Both sides of the political spectrum will draw some comfort from the recent OECD report on our economy, but overall the report is much better aligned with Labour / Green policy. As the 3 News summary puts it:
An OECD report on New Zealand supports key elements of the Labour and Green parties’ policies for making the economy grow faster and distribute wealth more fairly.
Its two-yearly review of the economy recommends a capital gains tax, permanent deposit insurance for banks that are “too big to fail” and raising the age of government pension entitlement, all of which are key Opposition party policies.
However, it also says “policies are generally on the right track”, with the government seeking to reduce its spending and public debt as a proportion of the economy, and appropriate monetary policy despite the New Zealand dollar being more than 10 to 20 percent over-valued. …
It also found “income inequality is higher than the OECD average” and that “the system of taxes and transfers reduces inequality less than in most OECD countries”, leading the OECD to recommend New Zealand adopt a capital gains tax.
Key has already painted himself into a corner on Superannuation, and is also refusing to budge on capital gains tax – now recommended by the OECD, the IMF, the Reserve Bank, Labour and The Greens. The Dom Post sums up:
OECD call for capital gains tax
New Zealand should bring in a capital gains tax on property, raise the pension age in line with an ageing population and target Working for Families payments more tightly on the working poor, according to the OECD.
The lack of a capital gains tax exacerbates income inequality in New Zealand because much of the income at top levels was in the form of capital gains, the Organisation for Economic Co-operation and Development said.
The lack of a capital gains tax also reinforced the bias toward “speculative housing investment and undermines housing affordability”, the OECD said in a report made public today.
But the Government immediately ruled out a comprehensive capital gains tax on all assets, including the family home.
National is focused on only one goal, reducing the government deficit, irrespective of the damage that it does in achieving it. The misguided politics of austerity has seen the tradable sector languishing and another damaging property boom beginning. In short National has completely failed to “rebalance” the economy. As long as it keeps ideological blinkers on its continued failure is guaranteed. Time for a change.