The strange case of the missing text from Bridges’ speech

Written By: - Date published: 5:04 pm, November 27th, 2018 - 25 comments
Categories: Media, national, same old national, Simon Bridges, spin, the praiseworthy and the pitiful, twitter, you couldn't make this shit up - Tags:

Yesterday National’s social media team sent out this tweet:

It received a number of tweets and likes and comments.

I thought it was strange.  It said on the face of it that National would repeal the bright line test tax that it imposed in 2015.

So I then checked the text of the speech.  It included this passage:

Core to our values, there will be no new taxes

We will not introduce any new taxes during our first term.

Unlike the current Government which promised during the election not to introduce new taxes yet did so anyway, we will actually deliver on that promise.
Michael Cullen’s Tax Working Group has announced it is putting together two options for a new Capital Gains Tax.

But this will lead to higher rents. Even the Tax Working Group concedes that.

And there will be flow on effects. A Capital Gains Tax will also affect everybody’s KiwiSaver – directly taxing people saving for their retirement.

A Capital Gains Tax would be a tax on hard-working New Zealanders’ retirement funds, the family farm and the family bach.

It is another tax on small business owners and entrepreneurs – people who have worked hard for decades paying tax and employing people, only to get whacked with a new tax when they sell up.

It won’t fix the housing market, but it will increase rents for those who can least afford it the most.

The second sentence of the tweet was in the speech but not the first.

National’s social media is sending out tweets with quotes that do not match the speech notes, nor apparently the policy despite purporting to do so.

And these guys think they are ready to run the country?

25 comments on “The strange case of the missing text from Bridges’ speech”

  1. Matthew 1

    It’s presumptious of them to claim it will affect kiwisaver, family farms, and retirement funds.
    The coalition can choose to only tax certain things, and there’s no evidence it will tax those things.

  2. BM 2

    I thought it was strange. It said on the face of it that National would repeal the bright line test tax that it imposed in 2015.

    Are you implying we already have a CGT tax?

    • Apparently so. Bloody Labour, bringing in taxes before they were even Government.

      From wikipedia:

      A capital gains tax on property speculation was introduced in 1 October 2015. The rate will be the same as the seller’s income tax rate. The new tax will not apply to the family home or death estate or property sold as part of a relationship settlement. The main aim of the new tax was to collect money off property speculation – houses bought and sold within two years will be subject to the new tax. [16]

      As of 2018, the two year threshold was expanded to five years. Houses bought and sold within five years will be subject to a tax that is effectively a capital gains tax, with limitations if it is the main home of the taxpayer.[17]

      • BM 2.1.1

        Thing is this is how it’s always worked, if you’re regularly flipping houses you’ll get taxed because you’re obviously doing it to make money.

        If the mechanism is already in place what’s Cullen wanking on about the need for a CGT?

        • te reo putake 2.1.1.1

          I suspect the argument is that a CGT should be at a normal business tax rate (or at least the GST rate?).

        • Lucy 2.1.1.2

          Only if its declared, the reason for the bright line test was we had so many people not declaring gains when they flicked houses and not enough people working in IRD to police it

          • BM 2.1.1.2.1

            Yep, you’d find it was the “family home”, get some to build it cheap and then live in it while you do all the finishing work, one a year seems to be what people would try and do.

            People who do this for a living tend to be a bit more upfront, so they can claim back expenses and GST.

        • Tricledrown 2.1.1.3

          BM you are what you call others.
          A Capital gains tax on the sale of businesses is the latest news.
          Suprisingly uninformed for a Socold Pro business Troll.
          It would float if Cullen was smart enough to reduce company income tax. If it didn’t it would be a disaster at the polls.

    • Andre 2.2

      We’ve had what’s effectively a capital gains tax for a long time. Any asset purchased with any intention of selling it at some later date at an increased price over the purchase price (no matter how far in the future) has tax due on that capital gain.

      Yes, the actual reality is that almost everyone knows what to say about their purchase intentions in order to defraud the IRD, so it almost never gets paid. But the rules are still on the books.

      https://www.ird.govt.nz/property/property-selling/selling-property.html

      • Andre 2.2.1

        From the IRD link:

        “However, when a property has been bought with the firm intention of resale you’ll have to pay tax on any profit from the sale. The intention to sell does not need to be the main reason for buying the property – it could be one of a number of reasons for buying.”

        Y’know, if I worked at the IRD making decisions about whose affairs need a closer look, anybody shouting that a capital gains tax will cause rents to rise because it reduces returns to landlords would go straight to the top of my list. Because that is clearly announcing that those rental properties were bought with an expectation of selling and realising a capital gain at a future date. That they are also clearly implying they do not expect to pay the tax is also effectively announcing an intention to defraud the IRD.

        • Ed1 2.2.1.1

          This tax used to apply more than it does now – it applied to any funds managed by a professional investor – hence superannuation schemes, insurance companies, unit trusts, mutual funds, and the tax applied to capital gains on all assets – property, shares, and any gains on fixed interest or other assets. For privately owned and owner managed property, whether tax applied following a sale depended on the purpose for which it had been purchased – if it had been purchased to provide an income then the rent was taxable but eventual capital gains not taxable. Contrast that with a small investor who may have invested in a property trust – chances are any capital gains on the sale of a property would have been taxed – an example of one rule for wealthy owners of property investments, another for small investors. I think a lot of that changed for Kiwisaver funds where the income is split between all the investors, and tax paid for each investor using their “tax rate” – and that may still include tax on capital gains for trading in shares and other assets . . .

          It would be good to get a summary from an accountant or other expert in such matters. It would also be interesting to know how much income tax arises from capital gains (offset of course by capital losses) – but the IRD may not keep those statistics.

          But yes we do have a tax on income, and under quite a few normal circumstances that will include income from the gains on sale of assets . . .

    • mickysavage 2.3

      Are you implying we already have a CGT tax?

      No I am stating it. The bright line tax is a CGT. If your building goes up in value and you sell within 2 (then) years of buying it you pay tax on the capital gain.

      • BM 2.3.1

        So why the need for a new CGT? what problem/loophole is Cullen trying to fix?

      • BM 2.3.2

        Or is it more about creating another revenue stream for the government?

        • mickysavage 2.3.2.1

          You are avoiding the basis of the post.

          1. National tweets that Bridges said he will repeal the CGT.
          2. He only said that he would repeal any CGT Labour passed.
          3. The tweet purported to be a quote but was not.
          4. All I can conclude from the tweet is that National intends to repeal the bright line test.

          This is really messy.

          • BM 2.3.2.1.1

            What’s your take on this, agree, disagree?

            As I understand it the Government plans to pass the legislation for its capital gains tax before the election, but to take effect from 1 April 2021. So if the Government is not re-elected then the CGT law will be repealed.

            https://www.kiwiblog.co.nz/2018/11/national_will_abolish_any_cgt.html

            • mickysavage 2.3.2.1.1.1

              If Bridges in the tweet said that he intends to repeal any CGT brought in by Labour then no problem. But he said he will repeal any CGT.

              The basic problem as I see it is the tweet and graphics were based on an earlier version of the speech.

              It was changed but the tweet and graphic was not.

              It is really sloppy. Labour was castigated for less.

  3. Chris T 3

    Seems a bit odd, but one question.

    Where are you getting it is from that speech?

    • mickysavage 3.1

      The speech is from Scoop and has National’s name on it.

      • Chris T 3.1.1

        I’m sure it is

        I am saying how do you know it is where the quote is from?

        Bridges does about 6 radio and TV shows on Mondays

        • mickysavage 3.1.1.1

          Because the second sentence appears word for word in the speech but the first sentence does not. And there are speech marks around the quote. And the graphic says “[w]e will repeal any Capital Gains Tax”.

          The speech is at http://www.scoop.co.nz/stories/PA1811/S00255/speech-simon-bridges-our-priorities-for-nz-families.htm

          • Chris T 3.1.1.1.1

            That is fantastic, but politicians have sound bite phrases they say over and over

            • Andre 3.1.1.1.1.1

              Looks to me like micky’s chain of assumptions and logic about the source is pretty reasonable. If he’s wrong, how about showing us where it actually came from instead of just throwing up a bunch of maybes.

              • Chris T

                He might be right.

                I don’t know

                I just know Soymun does shit loads of interviews on Mondays and it’s obviously the Nat’s “big” policy of the week, so it ain’t like he would’nt have been practicing it all weekend with impact phrases and the same scary slogan. Every politician does it.

                I just prefer to check out all the facts before jumping to conclusions

                And no. I’m not going to trawl through all his shitty interviews from yesterday to find out.

                It would be tedious and I really don’t give that big a shit either way

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