CGT or asset sales? Which do you prefer?

Written By: Eddie - Date published: 7:24 am, July 14th, 2011 - 107 comments
Categories: capital gains, election 2011, privatisation - Tags:

Generally, no-one likes taxes, so Labour’s polling shows that Kiwis are surprisingly receptive to capital gains tax with 31% supporting CGT on its own merits to 43% opposed.

But head to head with National asset sales plan, the choice was clear: 55% prefer CGT vs 32% for privatisation. In a contest of economic plans, Labour wins hands down.

Even John Whitehead agrees. The just retired head of Treasury is the biggest name so far to come out in favour of Labour’s CGT, which he says has been carefully thought through and has major equity arguments in favour of it. He points out that Turkey is the only other OECD country that doesn’t tax capital gains.

National continues to flounder. English could manage yesterday was to scaremonger about the 35% debt ceiling, even though he can’t guarantee that his own policies won’t breach it because he has booked the revenue from asset sales but not the cost of lost dividends:

Hon David Cunliffe: Given that the Minister’s 2011 Budget has already booked the proceeds of those asset sales, for which he has just confirmed that he lacks a mandate, did his Government’s Budget 2011 Fiscal Strategy Report set the upper net debt ceiling at 35 percent, and what guarantee can he offer that his policies will not break this limit when his Budget does not properly account for the costs of his Government’s plan to sell public assets?

Hon BILL ENGLISH: The 35 percent ceiling is well above where we expect net debt to peak, which will be just under 30 percent. I think this will be more of an issue for the member. If he says he will use a capital gains tax to offset sales of assets, he cannot count the dividends, because they are still in the Budget now. He cannot add dividends from retaining State assets. They are still in the Budget.

Old Double Dipton up to his old tricks. Giving himself a lower debt projection by counting the proceeds from asset sales but not the ongoing cost of lost dividends.

Kiwis aren’t buying it though.

The polls show that disillusionment with National has been increasing for some time but Labour has been unable to capitalise and take voters away from them because it has not been seen as a credible alternative. CGT changes that. Today, we are going to see the guts of Labour’s economic policy. Every economic heavy-hitter is backing it, which will give great confidence to the public that it’s viable.

Now, it just comes down to a simple choice about this country’s future:

Do you want our strategic assets sold off to foreigners while some of the wealthy continue to avoid paying their fair share?

Or do you want us to own our future with a fair tax system that takes the burden off work and on to capital gains?

(Awesome image of the Cake Tin from Red Alert, photoshopped of course – as if a political party can afford that kind of advertising spend 🙂 – didn’t stop capital gains tax supporter Cameron Slater getting upset though).

107 comments on “CGT or asset sales? Which do you prefer? ”

Comments are now closed

mickysavage 1

14 July 2011 at 8:01 am

Old Double Dipton up to his old tricks. Giving himself a lower debt projection by counting the proceeds from asset sales but not the ongoing cost of lost dividends.

Can someone, anyone, defend Blinglish’s actions here?

To me it is one of two things, either a sign of his utter incompetence in that he banked the sale proceeds but did not deduct the income flow from dividends OR it is extreme cynical manipulation of the system to present us with figures that dodgy you could use it as fish bait.

Either way he should no longer be Minister of Finance.
- Lanthanide 1.1
  
  14 July 2011 at 10:55 am
  
  It’s fraud.
  
  I’d like to see the Serious Fraud Office make a public statement about it.
- mik e 1.2
  
  14 July 2011 at 11:03 am
  
  Borrowing Bill is one of the worst finance ministers this country has ever had . He has managed to get little more than 1% growth in our economy in %years in the job 98-99 -.3% 08,09 – 09,10 -10,11 less than 1% growth but in those years he has managed to borrow more every single year.
sdm 2

14 July 2011 at 8:02 am

But if the proceeds from those asset sales are re-invested into capital, then the amount of capital owned by the taxpayer has not diminished.

Personally, I think there are a number of assets that should be sold. Why, for example, does the government own Quotable Value and VTNZ
- Blighty 2.1
  
  14 July 2011 at 8:10 am
  
  VTNZ was privatised in 1999.
  
  Why does the govt own Quotable Value?
  
  a) it’s a natural monopoly, which would give a private owner the power to charge monopoly prices
  
  b) it performs an important structural function – QV is the basis of our rating system – that must be above commercial influences. SOEs are required to consider the impacts of their actions on New Zealand society, private companies are not.
  - sdm 2.1.1
    
    14 July 2011 at 8:58 am
    
    Incorrect, many private valuation companies provide services to TLAs as to their rating valuations. QV does auckland city, and is the biggest player, but not the rest of the country.
    
    Its not a monopoly – why is it owned by the state
    - Akldnut 2.1.1.1
      
      14 July 2011 at 1:07 pm
      
      It’s a monopoly in Auckland, err why would we sell a monopoly that we own only to pay more to a private owner? Shades of telecom.
    - Ed 2.1.1.2
      
      14 July 2011 at 2:21 pm
      
      Having private firms provide services does not negate the responsibility of VTNZ for ensuring that valuations are free from commercial bias, and that valuations by any valuer (regardless of whether employed or a contractor) are suitably checked for validity.
      
      Proposing that values be set by private companies (presumably chosen and paid for by owners?) is similar to having private house inspectors replace council inspectors, or removing mine inspectors because companies can be trusted to look after safety . . .
      - sdm 2.1.1.2.1
        
        14 July 2011 at 10:16 pm
        
        No its not. Rating valuations are done by marginal regression analysis. it is about taxation. to compare it with health and safety, or life and death, is wrong.
    - Ari 2.1.1.3
      
      14 July 2011 at 10:29 pm
      
      Perhaps we own QV so we can set publicly acceptable standards for valuations, and thereby encourage any private businesses competing to live up to the same standards in their competition.
      
      In short: For the same sorts of reasons we own Kiwibank.
      - davidc 2.1.1.3.1
        
        14 July 2011 at 10:35 pm
        
        Yeah we “own” Kiwibank but it uses GE Money for all its lending.
        
        Fail.
        
        Colonial Viper 2.1.1.3.1.1
        
        14 July 2011 at 11:11 pm
        
        Your fail is in understanding that all banks who operate in NZ are connected to wholesale money markets and source funds from offshore.
        
        Your next fail is understanding that the profits of the Australian banks are repatriated to Australia, and we get to keep the profits from KiwiBank in NZ.
        
        Deadly_NZ 2.1.1.3.1.2
        
        15 July 2011 at 12:12 am
        
        Prove it!! or shut up.
logie97 3

14 July 2011 at 8:03 am

Is Joky Hen a new “unacceptable face of capitalism”?
Can we expect a book out anyday (published under a pseudonym of course)
on how to beat the tax.
Fancy a person in a leadership position suggesting to Kiwi Mums and Dads all the ruses to avoid paying a CGT. But then he would know after all – and begs the question just how many other tax avoidance ruses might have been used to avoid rendering unto Caesar that which…
Secret Squirrel 4

14 July 2011 at 8:19 am

It shouldn’t be an either/or question. We can have neither or either or both. And bits of any mix.
- mickysavage 4.1
  
  14 July 2011 at 8:29 am
  
  Help, help. Peter Dunne is posting under the name Secret Squirrel and is engaging in the stating of the bleedingly obvious.
  
  Explain this SS.
  
  The budget only balanced because the Government put the $6b from sale proceeds into it. Labour wants to keep the power company shares. It has to find $6 billion. It can do this by borrowing this amount and then having a new tax introduced to pay for interest and capital repayments as time goes by.
  
  Address the specifics rather than stating the bleedingly obvious.
  - higherstandard 4.1.1
    
    14 July 2011 at 8:50 am
    
    Mickey what’s the interest on $6 billion at government borrowing rates ?
    - mickysavage 4.1.1.1
      
      14 July 2011 at 9:01 am
      
      At 5.5% $330 million a year.
      - mik e 4.1.1.1.1
        
        14 July 2011 at 11:05 am
        
        Don,t forget the $300million a year in lost revenue.
        
        mik e 4.1.1.1.1.1
        
        14 July 2011 at 11:10 am
        
        over and above interest cost
        
        mickysavage …
        
        14 July 2011 at 11:35 am
        
        Aye Mik e
        
        I thought the next question would be how much do the shares return. The answer would be in the vicinity of $700 to $800 million per year including reinvestment and further asset acquisition.
        
        Makes the whole privatisation thing look exceedingly stupid.
        
        Deadly_NZ 4.1.1.1.1.2
        
        15 July 2011 at 12:14 am
        
        And the $3.8 million a week borrowed.
        
        Colonial Viper …
        
        15 July 2011 at 12:34 am
        
        I think that’s $380M pw right? Although the figure is dropping substantially now as English has managed to load up his kitty for the moment.
  - Secret Squirrel 4.1.2
    
    14 July 2011 at 8:53 am
    
    Are you too excited to think this morning? Are you Phil Goff blaspheming under the name of mickysavage?
    
    Now, it just comes down to a simple choice about this country’s future:
    
    Do you want our strategic assets sold off to foreigners while some of the wealthy continue to avoid paying their fair share?
    
    Or do you want us to own our future with a fair tax system that takes the burden off work and on to capital gains?
    
    It isn’t a simple choice on two completely different types of policy.
    
    National are proposing a watered down partial asset sale program involving a handful of state assets.
    
    From what has been leaked Labour is proposing a watered down CGT with exemptions for it’s targeted demographic.
    
    There’s a hell of a lot more important things than either of those pet voter pandering policies.
    - mickysavage 4.1.2.1
      
      14 July 2011 at 9:45 am
      
      National are proposing a watered down partial asset sale program involving a handful of state assets.
      
      No they are planning selling $6 b of assets in a strategically vital area that return 17% to pay off debt interest on which is 5%. There is nothing watered down about that.
      
      There’s a hell of a lot more important things than either of those pet voter pandering policies.
      
      Like what? Who smiles and waves best?
      
      Selling a significant interest in our power companies to overseas interests is not a trivial matter.
- Lanthanide 4.2
  
  14 July 2011 at 10:57 am
  
  “It shouldn’t be an either/or question. We can have neither or either or both. And bits of any mix.”
  
  After the election either National will be in power and will sell state assets, or Labour will be in power and enact CGT.
  
  Choose one.
  
  If you don’t like it, start your own political party and propose something else.
  - Secret Squirrel 4.2.1
    
    14 July 2011 at 11:06 am
    
    There’s a lot more to choose from than one policy over another. Labour seems to want to put all it’s money on CGT, but asset sales are a sideline pander for National.
    
    And what if National, or Labour, get the most seats and have to form a coalition with, say, the Maori Party who will only agree to a coalition if neither are done?
    - Lanthanide 4.2.1.1
      
      14 July 2011 at 11:12 am
      
      “but asset sales are a sideline pander for National”
      
      No, asset sales are not a sideline pander for National. Apparently you’ve been under a rock and haven’t noticed them talking up “kiwi mums and dads” buying into these assets.
      
      “And what if National, or Labour, get the most seats and have to form a coalition with, say, the Maori Party who will only agree to a coalition if neither are done?”
      
      Then if worst comes to worst, no government is formed and we have a new election. But raising a theoretical outcome such as this (where has the MP said they would not form a coalition with either party based on these policies?) doesn’t actually detract from the point of the question: the major parties are proposing different policies, choose the one you like best.
      
      You might be a Kiwi Party voter, that doesn’t mean you can’t choose between CGT and privatisation even if the KP stands for neither.
      
      Put it another way: if you are FORCED to have either of the outcomes, what would you prefer?
      - Secret Squirrel 4.2.1.1.1
        
        14 July 2011 at 11:26 am
        
        I’d look at the whole policy package plus personnel and make a judgement on that.
        
        I’m dubious about the benefits of partial asset sales but a lot worse things could happen.
        I’m dubious about a CGT that picks and chooses too many groups via exemptions.
        
        I don’t think either will affect me much, but I think both are being driven for the wrong reasons.
        
        I’d base my decision on much more than either of these two vote orientated policies.
        
        Lanthanide 4.2.1.1.1.1
        
        14 July 2011 at 11:32 am
        
        “I’d look at the whole policy package plus personnel and make a judgement on that.”
        
        They’re not asking who you’re going to vote for, they’re asking, if you have to choose one of the policies, which you’d prefer.
        
        If they were asking who you were going to vote for, the question would be “Who are you going to vote for”, not “which do you prefer: CGT or privatization”, which is the question they actually asked.
        
        Secret Squirrel …
        
        14 July 2011 at 11:35 am
        
        That’s the question asked here. On the surface.
        
        You don’t think the whole angle is Natonal=Assets versus Labour=CGT?
        
        Lanthanide …
        
        14 July 2011 at 12:25 pm
        
        Given that the polls strongly indicate that National are more preferred over Labour, no, I don’t believe that the people who answered the question interpreted it as Nat = asset sales and Labour = CGT, because if they had, we would expect to see asset sales as more preferred.
        
        I think the people answering the question answered it as asked – which of the two policies would you prefer.
        
        Note that the Greens have had a CGT policy for a long time, and I believe that Mana does also. Someone who prefers CGT over asset sales may not be a Labour voter.
Herodotus 5

14 July 2011 at 8:26 am

As someone who supports the concept I am already taken back by these comments, and I bet that the 31% polled were not aware of Labs lolly scramble of exceptions already being touted.
“Labour will exempt the first $250,000 in gains from the sale of small business assets to protect those who have invested in their enterprises as a means of saving for their retirement.” So why is not every NZer treated equally. I would love to have my retirement savings also have $250k tax free subsidy, giving me an additional $37.5k tax savings over everyone else.
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10738345
“A panel of tax experts will be invited to resolve the complex issues involved in constructing a viable and loophole-free capital gains tax. ” So there was not a well thought out policy so how can we support a policy with no details – do we trust politicans that much? remember 84 or 91 !!!
So how can the likes of “Even John Whitehead agrees. The just retired head of Treasury is the biggest name so far to come out in favour of Labour’s CGT” come out in supprt when there are no details just a concept!!!!
Unfortunately the details or should I say the lack of could stall this policy.
- davidc 5.1
  
  14 July 2011 at 8:43 am
  
  Key and co will slaughter Labour over this lack of detail. Goff will have estimated tax takes based on assumptions with all the detail of the policy missing. Impossile to defend.
  - r0b 5.1.1
    
    14 July 2011 at 9:40 am
    
    You’re comfortable defending the Nats booking the profit for asset sales, without accounting for the lost income stream? Is that the level of your bar for credible economic performance?
  - Blighty 5.1.2
    
    14 July 2011 at 10:01 am
    
    who says the detail of the policy is missing? We’ve seen heaps of detail so far.
    
    Of course mere operational details will worked out by IRD, they always are. But the policy choices are for the politicians and it seems like Labour has sorted them.
  - Zaphod Beeblebrox 5.1.3
    
    14 July 2011 at 10:06 am
    
    So a short term dumb policy (asset sales to Australian Super Funds) is better because its easier to explain?
    
    CGT is not being proposed because it will be popular or easy to explain.
    - Secret Squirrel 5.1.3.1
      
      14 July 2011 at 10:33 am
      
      Then why try to simplistically frame it as “CGT or asset sales? Which do you prefer?”
      - Lanthanide 5.1.3.1.1
        
        14 July 2011 at 10:59 am
        
        See 4.2.
      - bbfloyd 5.1.3.1.2
        
        14 July 2011 at 11:37 am
        
        ss, the question as framed is utterly clear. the choice is stark. what is really going on in that mind of yours?
        
        if you have a compulsion to wallow in minutiae, then go for it, but posing obviously simplistic questions that have self evident answers is exposing flaws in either your intellect, or emotional balance.
        
        or are you just being contrary because you can?
        
        Lanthanide 5.1.3.1.2.1
        
        14 July 2011 at 12:27 pm
        
        I’ve often argued pedantically over minutia.
        
        But I honestly don’t think there’s any reasonable argument that can be made in this case.
  - mik e 5.1.4
    
    14 July 2011 at 11:19 am
    
    So read my lips John Key no new tax.s .What about the loss of 17.6% of dividends loss on the asset sale no mention where thats coming from .Borrowing bill will just borrow more and sell more while the economy stagnates.
- Colonial Viper 5.2
  
  14 July 2011 at 11:19 am
  
  Gotta agree with Herod, the more exemptions the more loopholes for the big players to exploit.
  - Chris 5.2.1
    
    14 July 2011 at 12:02 pm
    
    Yeah I agree as well. I am for a capital gains tax but it needs to be as simple as possible it is the only way to close loopholes, which is the main benefit of the tax.
vto 6

14 July 2011 at 8:46 am

Hey Bill English..

Can I have some of that shit whereby you get to sell a business and yet keep the ongoing income stream from that business?
vto 7

14 July 2011 at 9:15 am

If the assets are no good and not worth owning then why would some other person want to own them?

If the assets are good and well worth owning and will be snapped up by investors then why would we sell them?
- Draco T Bastard 7.1
  
  14 July 2011 at 1:28 pm
  
  If we had politicians that were doing the best for the country that they can then they wouldn’t. But we don’t have those in government ATM. The government is pandering to its base – rich, foreign investors.
Tangled up in blue 8

14 July 2011 at 9:23 am

CGT or asset sales? Which do you prefer?

I much prefer a CGT but think it’s a somewhat misleading question as asset sales provides money the Govt. needs immediately and a CGT doesn’t. Many commentators are backing a CGT not because it’s a big money earner but because it’s a way to reallocate capital to more productive areas.

Perhaps the question should be ‘Reverse top tax cuts or asset sales? Which do you prefer?’.
- Lanthanide 8.1
  
  14 July 2011 at 11:00 am
  
  It’s asking people to compare the two major planks of economic/election policy so far released by the two largest parties.
- Draco T Bastard 8.2
  
  14 July 2011 at 1:31 pm
  
  …as asset sales provides money the Govt. needs immediately…
  
  No it doesn’t. The government can borrow the money or, even better, just print it and then increase taxes to cover the added money.
  - Tangled up in blue 8.2.1
    
    14 July 2011 at 2:49 pm
    
    How doesn’t the Govt. not receive money from asset sales straight away?
    - Draco T Bastard 8.2.1.1
      
      14 July 2011 at 5:14 pm
      
      Well, I suppose I should have been clearer. It’s not the only way a government could raise cash immediately and, considering that it leaves the government books worse off in the long run resulting in more borrowing later it’s not the best option either.
queenstfarmer 9

14 July 2011 at 9:38 am

55% prefer CGT vs 32% for privatisation

Well then it’s good to know that the Govt isn’t planning to privatise any state assets.
- Blighty 9.1
  
  14 July 2011 at 10:15 am
  
  right. Are you saying that because National calls their privatisation scheme “mixed ownership”?
  
  Well, sorry to disappoint you, but even Key forgets his lines and says the P word sometimes, like on Tuesday:
  
  Rt Hon JOHN KEY: I do dispute that, and I do that on the basis of a report by Pattrick Smellie, which goes on to say: “One of the least defensible criticisms of the Key Government’s partial privatisation plans…”
  - queenstfarmer 9.1.1
    
    14 July 2011 at 11:35 am
    
    That’s right, partial privatisation != privatisation. I won the debate on this the other day.
    
    [note != means “not equal to”, I reckon it should be popularised as useful shorthand]
    - Lanthanide 9.1.1.1
      
      14 July 2011 at 12:29 pm
      
      Partial privatisation is clearly a subset, or type, of privatisation. You can tell by the way it has “privatisation” in it.
      
      Much that same as a “plasma television” is still a television, “partial privatisation” is still privatisation.
      - queenstfarmer 9.1.1.1.1
        
        14 July 2011 at 3:10 pm
        
        Yes, but that doesn’t apply to a verb such as privatise.
        
        For example, you wouldn’t described a house as “completed”, if in fact it was only “partially (ie 49%) completed”, or would you?
        
        Lanthanide 9.1.1.1.1.1
        
        14 July 2011 at 3:57 pm
        
        If you were running at 49% of your top speed, would you say you were “running” or “walking”?
        
        queenstfarmer …
        
        14 July 2011 at 4:30 pm
        
        Jogging
        
        Colonial Viper 9.1.1.1.1.2
        
        14 July 2011 at 6:14 pm
        
        I guess losing 49% of your income stream forever is acceptable 🙄
    - Blighty 9.1.1.2
      
      14 July 2011 at 12:46 pm
      
      so when your girlfriend says she’s ‘a little bit pregnant’, it’s not the real thing?
    - Draco T Bastard 9.1.1.3
      
      14 July 2011 at 1:32 pm
      
      No you didn’t, people just started ignoring your delusional ravings.
DeeDub 10

14 July 2011 at 9:47 am

Well, we’re left in no doubt as to what Mike Hosking thinks.

http://www.newstalkzb.co.nz/newsdetail1.asp?storyid=200442

What a misspelled 10th century Danish king!
- queenstfarmer 10.1
  
  14 July 2011 at 11:37 am
  
  I’m in some doubt, but only because he seemed quite in favour of CGT the other day.
Matthew Hooton 11

14 July 2011 at 10:15 am

Where do I tick “I want both”?
- mickysavage 11.1
  
  14 July 2011 at 10:27 am
  
  You want everything!
  
  Any thoughts Matthew on Blinglish giving himself a lower debt projection by counting the proceeds from asset sales but not the ongoing cost of lost dividends?
- Chris 11.2
  
  14 July 2011 at 12:03 pm
  
  Haha yeah me too.
  - Blighty 11.2.1
    
    14 July 2011 at 12:48 pm
    
    Well. If you vote Labour, you’ll get a CGT and there’s always the possibility of asset sales when National next gets in.
    
    If Labour loses, you’ll get asset sales but CGT will be a dead duck, and you’ll never see a major party implement it.
    
    So, vote Labour if you want both – it’s the option with the maximum probability that you’ll get both..
- millsy 11.3
  
  16 July 2011 at 4:13 pm
  
  So what have the Chinese promised you for helping them get their filthy hands on OUR hydro dams and coal mines?
  
  A place in our Vichy government perhaps?
- mikesh 11.4
  
  18 July 2011 at 4:27 pm
  
  Easy for me. I just don’t tick either.
tsmithfield 12

14 July 2011 at 10:17 am

For all the talk on this site about how popular the CGT will be, it seems that the overseas experience is that people hate them and that governments are starting to withdraw from them.

From the digital version of The Press (quoted in full here since a link won’t go through unless you are paid up with “the Press”):

Capital gains tax ‘unpopular’ overseas

Capital gains taxes are unpopular overseas and governments are being pressured to reduce them, a tax expert says.
Aaron Quintal, tax partner at Ernst & Young, says a capital gains tax has been in place in Australia since 1986 covering not only property but the sale of businesses, shares and other investments.
‘‘There’s kind of a New Zealand mindset that it’s a human right to be able to make a capital gain and not pay tax on it, which the rest of the world doesn’t really share.’’
However, Australia had softened its capital gains tax, with many exceptions and concessions for people not considered traders.
Those who had owned an asset longer than 12 months only paid their personal tax rate on half their gain rather than the full amount, Quintal said.
Other countries were also under pressure to reduce capital gains tax or increase exceptions.
‘‘It’s more of an unpopular tax.’’
Ernst & Young also estimated that the tax take from a capital gains tax would be much lower than the $4.5 billion suggested by the Tax Working Group. It estimated that the annual revenue was $675 million, because the working group had based its figures on a more comprehensive tax base, including farms and businesses, and used marginal tax rates instead of the 15 per cent purportedly being proposed.
‘‘And that’s if everyone sells their properties,’’ Quintal added
- Draco T Bastard 12.1
  
  14 July 2011 at 1:37 pm
  
  tsmithfield states the bleeding obvious – that people don’t like taxes – and then tries to use that as an argument against a necessary tax.
mickysavage 13

14 July 2011 at 10:39 am

Question:

Who said “[t]he right thing to do would be to have a comprehensive capital gains tax”?
- Secret Squirrel 13.1
  
  14 July 2011 at 10:45 am
  
  It doesn’t sound like it’s going to be Phil Goff.
  
  I hope it’s not as full of exemptions as reports suggests, with distortions like 15% CGT (for those that can’t escape the holes) alongside raising the top tax rate even further away from that.
- Tangled up in blue 13.2
  
  14 July 2011 at 11:09 am
  
  I’m hoping for a CGT that’s more than just electioneering from Labour.
  
  So applied somewhat retrospectively and close to 30% on most capital gains.
  - Lanthanide 13.2.1
    
    14 July 2011 at 11:14 am
    
    I’m sure Labour will refrain from electioneering if National does too.
    
    That means selling 100% state ownership in the power companies, Air NZ and Kiwibank, instead of just the 49% stakes they’re doing now purely for electioneering purposes.
    
    What’s good for the goose is good for the gander.
- queenstfarmer 13.3
  
  14 July 2011 at 11:39 am
  
  If Blingish said it, could it signal a strategic shifting in National’s stance?
  - Colonial Viper 13.3.1
    
    14 July 2011 at 6:12 pm
    
    strategic shifting to what the weekend’s focus groups told them?
- freedom 13.4
  
  14 July 2011 at 1:28 pm
  
  but if Bill thinks its the right thing to do and he has been making all these terrible decisions lately does that mean it is a mistake to implement a CGT? A person could go nuts trying to understand that man.
- Draco T Bastard 13.5
  
  14 July 2011 at 1:39 pm
  
  Answer here
johnm 14

14 July 2011 at 11:39 am

No Asset Sales and a CGT.(No way is it an either or) However with CGT it’s all a bit late.A CGT should have been operating 12 years ago.It’s now too late to remedy the speculative windfalls 200,000 kiwis have themselves bid into existence(Some of whom have 5,6,7 Houses in addition to their own homes,Surely the very definition of GREED?!) with the collusion of government and the banks and too late to remedy the unaffordability of buying their first family home for most young kiwis-: GREED triumphs again over social equity and fairness.
- Treetop 14.1
  
  14 July 2011 at 2:14 pm
  
  At least if you own more than the home you live in, you have time to sell the other houses before the GGT is implemented. I don’t know if savings in the bank are to be included in the GGT?
  
  If power assests are sold a person is unable to avoid this loss occurring as the seller is the government and not an individual.
  - mikesh 14.1.1
    
    18 July 2011 at 5:17 pm
    
    Aristotl told us 2500 years ago that there can never be a capital gain with money. 1000 drachmata will always be worth 1000 drachmata.
randal 15

14 July 2011 at 11:50 am

ha ha hooton. I want both too!
randal 16

14 July 2011 at 12:39 pm

sock it to ’em. if ya give the proletariat money in this country they just waste it on toys and hardly davisons and leaf blowers and trips to places they never knew existed before until the travel agent blew them a kiss.
- prism 16.1
  
  14 July 2011 at 2:01 pm
  
  randal Right on, lead me to the leaf blowers and hardley davidsons!
swordfish 17

14 July 2011 at 1:42 pm

But hang on a minute, Eddie. That nice Mr Key has assured us that, if we adopt CGT, we’ll almost certainly all be murdered in our beds. I, for one, believe he’s sincere.
Chris 18

14 July 2011 at 5:19 pm

[deleted]

[lprent. Chris has been persistently violating the ban. He is now permanent spam. ]
- Kaplan 18.1
  
  14 July 2011 at 9:20 pm
  
  This just in.
  Boy Racers against car crushing law.
  Pub owners against tighter liquor laws.
  Large corporation against capital gains tax.
Bored 19

14 July 2011 at 5:20 pm

Myself I reckon that there will be few capital gains to tax, the world is heading first for extreme deflation with a lack of liquidity…fewer transactions at lower prices, so no capital gains. That is likely to be followed by massive money prints etc, inflation of the money supply diluting real value, so as prices shoot up any capital gains be worth bugger all in real terms.

CGT is a good idea, it should have been here years ago, now its far too late.
- Colonial Viper 19.1
  
  14 July 2011 at 6:11 pm
  
  Bored, in your scenario its even more important that we keep our hard assets. Oh, and buy gold.
- mikesh 19.2
  
  18 July 2011 at 4:29 pm
  
  Yeah. That’s about the only thing I can think of in favour of a CGT. Nobody will ever have to pay it.
The Gormless Fool formerly known as Oleolebiscuitbarrell 20

14 July 2011 at 5:48 pm

“CGT or asset sales? Which do you prefer?”

Only your tax won’t raise any money.
- lprent 20.1
  
  14 July 2011 at 11:16 pm
  
  Nor will asset sales over the long term – it will cost revenue. Or haven’t you bothered to read what the loss in dividends will be for the government?
  
  It is just another typical National short-term fix whilst avoiding the longer term issues. Just like I’ve seen from every National government since I started voting. Borrow and hope. Sell and hope. Do fuck all because they reflect their mayfly voters.
chris73 21

14 July 2011 at 5:51 pm

How about a third option: More mining
- davidc 21.1
  
  14 July 2011 at 6:19 pm
  
  Ok now I want all 3 options!
  
  Its weird but with a CGT I will actually pay less tax! yippeee! and I can own passive rentals again! yippee!
  - Colonial Viper 21.1.1
    
    15 July 2011 at 12:37 am
    
    Actually we need a viable landlord class to provide quality rental housing to the community.
    
    No need to say thanks, mate, just enjoy.
    - mikesh 21.1.1.1
      
      18 July 2011 at 4:35 pm
      
      Amen to that. There are too operators making no profits and therefore paying no income tax. That’s the problem we should really be addressing. CGT is just a bandaid. And besides it hits profit making landlords as well as the non profit making ones.
tc 22

14 July 2011 at 6:28 pm

You NACT sycophants and rwnj’s need to get out more…….hear that, it’s the sound of your spin losing traction and the electorate waking up to the reality you have no plan just the same old slash n burn and sell us out to foreign interests.

Pike rivers a sad reminder as to the impact of the rights belief that the market solves all…..last time I looked it only made the rich and powerful more so.
- davidc 22.1
  
  14 July 2011 at 6:51 pm
  
  tc, your Mesiah promised a tax policy to counter the partial asset proposed by the Govt and has instead put forward a mixed bag of over complicated bullshit that doesnt earn anything for the next 10 years. Roll on November your lads are going to get hammered if this is the best you can do.
  
  As for the Pike River mine, I am in favour of hanging for level of incompetence. and for the guy at LWR too.
  - Colonial Viper 22.1.1
    
    15 July 2011 at 12:38 am
    
    davidc, Labour is not looking at this year or next year to balance the budget. Over a decade, the CGT will bring in many billions of dollars of revenue, directly and indirectly.
- mikesh 22.2
  
  18 July 2011 at 4:48 pm
  
  Actually I’m a strong supporter of the Labour/Green ticket. But I don’t have to agree with everything they propose, and I think I have been one of the more vociferous opponents of CGT on this website.
  It may be termed a “gamechanger” but it’s a pretty feeble excuse for a plan.
Reality Bytes 23

14 July 2011 at 8:31 pm

If Do-nothing Dunster was Do ing his job properly this wouldn’t be an issue in the first place.

Apparently we already have CGT. So why are the current team in power bitching about it?

The buck stops with our revenue minister.

Mr Dunne, care to comment?
Drakula 24

14 July 2011 at 9:21 pm

The way I see it selling our assets, especially our power producers is about as stupid as a person selling their fishing rod to buy fish!!!!

With regards to CGT I think that there should be exemptions to our 1st home but I see the more exemptions, the more loop-holes. The legislation here will have to be absolutely water tight.
NickC 25

14 July 2011 at 9:46 pm

I quite like both.
- higherstandard 25.1
  
  18 July 2011 at 5:10 pm
  
  Count me in