Labour have announced they could not get a consensus within the coalition Government on the Capital Gains Tax proposed in the Tax Working Group’s final report.
Labour has decided not to pursue the matter during this term nor will it be an election 2020 campaign policy.
Making the announcement, Jacinda Ardern said she was dropping the tax “not because I don’t believe in it, but because I don’t believe New Zealanders do.”
National would have loved for the next election to be a debate around tax, particularly the CGT, but that doesn’t guarantee success. The previous Tory leader, Bill English, held out a large tax cut as a sweetener at the last election and it seemed to make little difference to the voting outcomes.
By ending the debate on CGT, Labour have dramatically narrowed National’s field of attack. And whether the Tories like it or not, the concept of tax fairness is embraced by many Kiwis.
While the Greens and Labour will be disappointed that they cannot proceed with what is, after all, a fair tax, NZ First can genuinely say that it was listened to and it’s views were respected.
Again, this is clever, pragmatic politics from Labour in an MMP environment.
This decision almost certainly shores up coalition arrangements after the next election and deals a fatal blow to National’s slim hopes of returning to power.
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