way, prepared to sacrifice what people have now for some great scheme that will make a clean break with the past offering vague promises about gains in the future and a better system.

      I am sick of conceptualists; my old economic textbook repeats a tale about 3 people on a desert island with food in tins needing opening. The physics guy says smash it against the rocks with a catapult, the chemist would light a fire swelling the contents to bursting, and the economist thinks they should assume they have a tin-opener. Which is how economists think, yet still impose their concepts to force reality to match. FT.

  20. Stuart Munro. 20

    Just another bad decision.

    With roughly 50% of agricultural sector income now from capital rather than production, one would expect a government as dedicated to theoretical economic outcomes as to make a complete bollocks of the country, creating record cost of living, with its attendant poverty, homelessness and so forth, would take a few basic steps to reverse the pernicious trend started by that epic crook Roger Douglas.

    But no, governments who made us poor will instead double down on greed and stupidity, and try to sell it as political acumen.

    Not much politics of kindness in this.

    • roy cartland 20.1

      +1
      They should rebrand it as a “greed brake” or similar. There’s a German term for this (Gierbremse) to stop salaries getting too high. Gets rid of the word ‘tax’ which people seem to hate, and puts the eye square on the greedy and undeserving.

    • Dukeofurl 20.2

      “With roughly 50% of agricultural sector income now from capital rather than production”

      That would be interesting , who is saying that?

      • Stuart Munro. 20.2.1

        I think the figure was 54, the Tax Working Group released the breakdown for several sectors.

        • Dukeofurl 20.2.1.1

          Wasnt ‘income’

          Was something they called accounting profit-

          In broad terms, the main industries where untaxed
          capital gains represent a high proportion of
          total accounting profit are: agriculture, forestry
          and fishing; property and leasing services; and
          financial services

          https://taxworkinggroup.govt.nz/sites/default/files/2019-03/twg-final-report-voli-feb19-v1.pdf

          page 34

          • Stuart Munro. 20.2.1.1.1

            Untaxed realized gains at 53% across agriculture, forestry and fisheries, ie even worse than the property sector with all its rorts.

            Realised = it’s income.

            • Dukeofurl 20.2.1.1.1.1

              Income is different . eg for Dairy farmers its all their money from Fonterra.

              best to not twist facts to suit your wording. However taxing the farming sector remains a problem

              • Stuart Munro.

                Do explain how a realized capital gain is not income – if you can.

                By any ordinary definition it is income.

                • mikesh

                  Income is what is used to purchase the goods and services produced by the community. But if a particular transaction increases the money available to purchase goods and services without any additional goods or services becoming available for purchase by the community as a result, then how can it be considered “income”? This is the situation with the sale of an asset such as property.

                  In fact there is no such increase because the seller’s extra cash is offset by the buyer’s cash deficit. But this is all the more reason for regarding the transaction as simply transferring pre existing (tax paid) income from the buyer to seller, rather than new income in the hands of the seller.

                  This is different from, say, the sale of a can of baked beans by a supermarket. The mark-up on the sale is simply the supermarket owner’s reward for the service of operating a supermarket.

                  • Stuart Munro.

                    “this is all the more reason for regarding the transaction as simply transferring pre existing (tax paid) income from the buyer to seller”

                    That might be the case were prices static, but the realized gain is for the most part the product of rampant inflation.

                    Prior to the admission of foreign entities to our property markets, when inflation was less, and might reflect improvements to land value, that position might’ve held a little water. Now, unfortunately, it represents nothing more than unproductive and incontinent greed.

                    • greywarshark

                      Is this where the money flow needs to be thought of in the M1 and 2, level of spending money available as income, or whether it goes into the M3 – 4 level available for investment. Someone knowing about economics might like to comment. If people don’t ever get beyond the basic and disposable income to having discretionary money then they are in a different monetary class.

                    • mikesh

                      My comment was more about income than money as such.

    • bwaghorn 20.3

      I guess the one thing most people dont realise is farmers , while living a comfortable lifestyle their wages taken from the buisnes a relatively low for people who run multi million dollar businesses with many variables in them . Which is why they hate the cgt .
      If we could shift the mindset from fsrming for lifestyle /retirement fund to one of farm in a true modern economic buisness sense a cgt might not be so painful.

      • Stuart Munro. 20.3.1

        Yes, that’s part of it. But I believe farms have been reprioritized for capital gain in many cases over the last decade or so, this is just one of the changes, together with the decline of new entrant systems like sharemilkers, and the related blowout in the use of cheap foreign labour.

        It’s not good for an economy to rely on capital gain, it imposes deadweight costs on every subsequent entrant to a sector. In theory the Right should be all over such problems, but unfortunately their economic acumen is really only a PR construct.

    • greywarshark 20.4

      Stuart M
      Too right. It shows a wild west rodeo approach to running the country. Climb into the saddle hold on tight and take some action that will get response and see how she goes. Concentrate on staying on and try to not break anything by going too close to the outer limits where higher skills of control are required.

      We have stopped rodeos, they produce cruelty to horses. No sign of kind, wise and far-seeing policies to prevent our distress of poverty, joblessness, houselessness, and so on that blights our simple lives. It’s just a lot of Ness;
      we have our own Monsters in Wellington.

  21. greywarshark 21

    Couldn’t CGT have been brought in just for housing and commercial buildings. That is where it was really needed, and not at a high rate but it could have started highish and gone down by 1% for each year the bullding remained off the market, or out of change of ownership to say 5%. The designated home would be out of it if under $1 million (CPI adjusted annually) – the rest would be CGT applicable the rate being as above.

    (Farms would also be looked at with an appropriate rate based on size and price and length of ownership. Also land banking and vacant land considered with special rates and rules. )

    Get it going quieten down the market a little, bloody do something about us having all our assets bought up by people or conglomerates that are things probably run by computers or people with tech implants (it won’t be long) who don’t put much money in, just borrow it.

    The whole country is being run as a leveraged business, and it is killing off our chances of getting a healthy enterprise economy, too little investment and too much squeezing the buyer – too few buyers among NZ citizens to pay for the investment, so a need for foreign investors to do so. Our islands are being used as an arena for a sort of sleight-of-hand business tour de force, a bit like bullfighting, with the business entrepreneur as matador facing off the wild bull of capital gain; occasionally getting gored but receiving great accolades when the latest triumph of successful completion of a project is achieved.

    While we, the audience, gaze in rapture at the startling, showy moves and come away with nothing but the tickets we paid for left littering the ground for the grunts to pick up.

    https://www.thebalancesmb.com/how-leverage-can-benefit-your-business-398312

    https://www.blueleaf.com/articles/how-leverage-works-in-investments/

    https://www.investopedia.com/terms/o/operatingleverage.asp

    https://www.learncfds.com/cfd-leverage-strategies/
    CFD Leverage & Forex Leverage – You Must Understand This or You Will Blow Your Account

    Explanation of CFD leverage:
    https://www.cmcmarkets.com/en/learn-cfd-trading/what-are-cfds
    A contract for difference (CFD) is a popular form of derivative trading. CFD trading enables you to speculate on the rising or falling prices of fast-moving global financial markets (or instruments) such as shares, indices, commodities, currencies and treasuries.

  22. higherstandard 22

    I support a CGT.

    There will be no CGT introduced in NZ until such time as the Nats and Labour sit round a table and come to an accord on CGT sadly not going to happen anytime soon.

    • greywarshark 22.1

      Haven’t got time to wait for a National angel at our table. Need action before we all get dealt with by angry Nature.

    • Siobhan 22.2

      Former Labour Party President Mike Williams did not think the wider Labour Party base would be too worried about the CGT rejection.

      “There would be elements of, particularly the unions and the extreme left of the Labour Party, which would be annoyed.

      That would indicate Labour Stalwarts consider CGT to be some marginal policy only appealing to the EXTREME LEFT ..which makes you wonder how hard Jacinda and co. really tried to win over Winston…let alone the public.

      And especially revealing given Mike Williams claims to have been an important advocate for getting Jacinda into the leadership position. I very much doubt he did that thinking she would bring in policies he regards as being only liked by the ‘extreme Left’. Not the man who considers Judith Collins to have been the best Corrections Minister ever, and a great candidate for leader of the National Party.

      Though I’m also interested that Williams regards the Tax Working Group to have been doing the nefarious bidding and advocating the policies of the extreme Left.

      Boy. What an inbred bunch our Centrists are.

      And our two main political Parties are, despite claims to the contrary, already sitting around the same table, figuratively if not literary.

      https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12223561

      • greywarshark 22.2.1

        I think that extreme left term is very important in confirming how far right NZ
        Labour has gone. Mike Williams claim to fame was being a good fund raiser for the Party but somewhere along the way the raison d’etre for the whole Labour caboodle, helping the workers to a future where they were included in the running of the state and worked in a safe environment and good standard of living, and had a vision of reasonable harmony in the country, dropped off the truck in the night.

  23. mac1 23

    It was commented in another post that “The blanket statement that New Zealanders don’t want a Capital Gains Tax is clearly disingenuous.”

    A poll taken in Feb/March this year by Horizon Research with 1116 polled at a 2.9% maximum margin of error showed the following. (www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12217405)

    In favour of CGT, 44%
    Against 35%
    Neutral 16%
    DNK 6%

    When linked to whether you were a landowner owning 1 ha or more, then 90% opposed.
    When linked to being a home owner with a mortgage, 74% opposed.
    When linked to a home owner without a mortgage, 65% opposed.
    Owners of company shares were 56% opposed.

    When linked to political party preference,
    National voters were 62% opposed and 23% in favour.
    Labour voters were 14% opposed and 60% in favour.
    NZF voters were 55% opposed and 30% in favour.
    Green voters were 14% opposed and 75% in favour.
    ACT voters were 86% opposed with none in favour.

    Looking at the figures of opposition/in favour by political party, then of 2,002,780 voters voting for the five main parties, 50.7% were in favour of a CGT and 49.2% opposed.

    In summary, then, there was not a majority in favour of a CGT in total. For those with a political party preference then a majority was just attained from the five main parties.

    With a 2.9% margin of error, then obviously the question of majority support amongst voters at 50.7% is marginal.

    • greywarshark 23.1

      Then I would have thought that going ahead with the CGT to come in soon but not applying immediately, so leaving time for businesspeople to dispense with some things and rearrange their portfolio, would have been perfectly satisfactory. A reasonable tax, just wanting some benefit to the nation’s taxation returns without grabbing too much would have been fine.

      NZ First has been said to be the home of the blue-rinse set and the older pakeha and tauiwi with pretensions to holidays on cruise ships, visits overseas and to Australia, holiday homes, new cars and lunch at cafes with their cohort who dress and speak appropriately and have the same values, and ideas on important things like furnishing and gardens will hold the country back from ever doing anything to face the real knocks of the future, coming to our doors now. The retirement villages show them as a handsome white haired couple gazing into each others eyes, or silver haired women, perfectly groomed, having tremendous fun in a frilly hat contest with their own creations. Not a cloud should cover their parade, or only rain when they want it to.

      So Winston and his winsome women and worthy wealth-wrights can’t see beyond themselves to the good of the country. Can we do without Winston? Where do TOPs stand when it comes to the crunch? We need to move on with a future-looking party – it seems that there is no win with Winston?

      • mac1 23.1.1

        Here’s a link to an article writen in 2017 as to who the NZF voters might be.

        https://www.stuff.co.nz/national/politics/97917491/these-are-the-voters-who-gave-winston-the-keys-to-power

        It does not fully concur with Cullen’s view, or the popular view that us seniors really go for him. He is popular at Grey Power meetings, as some of his supporters have made it into GP’s hierarchy as you’d expect of any party. Not true of our committee with Nats, Labour and Greens well represented but no-one openly NZF, not that it matters in terms of GP issues being non-partisan.

        The Andy Fyers article examines voting stats but does not go to polls for age, voting, issues information. His article is based on census and 2017 election results.

        He does write this, though. “There is little evidence that age is a factor in support for NZ First, despite the widely held belief that the bedrock of their support is with the elderly.

        Suburbs (Census area units) where support for NZ First was above 10 per cent tended to be about 1.5 years older than the rest of New Zealand on average.

        But overall the correlation between age and support for NZ First at the level of Census area units is weak.”

  24. SPC 24

    The victim here is the Labour Party left, their popular leader has cashed in her popularity to silence CGT advocacy within the party (as Key did in National with super reform).

    While there will be some leftist drift to the Greens – there will also be loss of youth support to TOP and more environment supporter loss to the blue green front.

    But the decisive impact in 2020 is in this question – will a Labour-Green government be more or less viable?

  25. bwaghorn 25

    I realise the horse has bolted but the glaring fuck up in selling the cgt was the fact that all those greedy old fuckers never got it drummed into to their siimple minds that any capital gains made prior to 2021 were completely ring fenced from the cgt.

    • indiana 25.1

      I hope you are aware that young entrepreneurs were also opposed to GCT.

    • Rapunzel 25.2

      I’m glad it’s gone just based on that simple fact that I got tired of trying to explain – to people who seem determined not to read past the headlines – that the tax applied to any increase in value that was gained after and based on a future valuation in April 2021. Of course prices may drop in the interim and then increase after that time period but should that not happen the tax was never guaranteed to work in the way it would have and should have had it been applied in the years prior to 2012 when the prices went haywire. That’s when the damage was done and the horse bolted ages ago.

    • RedLogix 25.3

      Also in a falling market the a CGT would be all political cost and fuck all revenue.

      • Rapunzel 25.3.1

        Plus I read that the new IRD system should better link to those who are selling property – it won’t get past a lawyer without the sellers’ IRD numbers and a clear history as to whether any GST was claimed. Hopefully now that will be better linked to all a person’s/ peoples’ activities.

      • SPC 25.3.2

        The market is not falling outside of Auckland. And significant CG is still available from land rezoned for housing and carving up of lifestyle blocks.

        • Rapunzel 25.3.2.1

          To some developers for the land yes but demand in those areas has to be matched with work. jobs and income. The horse bolted here in Tauranga with pockets of land, quite a bit of that went to people associated with those who had access to the purchase of several sections and they, some at a relatively young age have cheap homes due to that but should they sell them soon many are open to the current “bright line” terms of legislation. One associated builder from Auckland purchased a section and built a home on and off over several months, I am aware that he is now sweating the fact that this was done outside his and his wife’s Auckland business activity may not go unnoticed by IRD, Likewise the local “developer/builder” who processed the materials through his activity as a favour may have opened the door for himself to be answerable as to what happened to those materials, likewise the GST calculations.
          The fact that thanks to the National Party some decided this and skewing of NZ house prices due to the huge demand that rapidly developed can now not be helped or the genie put back in the bottle but the options to exploit quite so easily look to have reduced.

    • Adrian 25.4

      I think that message was perfectly loud and clear. That in itself is a factor why a CGT was never going to seriously lower house prices.

  26. Siobhan 26

    I’ve never really got the ‘Deep Stuff’ hashtag on The Standard, and I sure as eggs don’t get the reference in this instance.

    ‘Shallow Pandering’, ‘Self Serving Centrism’, “Not-on-My-Watch-Ardern’ … seems far more appropriate.

  27. RRM 27

    I had an actual LOL at James Shaw’s BSing speech about

    “this is STILL a transformational government…. our work on eliminating child poverty…. our work on the environment and cleaning up rivers…”

    I just thought…. “you utter UTTER LYING GREENIE BASTARD!

    WHAT “transformation?

    The greens totally capitulated on the kermadec sanctuary and cameras on fishing boats.

    Shaw just this week said we won’t see any significant emissions reductions for at least 6 years (after National presided over an actual reduction, and Greenies campaigned on “we must change the government to fix the environment from National’s neglect.”

    Child poverty fell under National according to all indicators, but now it is up again under Labour, even though Jacinda made child poverty her headline issue, we need to change the government to fix child poverty because National don’t care, but labour cares… (where is the media on child poverty these days, btw?)

    Kiwibuild was supposed to have built about fifteen thousand affordable houses by now to fix the housing crisis that National apparently doesn’t care about.

    Why do lefty politicians LIE so much?
    Greebour first hasn’t “transformed” jack shit James!

    And WHY does our news media give them a total free pass on it, time after time after time?

    Ardern was spot on in her response to Chch and would make a good minister of feelz. Useless as PM.

    Jimmy two mums is a dirty, dirty liar.

    Winston is a master puppeteer.

    Roll on 2020!

    • Jimmy two mums…

      It’s always sad to see someone so threatened by the unfamiliar. Have you considered therapy?

      • RRM 27.1.1

        LOL, that’s your comeback?

        • Dukeofurl 27.1.1.1

          Greens are outside government , just confidence and supply. very limited in what they can do in government outside their particular portfolios they have .

        • Psycho Milt 27.1.1.2

          I responded to the most significant thing in your comment, yes.

          • rrm 27.1.1.2.1

            So you’re ok with the increased emissions under Greebour, increased child poverty under Greebour, total kiwibuild failure under Greebour, CGT backpedal under greebour…?

            • Psycho Milt 27.1.1.2.1.1

              Those are just bullshit claims of the kind that get recycled among wingnuts. The real meat in your comment was your fear and loathing of people you see as different from yourself.

    • Stuart Munro. 27.2

      “Child poverty fell under National according to all indicators,”

      I’m interested to know what indicators, since the Gnats asserted that poverty could not be measured. Also, the International Covenant on Economic, Social and Cultural Rights (ICESCR) were “incredulous at some of New Zealand’s worst statistics,” https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12038422
      which tends to suggest that child poverty wasn’t trending in any remotely desirable direction.

      • RRM 27.2.1

        The same 9 measures that have been taken for a long time. The ones Jacinda hung her hat on.

        https://www.stats.govt.nz/news/child-poverty-statistics-released

        1. Percentage of children in households with income under 50% of median, before housing costs. 156,000 in June 2008 and 156,000 in June 2017 so no increase under National (rate dropped 0.3%). In June 2018 increased by 27,000 and rate increased 2.3% for Labour’s first year.

        2. Percentage of children in households with income under 50% of median, after housing costs. 329,000 in June 2009 (no data for 2008) and 247,000 in June 2017 so a drop of 82,000 under National (rate dropped 8.1%). In June 2018 increased by 7,000 and rate increased 0.4% for Labour’s first year.

        3. Percentage of children in households in material hardship. 196,000 in June 2013 (no data before that) and 140,000 in June 2017 so dropped 56,000 under National (rate dropped 5.4%). In June 2018 increased by 8,000 and rate increased 0.6% for Labour’s first year.

        4. Percentage of children in households with income under 60% of median, before housing costs. 252,000 in June 2008 and 243,000 in June 2017 so a drop of 9,000 under National (rate dropped 1.3%). In June 2018 increased by 38,000 and rate increased 3.2% for Labour’s first year.

        5. Percentage of children in households with income under 60% of median, after housing costs. 355,000 in June 2008 and 314,000 in June 2017 so a drop of 41,000 under National (rate dropped 4.6%). In June 2018 increased by 27,000 and rate increased 2.2% for Labour’s first year.

        6. Percentage of children in households with income under 50% housing costs for the base financial year. 258,000 in June 2008 and 236,000 in June 2017 so a drop of 22,000 under National (rate dropped 2.5%). In June 2018 increased by 18,000 and rate increased 1.4% for Labour’s first year.

        7. Percentage of children in households with income under 40% housing costs for the base financial year. 156,000 in June 2008 and 178,000 in June 2017 so a increase of 22,000 under National (rate increased 1.6%). In June 2018 dropped by 4,000 and rate dropped 0.4% for Labour’s first year.

        8. Percentage of children in households in severe material hardship. 84,000 in June 2013 (no data before that) and 74,000 in June 2017 so dropped 10,000 under National (rate dropped 1.0%). In June 2018 dropped by 9,000 and rate dropped 0.9% for Labour’s first year.

        9. Percentage of children in households in material hardship and under 60% median income after housing costs. 96,000 in June 2013 (no data before that) and 86,000 in June 2017 so dropped 10,000 under National (rate dropped 1.1%). In June 2018 increased by 12,000 and rate increased 1.0% for Labour’s first year.

        So let’s be very clear about this.

        Child poverty under National dropped on seven of the nine measures, (including material hardship) stayed static for one, and increased for one.

        Child poverty in Labour’s first year increased on seven of the nine measures (including material hardship) and dropped on only two of them.

        Jacinda says she cares about child poverty, but that’s it. She cares. Total failure to deal with it.

        • Stuart Munro. 27.2.1.2

          Your numbers are all rather technocratic, and seem to avoid heath and material poverty measures. You can a better handle on the area by getting into the kinds of detail you find here: https://ourarchive.otago.ac.nz/bitstream/handle/10523/8697/CPM_2018_FINAL.pdf?sequence=6&isAllowed=y

          Though it may not exculpate your political party of choice.

          • RRM 27.2.1.2.1

            Material hardship is right there in black and white.

            I point this out because the left has been at great pains to emphasize material hardship is the one that matters in the past.

            Though I expect that to change now that Saint Jacinda has completely failed to reduce rates of child material hardship.

            • Stuart Munro. 27.2.1.2.1.1

              It may be in black and white but its constituent elements have been elided.

              It’s a little early to conclude Jacinda has completely failed – her portfolio is still suffering the flow on effects of nine years of cheeseparing and gross irresponsibility. Her solutions will also take time to flow through into the figures.

              It is most unfortunate however, that she has not only declined to implement a CGT, but has ruled it out for the rest of her term. The drivers of gross inequality, if they remain unaddressed, will ultimately render any child poverty strategy ineffectual.

              • RRM

                her portfolio is still suffering the flow on effects of nine years of cheeseparing and gross irresponsibility.

                ???

                Material hardship

                WAS. GOING. DOWN. under national!

                We’re not waiting for Jacinda to turn around National’s legacy. She’s already done that. That’s the problem.

                • Stuart Munro.

                  Material hardship, as defined in an unspecified fashion, was declining.

                  Less opaque measures however, revealed a very different picture.

                  It’s hard to produce credible results when your only object is to juke the stats to make the previous government look good. There are stats that make the Christchurch rebuild look good too. They too have no basis in reality.

          • Mr marshy 27.2.1.2.2

            Truth hurts does it?

    • Incognito 27.3

      Kiwibuild was supposed to have built about fifteen thousand affordable houses by now to fix the housing crisis that National apparently doesn’t care about.

      Incorrect. The first deadline is 1 July with a target of 1,000 houses built. They will fall well short of this with an estimated 300 houses delivered by the deadline.

  28. mosa 28

    The people that a CGT would have effected are not going to vote Labour in 2020 just because they have said no to it.

    You only have to look at the campaign waged against it for the last ten years to see that this was all about wealth , greed and privilege.

    The idea was dead in the water from the start because NZF did not support it.
    I would have loved to have been present during the debate’s about that on the ninth floor.

    It will be interesting too see if any of the TWG recommendations are carried out and i bet if you asked the average kiwi what they are they would not have a clue because the media has only focused on one , the CGT.

    The only party that can raise tax rates without condemnation and a negative media campaign is the National party.
    Key and English did just that with GST after promising not too increase the rate.

  29. SPC 29

    So I guess we will now see more sell out from Auckland (both homes and rentals) to the provinces in search of some more CG.

    This won’t necessarily result in much of a fall in that market as there will be continuing demand from migration inflows and unresolved homelessness, but it will push up overall property values.

    And speculators will still take untaxed CG as land is re-zoned for housing or they carve up their lifestyle blocks etc in greater Auckland and elsewhere.

    • And NZ farming will still be more about capital gain than growing food, with all the environmental degradation that implies.

      And amateur landlords will still be using rental properties as a retirement fund, with all the bad news for tenants that implies.

      No doubt there’s more.

      • RRM 29.1.1

        National made farmers fence waterways to keep stock out. That has largely been done.

        It’s far from environmental nirvana but it’s something. (As you would doubtless tell me 74 kiwibuild houses is something.)

        What have Greebour done? Actually done.

        • michelle 29.1.1.1

          wippy do RRM fencing waterways is that the best you can do

          • Dukeofurl 29.1.1.1.1

            Its limited fencing of waterways as they define ‘waterways’ very narrowly.

            What they dont want to fence is all ‘watercourses’

          • RRM 29.1.1.1.2

            Michelle how are Labour’s one hundred million trees planted coming along?

            Oh that’s right, they’re not.

            So what has Labour actually done?

            #Failboour
            #letsFAILthis

            • ankerawshark 29.1.1.1.2.1

              RRM . Troll. Not worth responding to.

              • RRM

                But really though!

                Labour were going to plant a hundred million trees over ten years. For climate change.

                I’m not making this up, labour promised to do it!

                So how are they going?

                One and a half years in, there should be about fifteen million trees planted by now… right?

                RIGHT?

                Oh wait, that was just a labour party promise..

                • alwyn

                  “Labour were going to plant a hundred million trees over ten years”.
                  What do you mean?
                  It wasn’t just Labour. It was the Government, sunshine, and that includes the Winston First Party.
                  And it wasn’t a mere hundred million over 10 years.
                  It was a billion over that time period.
                  And it is all going incredibly smoothly.
                  Shane Jones and Jacinda Ardern told me so it must be true.
                  They wouldn’t tell porkies would they?

                  • RRM

                    My bad alwyn you are totally correct. One BILLION trees by 2028. That is what the government promised:

                    https://www.mpi.govt.nz/funding-and-programmes/forestry/planting-one-billion-trees/

                    Can we take the government’s promises seriously?

                    They should have about 150 million planted by now…

                    • alwyn

                      Did you notice that when they came up with the scheme prior to the election it was going to be a billion trees planted by the Government. That is it was going to be additional to the ones that were privately planted.
                      After the election they changed their story to say that the billion included all the ones (about half a billion) that were being privately planted.
                      Well private planting is running along at the expected levels. The Government contribution is under 5% of the number they so happily talked about. That may even include the million plus where they bought the trees and then shredded them because they hadn’t actually cleared the gorse off the land they were planning to plant on.
                      Little details like that aren’t obvious to people like Shane.

                    • Incognito

                      Not sure where your 150 million comes from but so far they have planted an estimated 60.871 million trees.

                    • Not sure where your 150 million comes from…

                      You’re probably unfamiliar with the level of duplicitousness, stupidity, or both, that reigns over at Kiwiblog. There, planting a billion trees in 10 years is a purely linear process, in which the new government must plant 8.3 million in its first month, then repeat etc etc until by now it’s supposed to have planted 150 million trees. They apply the same duplicity/stupidity to housing numbers or anything else you can put a number on. It makes for a depressing outlook for humanity, but I guess there’s always a bottom half to any bell curve.

                • bwaghorn

                  A planting contractor i meet recently is gearing up to put 40 more planters on this winter due to the billion trees work .. 40 men doing 600 to a 1000 tres a day adds up quick (yes a man can plant 1000 a day i used to )

        • Stuart Munro. 29.1.1.2

          The Gnat definition of waterway evidently does not include the Selwyn River.

          • Mr marshy 29.1.1.2.1

            Is the constant use of Gnat you idea of humour? Not very impressive is it. Bit like the idea of a CGT, now that was funny

  30. MickeyBoyle 30

    Labour lost the CGT debate when they allowed National to dictate the narrative. We heard stuff all from Labour immediately after the working group had finished, yes they needed time to digest what the suggestions were, but they allowed National to frame the debate and drum up opposition to it. Labour needed to come out, and sell this as a tax switch, their silence was their downfall. And why didn’t they ask Winston what he would be prepared to vote for, before this whole drama began?. It makes Ardern look incompetent.

    • Sacha 30.1

      Their silence was planned.

      • Michael 30.1.1

        Agree. Labour didn't even try to sell CGT. As a result, Labour can now wring its hands and cry crocodile tears over issues like child poverty, mental health, etc.

  31. michelle 31

    I see many of our farmers , small businesses and other bigger businesses seem very happy about no CGT but at the same time they are crying out for more workers from overseas. Apparently we need fifty thousand construction workers. Can someone tell me where they expect these people to live. And is it fair and right to bring in this many immigrants when we have huge infrastructure issue especially not enough suitable housing for NZers . No good crying like spoilt babies for workers when we have problems here sort the problems first instead of opening the flood gates and stop being fucken selfish. Your wrecking our country and putting your hands out for money to fix you m bovus shit at the same time its sickening to see and hear all the bullshert coming out of the same selfish mouths who a quick to put their hand out when they need help and then put the boot into others puts me of eating meat, cheese and milk

  32. Muttonbird 32

    I’m a little perplexed that Ardern said they didn’t have a mandate after they did absolutely nothing to build one.

  33. Puckish Rogue 33

    Well this shows that the leader of the coalition is not Jacinda Ardern, Jacinda can say and do whatever she likes as long as Winston allows her but as soon as its something Winston disagrees with Jacinda folds

    On the other hand this is a good decision for NZ so there is that I suppose

  34. Dean Reynolds 34

    The tragedy is that the Left, long ago, gave up defending the concept of tax as the hall mark of a civilised society. We’ve allowed whining, entitled Right wingers to demand everything they can from the public sector, (first class schools, roads, health systems, etc) & then said nothing as they simultaneously scream their tits off that ‘tax is theft’

    If the Left doesn’t take control of the tax debate, we’ll be permanently on the defensive as the parasitical Right wing continue to chisel away at the tax base, in order to reduce the size of the Government

  35. Dennis Frank 35

    I’ve been feeling rather bemused. I agree Labour has been schizoid on the thing so long that their lack of marketing it is understandable – particular when their minister of finance is so intent on being seen as a staunch neoliberal.

    Winston seems reluctant to front the media & explain himself. Nobody expects a lawyer to see taxation as a matter of principle, of course. Understandable that he would think so many voters are invested in playing the market that it would be political suicide to hack into their potential profits.

    To me, as a centrist, the principle that capital gains ought to be taxed seems inherently valid, yet I find myself somehow on the left side of the issue. I suppose the rationale that applies is that fairness in principle is trumped by fairness in practice – if you change the rules mid-game, all players will turn against you.

    • greywarshark 35.1

      Calls to mind, again, the quote from Yes Minister.
      If you can’t change the rules mid-game’ when it is a continuous process then you are stymied:
      “Anything can be done – but nothing can be done for the first time.”

  36. greywarshark 36

    https://www.stuff.co.nz/business/112077063/billboard-promoting-tax-fairness-removed-without-permission
    How did this billboard so large, disappear? This is a theft and a denial of free
    speech about a political matter. This is a serious matter for citizens’ rights.

    And it brings some interesting matters to the fore.
    Taxpayers’ Union Executive Director Jordan Williams says, “Because the pro-CGT campaign is funded by taxpayers via the Public Health Association, the Taxpayers’ Union considers this to be potential theft or destruction of taxpayer property, and is thus launching an investigation on behalf of taxpayers.”
    http://www.scoop.co.nz/stories/AK1904/S00412/who-took-down-the-tax-justice-billboard.htm

    • Sacha 36.1

      “the pro-CGT campaign is funded by taxpayers via the Public Health Association”

      Lying little feckers at the Taxdodgers Onion, true to form. #porkies

  37. Sacha 37

    Labour never had any intention of making a CGT happen, argues Bryce Edwards:
    https://www.radionz.co.nz/news/national/387327/bryce-edwards-signs-labour-didn-t-intend-to-implement-capital-gains-tax

    During the election campaign Labour always side-stepped the issue of getting NZ First on board with a CGT, as if they didn’t need to worry about persuading their potential coalition partner. In hindsight, it’s a sign that they weren’t serious about implementation.

    Early on in government, Ardern acted as if getting NZ First’s support for such a tax was a formality, even though it was clear they would need convincing. Just as Labour refused to go out publicly to campaign to win the public over to the CGT proposals, it seems that no real effort was made to win their coalition partners over either.

  38. Jum 38

    Gains from CGT are too far down the track. Transaction tax could go on paper transfer transactions by wealth, now.

  39. Dennis Frank 39

    Jesse Mulligan identifies the most important thing that MMP didn’t change: “the way political decision making works: it’s not the best argument that wins, it’s whatever the guys with the power want.” https://thespinoff.co.nz/politics/18-04-2019/on-capital-gains-the-powerful-people-took-on-the-better-argument-and-won/

    “I researched deep for a CGT essay I was writing for an offshore publication and decided that a lot of the objections to Cullen’s report were legitimate. One of the most compelling was Matthew Hooton’s typically insightful observation that for all that this was pitched as a generational battle, the baby boomers’ house price gains were already locked in – the new tax would apply only to gains made after 2021, disproportionately affecting (you guessed it) millennials and first home buyers. But you have to start somewhere, and any new tax will create these sorts of paradoxes.”

    “I’m reminded of my first-year philosophy class, when the lecturer explained to us the difference between teleological arguments (“this idea will work”) and deontological arguments (“this idea is morally right, even if it doesn’t work”). For me, the most compelling arguments for the Cullen proposal were in the latter category – pro-CGT people might have been better to answer objections around unintended consequences with the simple reply: “but it’s more fair”.”

    “In the end though these pro-CGT people were hard to find – just 400 signed a petition in favour. Ten showed up in person to a demonstration at parliament. Millions of low income New Zealanders might have benefitted from a capital gains tax, but they had other things to do.” Fair call? More likely they mentally filed it as something way too hard to understand…

    • Muttonbird 39.1

      While the current gang of retirees who have benefitted from untaxed capital income might have these gains locked in they can’t take it with them and must pass it down to their privileged children. They immediately would not have to pay gains tax but any gains in housing investment (for instance) would be taxed. This then evens out the playing field and helps to avoid intergenerational inequality increase.

      Typically, Hooton only thinks in the short term and what’s in it for him. A very widespread disease in New Zealand.

      Meanwhile Jesse highlights just why the events of yesterday are so tragic. The under-employed, the sick, the disabled, the insecure, the very people who would have hope from tax reform are the ones with no voice.

      JA may have tried to speak for them but the greedy clamped their hand over her mouth.

      • James 39.1.1

        “JA may have tried to speak for them but the greedy clamped their hand over her mouth.”

        That would be her writing cheque’s she couldn’t cash.

  40. Dennis Frank 40

    Danyl Mclauchlan did his best to praise Labour’s political expertise yesterday, but his heart just didn’t seem to be in it: https://thespinoff.co.nz/politics/17-04-2019/four-months-in-labours-year-of-delivery-is-a-disaster/

    “we can blame Labour’s communications strategy. They didn’t want a public policy dispute between Ardern, Robertson and Peters, because that would have been ‘a bad look’ so after the Tax Working Group’s report was made public the government entered a two month consultation period. They spent this time refusing to comment on the report’s findings while a vast, sophisticated, devastatingly effective public relations campaign tore the Working Group’s proposals to shreds.”

    “The proposal had a lone champion: former Labour finance minister and Working Group chairman Sir Michael Cullen. Having him front the debate probably sounded like a good idea when it was dreamed up in the Beehive by a room full of people dazzled by Cullen’s brilliance, but it was never obvious that the wider public (a) remembered who Cullen was or (b) if they did, whether they liked or trusted him, Cullen having been a rather caustic and smug political figure, or (c) if they did remember and trust him, whether they were aware of Cullen’s very vocal contempt for a capital gains tax the entire time he held the finance portfolio, and also (d) all that aside, how much credibility he had once it was revealed the government was paying him $1000 a day to do their job for them. The only person who could have won the debate was Jacinda, and Jacinda was regally silent.”

    He could have framed her leadership as zen. That silent space she wasn’t filling was very influential: it made everyone examine the proposal on it’s apparent merit? Um, don’t think so. It made everyone think it was a fait accompli? Yeah, worked well.

    • James 40.1

      There was no political mastery in this at all. JA didn’t even know what the outcome was going to be until just a few hours before the announcement according to Winston.

  41. Mr marshy 41

    Lol, you socialists really have no credibility do you. You bang on about stupid policies like this, and when your vacuous leader dumps it because her poodle boss tells her to you try and defend the decision. Really quite pathetic. And will the equally man of zero integrity Shaw resign after his comments in the past couple of months … nope

    • Dukeofurl 41.1

      Coalition parties are supposed to have separate policies to Labour duh.

      You forget Key and English let their 2010 tax Working Group recommendations slide into oblivion. ( except the one for raising GST to 15% which they sat on until springing a surprise AFTER the 2011 election- and denying it during the campaign)

    • greywarshark 41.2

      We talk and think about politics and policies and what might be good or not, now or in the future Mr Bog. You wouldn’t know how to do that. You just follow along with your peers. Really quite pathetic. I think this blog is above your level of competence.

      • Mr Marshy 41.2.1

        Lol, what a moronic reply, as normal with yours tbh. So your 'argument' is to invent some pathetic play on my handle, then tell me this sad little socialist site is supposedly intelligence based.

        • greywarshark 41.2.1.1

          Marshy  I'm so sad that you don't appreciate our blog referred to as 'supposedly intelligence based'.    You still want to come here though. Apparently you think you have intelligence to flaunt to help us out.   Keep trying.    There is an addictive quality to coming here like pigeons pecking for food.    Bet you won't be able to resist it bird-brain.    You appear to be already hooked as you have started rating mine, bit silly tbh.   But don't hope that I will respond to you – I think, therefore I am.  You are – and haven't caught onto the rest yet.

  42. peterlepaysan 42

    Ardern ruling out cgt under her reign is a very big call.

    Winston has to pay that back big time to both the greens and labour.

    We live in “interesting times”.

  43. greywarshark 43

    I don’t know if anyone has brought up another tax decision that didn’t work out for Labour – that of Arnold Nordmeyer trying to curb excess, encourage health, and raise tax in one go. The public were not receptive.

    https://www.odt.co.nz/opinion/toying-tax-spells-doom-labour-govts
    This from Otago Daily Times seems thoughtful and probably accurate, I haven’t double-checked.
    26February 2019
    By 1957, the Labour Party had been out of power since 1948. In that year the party, with Sir Walter Nash as the prime minister to be, won the election. …

    Economic conditions in 1957, when the new government came to power, were similar to the economic conditions of New Zealand today. Life was not easy for a large number of Kiwis in 1957.

    Within eight months, the new Labour government had set itself up forThe reason? The minister of finance, who was born with the unfortunate name of Heinrich Arnold Nordmeyer, until he changed it to Arnold Henry Nordmeyer, introduced into Parliament on June 26, 1958, what is still known as the “Black Budget”…

    The new government played around with New Zealanders’ taxes and paid the penalty. It raised taxes on cars, alcohol and tobacco. That was enough…

    The Labour government introduced the Property Speculation Tax 1973 which saw any capital gain made on New Zealand property sold within two years of purchase, taxed at 90% for an early sale, reducing to 60%, depending on the length of time the property was owned. At the time, it was referred to as the envy tax and as such achieved nothing to help deserving and hardworking Kiwis into owning their own homes. In fact, the Speculation Tax had the opposite effect…

    The result? Labour was again voted out by the New Zealand electorate in 1975 and did not regain power until 1984.
    It seems history is set to repeat itself. The message is simple. Kiwis do not like new taxes.

    (Gerald Cunningham is a pensioner, part-time author and photographer who lives in Lauder, Central Otago.)

    The functionaries in present Labour may have read this and so brought it to the surface of their consciousness. There seems a cycle here.

    Not mentioned is how the self-righteous Labour leaderse, as soon as thought was required to avoid inflation being fed by swingeing demands for wages and conditions,
    collapsed and enforced an economic regime that pleased National whose types had infiltrated the Labour cohort of that time, and since. It is really important to talk to the working people about what can be achieved for the strugglers and how, and making them true followers of a Labour working for the best possibilities pragmatically. Pull on the experience and practicality of the strugglers and give them the things that they need that they understand are possible. There are more of them than the 1%-20% at the top. Housing provision will be an intelligent and good economic response that will make up for loss of hoped for CGT taxes.

    So the ‘brightline’ test which gets bandied about could be used more effectively,
    Let suitable unemployed train as unskilled workers gaining house building skill on their own units or with the promise of the next one being in their own area. More housing done directly and painted to chosen colours or sheathed in Coloursteel in an attractive modern architecture of three storey building etc.

    • greywarshark 43.1

      My program highlights stuff and wipes it with the next entry without me noticing – must correct that – So here is the full para about Arnold Nordmeyer’s unwelcome tax.

      Within eight months, the new Labour government had set itself up for twelve more years in the political wilderness. The reason? The minister of finance, who was born with the unfortunate name of Heinrich Arnold Nordmeyer, until he changed it to Arnold Henry Nordmeyer, introduced into Parliament on June 26, 1958, what is still known as the “Black Budget”.

  44. Michael 45

    I'm sure Labour had lots and lots of absolutely brilliant reasons for shit-canning CGT and the fact that so many Labour MPs rake in capital gains, year after year, had nothing to do with their impeccably principled decision. Even though some of us might fight feel just the teensiest bit let down by our parliamentary betters, there's no alternative for us but to keep on voting for them and watching out for their long term policies.

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