Herald praises Cunliffe for CGT policy

Written By: - Date published: 9:30 am, May 19th, 2015 - 28 comments
Categories: Andrew Little, david cunliffe, Economy, john key, labour, national, national/act government, newspapers, same old national - Tags:

David Cunliffe vote positive

There is an old saying that in politics it is wrong to be right too soon. Brand new ideas may be too terrifying or unsettling for the electorate to be popular. They are also easy targets for a calculating opponent wanting to exploit ordinary voter’s general cynicism about politics for political gain.

This week provides a perfect example of this phenomenon.  After repeatedly railing against Labour’s CGT policy National is now introducing one of its own.  It may be an insipid capital gains tax designed only to create the impression that the Government is doing something but a CGT it is.  At the same time the Government is crossing its fingers that Auckland’s housing bubble does not burst.  The deeply cynical political games played by John Key are becoming increasingly clear.

Today’s Herald editorial has praise for Labour’s policy for the past two election campaigns but also contains a barb, attempting to suggest that Andrew Little is anti CGT.  It starts off promisingly enough:

At long last New Zealand is going to have an effective capital gains tax. The Prime Minister does not want to call it a capital gains tax but that is what it is. Houses bought as investment property will have their capital gain taxed if they are sold within two years. A two-year liability is very low but it can easily be increased if it does not slow the rate Auckland house prices are rising. The significance of the Government’s adoption of this tax should not be under-estimated.

The effectiveness of the proposal could be questioned.  As noted by Deborah Russell all the change may do is slow down turnover in the market.  Investors seeking to hold long term will not be deterred.  And there could be an unfortunate repercussion should the housing bubble burst and investors seek tax benefits from their losses.

The editorial then describes how until recently the country’s political climate has been deeply adverse to a CGT.  But it then praises David Cunliffe for the change in opinion.

If there is any politician who deserves history’s credit for changing this climate it is the former Labour leader David Cunliffe. As Labour’s finance spokesman he was instrumental in putting capital gains tax into the party’s policies for the 2011 election and kept it there as party leader at the election last year. The fact that National did not make a major issue of it in 2011, and did no more than trip Mr Cunliffe on details of the policy last year, suggests some within the Government were coming around to it.

If National ministers were coming around to it they should not have played politics with the issue.  And the repeated denials that change was in the winds should not have been made.

Then the editorial attempts to wedge Andrew Little on the issue.

Now that the Prime Minister has performed a pirouette, Labour’s leader needs to do likewise. Andrew Little was too quick to disown capital gains tax when he became the party’s leader. It was not the reason Labour had lost the election. Now he is reduced to quibbling that the Government’s move will not stop foreign investment in houses here. Perhaps not, but its decision also to require house purchasers to have an IRD number will be a check on the scale of foreign interest in our houses.

The requirement for an IRD number is a start to allow us to understand the amount of foreign investment in housing that is occurring.  But Labour’s policy preventing the purchase of residential homes by overseas entities would address the problem, rather than just measure it.

And the suggestion that Little has disowned a CGT is a misrepresentation.  Shortly after he became Labour leader he said this:

I’ve made a judgement that the superannuation policy and the capital gains tax policy have been problems for us and are two reasons why people haven’t voted for us, and therefore we need to review them.

We will have a review process, we will go through that. I will argue my case in the forums of the party, but my firm view is that we should not be going to the 2017 election with those policies on our slate.

The party is now discussing its policy platform and there is a proposal to change a specific commitment to a CGT to a commitment to use a diversity of financial tools to address housing affordability and to dampen speculation.

Local politics has become rather predictable.  National does not have complex policy.  It has a series of postcard quality snippets of policy with some bland pleasant sounding slogans and a specific budget line item for things as diverse as hercepton or saving Kauri.  This is risk free politics.  There is nothing that can be picked apart.

By way of contrast Labour has fully costed policies that go into all sorts of detail.  Our alternative budgets are things of beauty and require immense amounts of work.  And National then attacks by attacking a slightly obscure sentence or by asking a question of the Labour leader which he does not quite get right.  Because National’s policies are so vague Labour cannot do this.  Little’s proposal will reduce National’s ability to attack and will still allow a future Labour Government the flexibility to change the tax system in a way that will address problems.

Labour and the Greens own the CGT policy and National’s backdown has made discussion about housing very simple.  Instead of should there be a policy the discussion can now be is two years an adequate purpose and should there be a restriction on overseas ownership of dwelling homes.

All credit to the Herald for praising Cunliffe.  Perhaps they could now apologise to him for the Donghua Liu smears.

28 comments on “Herald praises Cunliffe for CGT policy”

  1. Colonial Rawshark 1

    Recognition for some of the good things DC did is long over due. However, the utter cynicism of the NZ Herald for praising Cunliffe AFTER the election when he is no longer the Labour leader and not in a role of any threat to John Key’s position.

    • Sabine 1.1

      Yep, recognition was long overdue, however there is no Mea Culpa from the NZ Heralds stenographer that they have got it wrong, so spectacularly wrong in their cheerleading for the Ponytail Puller from Parnell.

      In saying that, i wish Cunliffe a lot of fun during question time. 🙂

  2. Adrian 2

    I think you’ve got a problem here. You state “the suggestion that Little has disowned a CGT is a misrepresentation” and then immediately quote him saying his ‘ firm view is that we should not be going to the 2017 election with those policies (CGT) on our slate. To use a currently popular phrase; if it looks like a disowning and walks like a disowning, its a disowning.

    I always thought it was a mistake to ditch the policy so soon after the election. He’s since been cut off at the knees first by the Reserve Bank and now by Key.

    • mickysavage 2.1

      I am suggesting the policy has not been ditched rather that Little thinks we should not be so precise. Besides the discussion will now be if National’s proposal is adequate or not and if it should be strengthened.

      He was not saying the policy is wrong. He was suggesting that it may have been to precise.

      • Sacha 2.1.1

        Little sounded an awful lot like he was blaming the CGT policy for Labour’s defeat when campaigning to be its leader. Not in a measured way either.

        • mickysavage 2.1.1.1

          He mentioned it at the same time he mentioned increasing the age of eligibility for superannuation. He was not saying that they were necessarily wrong just that they needed to be reviewed because they appeared to be unpopular. Politics is all about working out what policies are desirable and what are achievable.

          • Sacha 2.1.1.1.1

            Needed some comms help at the time, possibly. That’s not what came across to me via media. Not that they distort the message at all, naturally.

          • sirpat 2.1.1.1.2

            is there much surprise then that after mentioning those two things that Labour got pissed on in the election???

        • rhinocrates 2.1.1.2

          I hope that was for public consumption and not just him believing the easiest thing to believe. Sidelining a single unpopular policy is easy, disciplining a lazy backstabbing rabble widely perceived as being unable to find their arses in a brewery and turning it into a viable government in waiting is hard… and saying that’s the real problem in public would be disastrous. Time to consult the tea leaves…

          It’s not all about “coms”. That’s based on the belief that one can control perceptions purely and simply through explicit communication while in fact people are very adept overall at assessing character intuitively. The “rational consumer” is a myth of the neoliberals and the “rational voter” should be dismissed too, and you shouldn’t underestimate “irrational” perception and thinking.

          IIRC, polling showed that people favoured individual Labour policies when presented in isolation, but the election showed that they had no confidence in the party and I believe that was based on it being perceived an unsafe bet.

          • Colonial Rawshark 2.1.1.2.1

            +1

            IIRC, polling showed that people favoured individual Labour policies when presented in isolation, but the election showed that they had no confidence in the party

            And within 12 hours of election night being over, the NZ public was vindicated in their judgement as Labour fell apart faster than an Antarctic ice shelf in summer.

      • Adrian 2.1.2

        Your interpretation of what he said and what he actually said are two very different things.

  3. Halfcrown 3

    There’s a saying somewhere, can’t remember exact saying but it is about Greeks and gifts, I think it is Beware of Greeks that come bearing gifts. In this case Beware of right wing excuses for shithouse paper praising left wing politicians

    I do not trust that pathetic excuse for shithouse paper, and although I have not read it and have no intention of reading it, I suspect it is more about an attack on Little than praise for Cunliffe.

    • Colonial Rawshark 3.1

      Ahh quite right. I hadn’t thought of it like that. This piece will strengthen the hand of those in caucus who like measures like CGT and raising the retirement age.

  4. Sans Cle 4

    Too little, too late for David Cunliffe. Leader of a party more sinned against than sinning. Shame on the perpetrators in the MSM, who orchestrated the witch-hunt.

  5. Sacha 5

    As you note (and the Herald studiously ignores), the Greens were all over CGT long before Labour adopted the policy. Not that they mind I’m sure. Success comes in many forms.

    • AmaKiwi 5.1

      They should mind.

      Standardnistas are part of a tiny percent follow the details. The average voter goes by broad generalities, which is why slippery John gets away with so much evil.

  6. Old Mickey 6

    Does Bill Rowling deserve a hat-tip ? His 1973 (?) speculation tax was targeting the same issues – Auckland house prices. This version is far simpler, however, unlikely to do more than suppress supply for 2-3 years.

    • Colonial Rawshark 6.1

      What are you talking about “suppress supply”? Please explain how this taxation “suppresses supply.”

    • AmaKiwi 6.2

      This bill will do bugger all nothing. Nothing short of Draconian measures would have any impact on our local property market.

      The property boom is worldwide. You can’t stop a global financial mania anymore than you can stop a herd of stampeding buffalo short of dropping a bombs in their path.

      When the bubble bursts, every commentator will have an explanation. But the simple truth is it burst because the social mood changed. People go from euphoria to fear. That’s when the party is over.

  7. Sable 7

    So property investors can blame Labour not National who introduced the tax? Sure MSM we all believe you.

    • AmaKiwi 7.1

      @ Sable

      Spin and hype are everything. The truth is rarely heard by the public.

      Spin it right and you win.

      • North 7.1.1

        Yeah, Maggie Smith, the Downton Abbey dowager – “The truth is neither here nor there my dear……it’s the look of the thing…..”. Sad, but true. How else is His Gaucheness still skanking around as our PM ?

  8. Ad 8

    Not entirely fair to relegate Cunliffe’s career to shunting the supertanker of state tax policy a few degrees more progressive. But it’s major moment.

    I hope we hear from Cunliffe again. I was surprised he was not heard from during the regional economic development debate a week ago, since it was precise his portfolio. I suspect we may not hear from him again this term, rolled up inside caucus daily proving himself no threat.

    By 2017 election, he needs to think where he will make his mark in the world. Life is just too short. I would like to see him reinvented.

  9. emergency mike 9

    “The fact that National did not make a major issue of it in 2011…”

    Wait, what? I recall it being a core issue and one of National’s stock attack points during the election.

    • AmaKiwi 9.1

      Key to Cunliffe in a TV debate: (Key holding up five fingers) – Labour will impose FIVE new taxes.

      My heart sank at that moment.

  10. Peter Bradley 10

    It appears that Labours economic policies at the last election had some merit. The next step by the National government will be some sort of house building program. It won’t be called a government sponsored house building scheme but it will look like one and walk like one and probably smell like one.

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    Bryan GouldBy Bryan Gould
    1 week ago
  • More expert comments on the Canadian fluoride-IQ paper
    The Green et al (2019) fluoride/IQ is certainly controversial – as would be expected from its subject (see If at first you don’t succeed . . . statistical manipulation might help and Politics of science – making a silk purse out of a sow’s ear). Anti-fluoride campaigners have been actively promoting it ...
    1 week ago
  • The return to guerrilla war in Colombia
    by Gearóid Ó Loingsigh On August 29th a video in which veteran FARC (Revolutionary Armed Forces of Colombia) commander Iván Márquez announced that they had taken up arms again was released. There was no delay in the reaction to it, from longtime Liberal Party figure and former president Uribe, for ...
    RedlineBy Admin
    1 week ago
  • Air New Zealand identifies this enormous plot of unused land as possible second airport site
    Air New Zealand couldn’t believe its luck that this seemingly ideal piece of real estate had so far gone entirely unnoticed. Air New Zealand’s search for a site to build a second Auckland Airport may have made a breakthrough this afternoon, after employees scanning Google satellite imagery spotted a huge, ...
    The CivilianBy admin
    2 weeks ago
  • Redline on the Labour Party
    No-one on the anti-capitalist left in this country today puts forward a case that Labour is on the side of the working class.  There are certainly people who call themselves ‘socialist’ who do, but they are essentially liberals with vested interests in Labourism – often for career reasons. Nevertheless, there ...
    RedlineBy Admin
    2 weeks ago
  • New Fisk
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Labour’s failure
    When National was in government and fucking over the poor for the benefit of the rich, foodbanks were a growth industry. And now Labour is in charge, nothing has changed: A huge demand for emergency food parcels means the Auckland City Mission is struggling to prepare for the impending arrival ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Ardern attempts to vaccinate Clarke Gayford live on television to prove that it’s safe
    Gayford, pictured here on The Project, before things got wildly out of control. A bold public relations move by the Government to encourage parents to vaccinate their children has gone horribly wrong. Prime Minister Jacinda Ardern appeared on tonight’s episode of Three’s The Project, where the plan was for her ...
    The CivilianBy admin
    2 weeks ago
  • Has Mr. Whippy gone too far by parking on our front lawns?
    Mr. Whippy’s business model has driven it down a dark road of intimidation. Residents in major centres around the country are becoming disgruntled by the increasingly aggressive actions of purported ice cream company Mr. Whippy, who have taken to parking on people’s front lawns and doorsteps in a desperate attempt ...
    The CivilianBy admin
    2 weeks ago
  • Cleaning up the water
    Today the government released its Action Plan for Healthy Waterways, aimed at cleaning up our lakes and rivers. Its actually quite good. There will be protection for wetlands, better standards for swimming spots, a requirement for continuous improvement, and better standards for wastewater and stormwater. But most importantly, there's a ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Fronting up
    Today I appeared before the Environment Committee to give an oral submission on the Zero Carbon Bill. Over 1,500 people have asked to appear in person, so they've divided into subcommittees and are off touring the country, giving people a five minute slot each. The other submitters were a mixed ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Politics of science – making a silk purse out of a sow’s ear
    Anti-fluoride activists have some wealthy backers – they are erecting billboards misrepresenting the Canadian study on many New Zealand cities – and local authorities are ordering their removal because of their scaremongering. Many New Zealanders ...
    2 weeks ago
  • Democracy – I Don’t Think So
    So, those who “know best” have again done their worst. While constantly claiming to be the guardians of democracy and the constitution, and respecters of the 2016 referendum result, diehard Remainers (who have never brought themselves to believe that their advice could have been rejected) have striven might and main ...
    Bryan GouldBy Bryan Gould
    2 weeks ago
  • Government says it will now build just one really nice home
    Following publication of this article, the Ministry has requested it to be noted that this supplied image is not necessarily representative of what the final house will look like, and it “probably won’t be that nice.” As part of today’s long-anticipated reset of the Government’s flagship KiwiBuild policy, Housing Minister ...
    The CivilianBy admin
    2 weeks ago
  • Imperialism and your cup of coffee
    Over the next week or two we will be running three synopses of parts of the opening chapter of John Smith’s Imperialism in the 21st Century (New York, Monthly Review Press, 2016).  The synopsis and commentary below is written by Phil Duncan. Marx began Capital not with a sweeping historical ...
    RedlineBy Admin
    2 weeks ago
  • Still juking the stats
    The State Services Commission and Ombudsman have released another batch of OIA statistics, covering the last six months. Request volumes are up, and the core public service is generally handling them within the legal timeframe, though this may be because they've learned to extend rather than just ignore things. And ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Hard News: Time for a New Deal: 25 years on
    In 1994, I was editing an ambitious street mag called Planet, from a fabled office at at 309 Karangahape Road. The thirteenth issue of the magazine was published in the winter of that year and its cover embodied a particularly ambitious goal: the end of cannabis prohibition.I wanted to do ...
    2 weeks ago
  • Not impressed
    KiwiBuild was one of the Ardern government's core policies. The government would end the housing crisis and make housing affordable again by building 100,000 new homes. Of course, it didn't work out like that: targets weren't met, the houses they did build were in the wrong place, and the whole ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Solar beats coal
    As the climate crisis escalates, it is now obvious that we need to radically decarbonise our economy. The good news is that its looking easy and profitable for the energy sector. Wind is already cheaper than fossil fuels, and now solar is too:The levellised cost of solar PV has fallen ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • A Step Too Far.
    A Crown Asset? For reasons relating to its own political convenience, the Crown pretends to believe that “No one owns the water.” To say otherwise would re-vivify the promises contained in the Treaty of Waitangi – most particularly those pertaining to the power of the chiefs and their proprietary rights ...
    2 weeks ago
  • Where Money Comes From
    Most people would say, no doubt, that they have a pretty good idea of what money is. They live with the reality of money every day. It is what is needed to buy the necessities of life and to maintain a decent standard of living. You get money, they would ...
    Bryan GouldBy Bryan Gould
    2 weeks ago
  • Banned by the Green Party leadership: Jill Abigail on women’s rights and trans rights
    The article below was an opinion piece that appeared in the Spring 2019 issue of Te Awa (the NZ Green Party’s newsletter) and on the Greens website.  In keeping with their policy of hostility to women defending women’s right to female-only spaces, Green bureaucrats have since removed the opinion piece.  ...
    RedlineBy Admin
    2 weeks ago
  • The fallacy of the proximity argument.
    Longer term readers may remember my complaining that, as a political scientist, it is burdensome to have non-political scientists wanting to engage me about politics. No layperson would think to approach an astrophysicist and lecture him/her on the finer details of quarks and black holes, but everybody with an opinion ...
    KiwipoliticoBy Pablo
    2 weeks ago
  • Where We Stood: Chris Trotter Replies To Stevan Eldred-Grigg.
    Joining The Fight: Stevan Eldred-Grigg's argument for New Zealand staying out of the Second World War fails not only on the hard-headed grounds of preserving the country’s strategic and economic interests; and not just on the soft-hearted grounds of duty and loyalty to the nation that had given New Zealand ...
    2 weeks ago

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