Why New Zealand needs a capital gains tax

Written By: - Date published: 9:16 am, February 27th, 2019 - 249 comments
Categories: capital gains, capitalism, Economy, national, Politics, same old national, Simon Bridges, tax, twitter - Tags:

National has clearly decided to mount a full on attack on the Tax Working Party’s proposed capital gains tax which has been described as an attack on the kiwi way.  And National has, god bless their cotton socks, overreached.  Simon Bridges has sounded like he wants a CGT to apply to the family home because otherwise it would be unfair.

Bridges felt he had to go onto video to try and explain himself. Explaining is losing Simon.

And in a series of own goals he proceeded to be, and the technical term is, owned.


https://twitter.com/nealejones/status/1098411081662230528

I can’t help but think that the manufactured rage from National and capital gains tax opponents is nothing more than unmasked greed. And considering that three quarters of National’s caucus has interests in two or more properties there is a lot hanging on this.

So what do others think about the proposed tax? What about Westpac economist Dominic Stephens?

From Jason Walls at the Herald:

Stephens said the combination of the proposed tax cut and the implementation of the CGT would “lead to higher long-run living standards for New Zealand”.

He said one of the biggest impediments to the New Zealand economy in recent years has been what he calls “skewed investment choices” due to an uneven tax system.

“[The Government] taxes the income earned on investments very heavily, but [it] taxes the capital gain earn on investments hardly at all.”

In other words, people’s paychecks are taxed according to their income level but if someone sells a house for a large profit, they haven’t had to pay tax on that gain.

He also believes the tax will have a beneficial effect on the housing market.

The Tax Working Group’s CGT, Stephens said, would help skew investment away from housing.

“Introducing a CGT should level the investment playing field, leading to more diverse investment choices.”

He said a CGT would reduce what property investors would be willing to pay for a property, which would make home ownership more affordable for regular Kiwis.

This would, however, slow the economy, he added.

His is not the only expert voice in support of a capital gains tax. Matthew Theunissen at Radio New Zealand sought academic comment on CGT systems in Australia, England and Canada:

RNZ spoke to academics from Australia, Canada and the UK. All said it was no longer controversial and had become an accepted part of their taxation systems.

Aussies have been taxed on their capital gains from assets like property, shares and leases since 1985.

University of New South Wales tax professor Chris Evans said the debate that’s raging here at the moment was one Australia resolved long ago.

“It was a political hot potato, no doubt. But people got used to it and it settled down quite quickly,” he said.

Mr Evans, who did some research for New Zealand’s Tax Working Group, said any fair and sustainable tax system needed to include a capital gains tax.

“New Zealand’s an outlier on this, it’s quite surprising. If you look at the 35 countries that are currently in the OECD, New Zealand’s the only one without.”

And, he said, this country had the opportunity to avoid some of the mistakes made by Australia.

“New Zealand has been far more sensible, in the sense that it’s going to treat capital gains just like it treats any other form of income, and so you won’t get that complexity of trying to drive a wedge between what’s a capital gain as opposed to a revenue gain and all those sorts of problems.”

So a capital gains tax will redress inequality, improve the economy and make housing more affordable.  And the downsides are?

249 comments on “Why New Zealand needs a capital gains tax ”

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  1. ianmac 1
    27 February 2019 at 9:23 am

    A balanced report Micky.
    Perhaps it would be kind of you to send a copy to our mate Simon Bridges even though it might make him feel ashamed.

  2. Grant Insley 2
    27 February 2019 at 9:28 am

    Is it also the kiwi way to create personal superannuation schemes in order to diminish personal tax liabilities? Then there’s this…https://www.msn.com/en-nz/news/national/capital-gains-tax-new-zealand-is-joining-the-modern-world-academic/ar-BBU7pJv?ocid=spartandhp

  3. Andre 3
    27 February 2019 at 9:31 am

    Simon is completely right* that it would be unfair for an $8M Auckland family home to be exempt from CGT if other property assets are liable for CGT.

    The appropriate way to fix this is to not exempt “family homes”, but to instead include a rollover provision so that families upgrading to more expensive homes can defer the CGT until their lifestage that they are downsizing and freeing up capital.

    *I cannot believe I just wrote that. But I’ve rechecked and rechecked and I stand by it.

    • left_forward 3.1
      27 February 2019 at 12:02 pm

      If you had said he was ‘partially’ right, it would have been more accurate and palatable.

      This is not a proposal for a rich tax, but a tax on income as a consequence of speculative trading. The family home is a special case because for most people a roof is a constant necessity. It is of course not a necessity to have an home worth $8 million, but such owners are outliers and exceptions to the rule – their existence is not evidence of a flawed CBT proposal.

      I am all for extending this to be a rich tax, if this is what Soimon is recommending!

    • roy cartland 3.2
      27 February 2019 at 4:33 pm

      Of course the family home should be included. If you’re paying tax you’ve already made a profit! I own a home (well, a mortgage) and I’d love to pay tax on the value increase – about as much as I’d like the wealthy to, too.

  4. patricia bremner 4
    27 February 2019 at 9:46 am

    I smiled when the owner of 80 rentals stated “I have paid more tax in a year than most pay in a lifetime.”
    Yes, but he had to earn money to pay that tax. So the earnings were several or more lifetimes worth.? Let’s tell it how it is.
    These people could continue on with no effect to their world until they sell. Paying tax on that sale income has not been factored into their sums, so they feel cheated.
    Often they quote the highest tax 33% on the total value…. very naughty and very misleading. When the date for valuation is set, it is tax on any increase in worth from then until the sale, a hugely different calculation.
    The sale of a valuable home. A curly one. Andre has made a very good suggestion, (see above) which would allow upgrades, but collect the tax when cashing up is happening.

    • KJT 4.1
      27 February 2019 at 10:01 am

      He has made more from State subsidies to landlords, than his likely tax.

      • greywarshark 4.1.1
        27 February 2019 at 10:08 am

        I remember decades ago Brash said that citizens spent too much money on buying a home, maintenance, improvements and so on. He thought it took too much money away from consumer spending and put it into assets, which people would make a profit on when they sold their house. He wanted family homes to be treated as assets providing unrealised profit and wanted them taxed each year on the theoretical calculations of rental income they would have attracted if rented. That would be opportunity cost because the owners resided there.

        The deviousness of this neolib economic regime is that at the same time as the RWs thought this, the politicians said publicly that people don’t save enough. Of course the housing is a type of saving, accumulating a private asset. The politicians actually know if people stop buying and save more, the economy slows, because people’s spending is vital to provide fuel for the economy. So they speak with forked tongues!

        Our wages have been reduced by various measures, which reduce our spending as we have less and less discretionary money after necessities. Income and company tax cuts have reached us in a dribble, and every $ we spend is discounted 15% by govenment through GST. That tax on ordinary people plus high housing costs suck us dry and limit our lives. So it is vital to have income from foreign tourists’ spending to replace our lack of cash in our domestic market.

        But more people coming in demand more accommodation which creates more demand for housing. Poorer NZs are left out of the equation for buying and now renting houses. The government over the decades has done a Mother Hubbard, withdrawing provision of State housing with regular additions, until when the need is great we find the cupboard is bare.

        The tourists and the foreigners buying housing are holding hands to create the barrier to low and even middle income NZs aspiring to buy a house of their own, to be a stable, secure centre for their lives. Stress of numbers and demand forces up house prices with little intervention by government directives and action to plateau the situation, and to quietly talk down the ‘get-rich’ types afflicted by Affluenza. Brash is one of the preachers of the neolib cult and can be compared to a fundamentalist spouting a purist rhetoric.

      • Andre 4.1.2
        27 February 2019 at 10:08 am

        He hasn’t made a damn thing.

        He likely has been paid more from state subsidies than his likely tax.

        • indiana 4.1.2.1
          27 February 2019 at 10:34 am

          Should he openly show you his tax accounts like Andrew Little supposedly did?

          • Sam 4.1.2.1.1
            27 February 2019 at 10:40 am

            Some times I just feel like I need to say something to the slow class to help them along a bit. So a Capital Gains Tax is an opportunity to put some scum property / mortgage brokers out of business i.e. the ones who take less than a few grand as minimum deposits who encourage excessive leverage & slum lord behaviour AND scum educators that do the same & get commission rebates. There should be a minimum that will go out of business.

            • indiana 4.1.2.1.1.1
              27 February 2019 at 11:54 am

              Taxes should never be introduced to put people out of business. Remember JA is meant to be leading a “kinder” and “more caring” government. Her experience from running a small NGO – you know they type of organisation does not rely a self creating revenue stream – will give all small business operators reassurance that a CGT is worthwhile.

              • Sam …
                27 February 2019 at 11:57 am

                Purest form of self creating revenue in the natural world is bullshit. Want to be kind to charlatan educators? Put em out of there misery before pitchforks do.

              • Shadrach …
                27 February 2019 at 1:15 pm

                Mike Hosking asked Jacinda whether she had ever run a business. She said she had worked in a fish and chip shop and run an NGO. I nearly choked on my coffee. MH then asked how many of her cabinet had ever run a business. She had no idea. He read out a long list of names of senior people in JA’s cabinet, and only two had ever been involved in running a business. Hats off to David Parker and one other, whose name escapes me.

                • Barfly …
                  27 February 2019 at 1:47 pm

                  News for you sunshine Government isn’t a business.

                  • Shadrach …
                    27 February 2019 at 2:00 pm

                    No, but there is experience you get from operating a business, or even just working in positions of responsibility the private sector, that is useful. Serving fish and chips is really not a qualification.

                    • Sam …
                      27 February 2019 at 2:37 pm

                      So Bill English lost to a fast food worker. Somethings wrong with your calculus because Bill got thrashed and ended up having a cry in front of his mates.

                    • patricia bremner …
                      27 February 2019 at 3:20 pm

                      Jacinda has a variety of experiences, as well as working in a fish and chip shop, and for all your comments meant to make people believe she is not coping, you fail to make a convincing case.
                      She has represented us with dignity and warmth, she is fair and willing to learn.

                      Now some prefer shallow types who pretend to be “the answer”, but when faced with a difficulty “Can’t recall” or “I am not wearing that hat” or flat out lie. Many of us think business is important but not more important than shelter health education and mental health. There are some business people who know the price of everything and the true value of nothing.

                      Your insistance that our Leader should come from a business background to be successful is felonious.
                      Think of those who are true leaders. Most have done more in influencing people to accept or examine differing points of view and the changes they encourage usually improve lives. Few come from business backgrounds. By that standard Jacinda is succeeding, and her Government made up of three parties is an excellent example of cooperation in trying to make lives better for New Zealanders.

                      Business markers show the country is doing well, in spite of a long campaign saying business was in the doldrums the facts denied it.
                      Now the Government is trying to make the tax system fairer, those who will be affected want everyone to believe they will suffer hardship because of the changes, yet business and economists all want more investment in areas other than housing.
                      The recent tax ideas continue that theme.
                      A Government willing to improve lives should be applauded.

                      Before the knockers start.. I am a card carrying Labour Member.

                    • Shadrach …
                      27 February 2019 at 3:53 pm

                      “So Bill English lost to a fast food worker. ”
                      No. National received considerably more votes than Labour.

                    • Shadrach …
                      27 February 2019 at 3:58 pm

                      “Jacinda has a variety of experiences, as well as working in a fish and chip shop…”
                      Oh sure. Political campaigner. Political researcher. Political policy advisor. President of the International Union of Socialist Youth. Politician. Never, ever, ever had to make a dime.

                      “She has represented us with dignity and warmth, she is fair and willing to learn.”
                      No, she has cocked things up from the very beginning. From her captains call on CGT (embarrassingly reversed) at the last election, to the farce that is Kiwibuild. She has broken multiple promises (eghttps://www.newshub.co.nz/home/politics/2019/02/jacinda-ardern-breaks-the-first-promise-she-made-as-labour-leader.html), in the shortest possible time. The simple fact is she was put into a job she was totally unprepared for by a desperate political organisation.

                      “Your insistance that our Leader should come from a business background to be successful is felonious.”
                      Actually my point was far more nuanced. I spoke about the entire cabinet, which is woefully lacking in business experience. That Jacinda has no business experience other than frying fish doesn’t help.

                    • KJT …
                      27 February 2019 at 5:06 pm

                      On the other hand, National MP’s have a great deal of experience in, destroying the value of businesses, running businesses that were started by tax payers, living off the money from Daddies business, and brown nosing their way to the top in big corporates.

                      There seems to be a real shortage of actual entrepreneurs, and successful tradespeople.

                    • Shadrach …
                      27 February 2019 at 5:09 pm

                      “National MP’s have a great deal of experience in, destroying the value of businesses, running businesses that were started by tax payers, living off the money from Daddies business, and brown nosing their way to the top in big corporates.”

                      You may be right. Do you have any current examples? Here, I’ll even give you the list https://www.national.org.nz/team.

                    • KJT …
                      27 February 2019 at 5:15 pm

                      Given the lack of ability in most private sector management in New Zealand, they are the last people I want in Government.

                      A whole generation of New Zealand managers have no skills in making a business work.

                      Financial finingling, screwing their staff, asset stripping and peddling bullshit is the limit of their abilities.

                      You don’t have to take my word for it. There are endless articles in that rabidly lefty organ, the New Zealand Management magazine about poor quality, overly greedy and incompetent, New Zealand management. The overpriced resume ladders we employ from overseas are no better.

                      Mainzeal and Solid energy are just two recent examples of National MP’s management skills.

                    • Shadrach …
                      27 February 2019 at 5:31 pm

                      I asked for current examples. Yes, yes I know about Jenny Shipley, but if you want to go back to 2002, when she was last an MP, then you may be struggling to support you claim.

                    • Ankerrawshark …
                      27 February 2019 at 5:48 pm

                      Shadrach, shadrach, shadrach ……..ha ha ha. There you go again.

                      Does a successful PM need to have run a business to do a good job? Arh, no. Did John key ever run his own business?… which politician have? Bill English, Norm Kirk? Oh what about Jenny Shipley? Hey I hear Donald trumps run a business. How do you thing heS doing.

                      Stop quoting Mike. He has no credentials whatsoever.

                    • Psycho Milt …
                      27 February 2019 at 5:54 pm

                      No, but there is experience you get from operating a business, or even just working in positions of responsibility the private sector, that is useful.

                      Sure. There’s experience you get from all kinds of things that’s useful. However, only business owners are arrogant enough to think theirs is the only kind that counts.

                    • Sam …
                      27 February 2019 at 6:30 pm

                      Yup, National got the thrash forcing National voters to catch feelings and reasons.

                    • Shadrach …
                      27 February 2019 at 7:18 pm

                      “Does a successful PM need to have run a business to do a good job? ”

                      It helps. But more importantly, they need to have balanced life experience. Making fish and chips and screaming ‘comrades’ isn’t a qualification.

                    • Shadrach …
                      27 February 2019 at 7:19 pm

                      “However, only business owners are arrogant enough to think theirs is the only kind that counts.”
                      No business owner I know thinks that. But most think a broad range of life experiences is helpful.

                    • Sam …
                      27 February 2019 at 7:32 pm

                      John Key was our only real entrepreneur PM and he could only manage 3% growth through fraud and deception once per quarter. Don’t know if you’ve noticed, the economy is kicking along at 4%. Thought I’d just just take the opportunity to ask if you’re feeling ok?

                    • Shadrach …
                      27 February 2019 at 7:39 pm

                      “…the economy is kicking along at 4%. ”
                      https://www.stats.govt.nz/indicators/gross-domestic-product-gdp
                      GDP growth was 3% for the year to 9/18.

                      “Quarterly economic growth slowed more than expected to its lowest level in nearly five years in September, according to the latest Statistics NZ figures. Gross Domestic Product (GDP) rose 0.3% in the three months to September, down from 1.0% in the previous quarter. This is the lowest quarterly growth rate since December 2013.”
                      https://www.interest.co.nz/business/97494/economic-growth-slows-more-expected-gdp-growth-falls-03-september-quarter-while

                      Perhaps you need a lesson in GDP data from the PM – oh wait…

                    • Psycho Milt …
                      27 February 2019 at 9:22 pm

                      John Key was our only real entrepreneur PM…

                      Entrepreneur? He was a corporate banker (not rhyming slang) and currency trader. That’s not an entrepreneur’s arsehole.

                    • Psycho Milt …
                      27 February 2019 at 9:23 pm

                      No business owner I know thinks that.

                      Oh, so all the comments and questions about business experience of our politicians are just disingenuous bullshit? Thanks for clearing that up.

                    • Sam …
                      27 February 2019 at 9:40 pm

                      Shad is correct. Was only 8 billion added to the economy last year.

                      Still, be a could day in hell before I take advice from a property speculator

                    • greywarshark …
                      28 February 2019 at 10:07 am

                      Pathetic Shadrack. Are you a lay preacher for business? You had better have a lay down.

                    • Shadrach …
                      28 February 2019 at 12:34 pm

                      “Oh, so all the comments and questions about business experience of our politicians are just disingenuous bullshit? ”
                      The comment I was responding to was “However, only business owners are arrogant enough to think theirs is the only kind that counts.” The only kind it is not. But it is still valuable. That’s way Jacinda is running backwards from the TWG report – not enough business experience, herself or around her.

                    • Sam …
                      28 February 2019 at 12:51 pm

                      Personally I prefer the Martin Luther King Jr type of leadership. 26 with a PH.D. Was given a leadership role of his local church as the pastor, the youngest around so he didn’t have the hang ups his older pairs did, he was interested in improving the living conditions not merely surviving. That made him extremely adaptable and could chart a clear path to the results and work towards it. And of course business acumen is important I guess.

                • Psycho Milt …
                  27 February 2019 at 1:52 pm

                  Funnily enough, no puffed-up TV presenter ever asked a National politician whether they’d ever run a union, despite those politicians passing no end of workplace legislation. Relevant life experience is in the eye of the beholder I guess, and Hosk’s eyes see very little.

                  • Shadrach …
                    27 February 2019 at 2:01 pm

                    How many unions are there in NZ compared to businesses? How many union members are there in NZ compared to employees of businesses? What is the influence of unions in NZ compared to the influence of businesses? How much tax do unions pay in NZ compared to businesses?

                    • UncookedSelachimorpha …
                      27 February 2019 at 3:19 pm

                      The purpose of unions is to improve the lot of working people. They are generally very effective at that, although restrained by membership and resources.

                      Your suggested comparison with business seems pointless.

                      How much tax do schools pay? Or hospitals? Who cares, that isn’t the point!

                    • Psycho Milt …
                      27 February 2019 at 3:32 pm

                      How many irrelevant questions can Shadrach ask?

                    • Shadrach …
                      27 February 2019 at 3:51 pm

                      “How much tax do schools pay? Or hospitals? Who cares, that isn’t the point!”

                      Apply the other questions I asked to schools or to the health system, then you will understand the broader point I was making.

                    • Psycho Milt …
                      27 February 2019 at 5:51 pm

                      You weren’t making a point, just asking irrelevant questions. In a representative democracy, it makes no sense to demand that only politicians with business experience should make decisions affecting business. If you start down that path, you pass through various stages of absurdity until you eventually get to journos demanding to know from the conservative men opposing gay marriage whether they’ve ever given a blow job or taken it up the arse.

                      It was a stupid, stupid, stupid question for Hosking to ask, but when you think about it that does fit the man.

                    • Shadrach …
                      27 February 2019 at 7:23 pm

                      “You weren’t making a point,…”

                      Yeah, I was. It was about having business experience in a government. You responded about unions, and I asked you some questions intended to show you how little unions contribute compared to business.

                    • te reo putake …
                      27 February 2019 at 9:01 pm

                      Shadrach clearly has no idea about unions. They are not only NZ’s largest democratic organisations, they are all run in an entirely business like way. While they don’t have to make surpluses as other businesses do, it’s worth remembering that the EPMU under Andrew Little’s leadership had cash and assets of over $10 million dollars and an annual income of over a million.

                      And the loss of membership? The EPMU membership base was significantly populated by workers in manufacturing. Remember manufacturing? It was quite popular in NZ before John Key decided we were all better off as service workers.

                    • Psycho Milt …
                      27 February 2019 at 9:20 pm

                      It was about having business experience in a government.

                      You believe it’s a point. It’s actually an unsupported belief held by society’s dimmer bulbs like Hosking, the stupidity of which is easily illustrated by, among other things, pointing out how blowhards never ask about other kinds of experience that would be valuable in governments. Unions is merely one example, but a good one as it’s the direct opposite of the business one peddled by dim bulbs.

                    • Ankerrawshark …
                      27 February 2019 at 9:58 pm

                      Shadrach name one example of a pm who has run their own business……..no, I thought so. Oh but wait what about Donald trump. How do you think he’s going???????

                      Hahaha. Actually no time to respond to you further. More important things to do like washing my hair

                    • Shadrach …
                      27 February 2019 at 10:43 pm

                      “They are not only NZ’s largest democratic organisations, they are all run in an entirely business like way. ”
                      You can’t be serious.

                    • Shadrach …
                      27 February 2019 at 10:47 pm

                      “It’s actually an unsupported belief…”

                      No, business experience is very valuable. NZ is a country of small businesses. Businesses employ most of the working population, pay tax, contribute to society in multiple ways. Unions actually don’t contribute much at all.

                  • KJT …
                    27 February 2019 at 5:16 pm

                    Maybe they should ask, how many National MP’s have ever worked for a living?

                  • indiana …
                    27 February 2019 at 5:31 pm

                    If you look at the membership numbers for the then, EPMU under Andrew Little, it wasn’t a growing number…in fact is was in rapid decline.

                    • Psycho Milt …
                      27 February 2019 at 5:58 pm

                      Have you considered the possibility that the decline in union membership, and accompanying lowering of wages and conditions, may have had something to do with legislative decisions made by people with no experience in representing workers?

                      NB: don’t get me wrong – as far as I’m concerned, the idea that only people with experience in a field should be in governments making decisions about that field is a stupid one fit only for Dunning-Kruger blowhards like Hosking. I’m just using this example to highlight how stupid it is.

                    • Shadrach …
                      27 February 2019 at 7:25 pm

                      “Have you considered the possibility that the decline in union membership, and accompanying lowering of wages and conditions, may have had something to do with legislative decisions made by people with no experience in representing workers?”

                      1. Have you considered the possibility that the decline in business confidence may have something to do with legislative decisions made by people with no experience in business?

                      2. Union membership is a foot vote. Union membership is now voluntary. I have no issue with unions, but members have voted with their feet.

                    • KJT …
                      27 February 2019 at 7:51 pm

                      You have NFI, or prefer to ignore, why union membership dropped.

                      Hint. “Parties for individual freedom” restricted the “individual freedom” of union members to act collectively, when they wished.

                      Which, along with many other freedom restricting laws, makes a nonsense of any National MP’s claim, to a philosophy of “individual freedom”.

                      Where’s the “decline in business confidence”. Small local businesses know that business is always better under left wing Governments.
                      The MT shopfronts multiplied, again, under National.

                      Minimum wage, or lower paying, and tax dodging unethical big business are catching a cold, how sad.
                      They will replaced by more innovative, small business.

                    • Psycho Milt …
                      27 February 2019 at 9:15 pm

                      Have you considered the possibility that the decline in business confidence may have something to do with legislative decisions made by people with no experience in business?

                      1. Have you considered the fact that nobody ever either measures or reports on worker confidence in governments?

                      2. Oh, would that the impact of successive right-wing governments had only been on the “confidence” of NZ’s workers. Our business sector is a crowd of pathetic snowflakes by comparison.

                      Union membership is a foot vote.

                      And nothing, but nothing, employers or governments do can conceivably influence that foot vote, right? After all, employers and governments have such a lengthy history of complete neutrality on the subject of union organising…

                    • Shadrach …
                      28 February 2019 at 12:39 pm

                      “1. Have you considered the fact that nobody ever either measures or reports on worker confidence in governments?”
                      So – go for it if you want.

                      “2. Oh, would that the impact of successive right-wing governments had only been on the “confidence” of NZ’s workers. Our business sector is a crowd of pathetic snowflakes by comparison.”
                      Our business sector are the ones investing, creating jobs, creating wealth, paying taxes. Without them, the country flounders. Perhaps your comments reflect even more how the left doesn’t understand what makes an economy tick.

                    • KJT …
                      28 February 2019 at 10:33 pm

                      Workers create wealth.
                      Consumers create demand.

                      At best an effective business sector co-ordinates and consolidates.

                      They do not “create wealth”

                      Ayne Rand was discredited decades ago.

                    • Shadrach …
                      28 February 2019 at 11:34 pm

                      “At best an effective business sector co-ordinates and consolidates.
                      They do not “create wealth””

                      It is investment in business enterprises that creates the jobs for workers. Where do you think workers get jobs – weetbix boxes?

                    • KJT …
                      1 March 2019 at 9:07 am

                      Demand creates jobs, you idiot.

                      Reading too much Ayn Rand, Eh!

                      I could see you are a follower.

                      Had your eyes shut during recent events. When the “Wealth creating” lords of the universe ” uncreated” trillions, and put their hand out to the workers, to bail them out, again.

                    • Shadrach …
                      1 March 2019 at 9:23 am

                      “Demand creates jobs, you idiot.”
                      Demand generated by jobs generated by businesses. Demand that is met by products and services supplied by businesses. Who then pay tax, and reinvest and create more jobs. And pay taxes that pay for the public works and welfare you no doubt have your hand out for.

                • Gabby …
                  27 February 2019 at 3:59 pm

                  Stacks of gnats have run businesses shadders. Into the ground often.

                  • Shadrach …
                    27 February 2019 at 4:07 pm

                    They may have, I don’t know. But if we’re discussing the qualifications of, eg union leaders, to lead the country, some sunlight on Andrew Little’s involvement in Pike River wouldn’t show him in particularly competent light.

                    • KJT …
                      27 February 2019 at 5:19 pm

                      As the Union had no power whatsoever over Pike River, that is another little piece of diversionary nonsense.

                    • Shadrach …
                      27 February 2019 at 5:33 pm

                      The union had plenty of power. They could have gone on strike for better conditions. But no, Andrew Little said everything was fine.

                    • KJT …
                      27 February 2019 at 7:45 pm

                      It is illegal to go on strike during the term of an employment contract, except under extremely limited conditions.

                      Part of National’s increase in individual “freedom”.

                      One of the reasons why workplace safety went downhill, after the employment contracts Act.

                    • Shadrach …
                      27 February 2019 at 7:56 pm

                      “It is illegal to go on strike during the term of an employment contract, except under extremely limited conditions.”

                      Yes, and H&S reasons are one of those conditions:
                      “Employees can only legally strike or be locked out for health and safety reasons…”
                      https://www.employment.govt.nz/starting-employment/unions-and-bargaining/strikes-and-lockouts/

                    • Drowsy M. Kram …
                      27 February 2019 at 8:02 pm

                      So the Pike River buck stops at Andrew Little? Sheer dreck, as usual.

                      40+ comments on this post – worried about losing something else?

                    • Shadrach …
                      27 February 2019 at 8:32 pm

                      “So the Pike River buck stops at Andrew Little? ”

                      Where did I say that?

                    • Drowsy M. Kram …
                      27 February 2019 at 9:21 pm

                      Shadrach, you and indiana the only ones mentioning Andrew Little in comments on this post, and in those comments you seem to be suggesting that Andrew Little is (partly) responsible for the Pike River tragedy.

                      We all know that politicians are not above political point scoring over National tragedies (Mr Bridges has certainly been getting some ‘stick’ of late), but I’m [not] really surprised that you’d go there…

                      “But if we’re discussing the qualifications of, eg union leaders, to lead the country, some sunlight on Andrew Little’s involvement in Pike River wouldn’t show him in particularly competent light.” – Shadrack @4:07 pm

                      “The union had plenty of power. They could have gone on strike for better conditions. But no, Andrew Little said everything was fine.” – Shadrack @5:33 pm

                    • Shadrach …
                      27 February 2019 at 10:49 pm

                      “…you and indiana the only ones mentioning Andrew Little in comments on this post, and in those comments you seem to be suggesting that Andrew Little is (partly) responsible for the Pike River tragedy.”

                      Andrew Little’s incompetence as the head of EPMU around Pike has been well documented. This piece covers it well https://nzagainstthecurrent.blogspot.com/2014/12/how-andrew-little-failed-pike-river.html.

                    • Drowsy M. Kram …
                      28 February 2019 at 11:51 am

                      I’m not convinced of Andrew Little’s culpability, and am still none the wiser as to why the Pike River tragedy, and Andrew Little’s ‘role‘, are relevant to a post on ‘Why NZ needs a CGT’.

                    • Shadrach …
                      28 February 2019 at 12:37 pm

                      “…and am still none the wiser as to why the Pike River tragedy, and Andrew Little’s ‘role‘, are relevant to a post on ‘Why NZ needs a CGT’.”
                      The discussion was about what sort of experience is needed to run a country.

                    • Drowsy M. Kram …
                      28 February 2019 at 3:34 pm

                      The connection between Andrew Little’s ministerial portfolios (or indeed his career with trade unions) and the CGT scheme presented in the Tax Working Group’s report still isn’t clear. Please join the dots (you may need several pencils).

                      https://thestandard.org.nz/will-andrew-little-be-responsible-if-the-pike-river-mine-gets-hit-by-a-meteor

                    • Shadrach …
                      28 February 2019 at 4:07 pm

                      “The connection between Andrew Little’s ministerial portfolios (or indeed his career with trade unions) and the CGT scheme presented in the Tax Working Group’s report still isn’t clear. Please join the dots (you may need several pencils).”

                      This is the problem when you come into a discussion near it’s end. Back at https://thestandard.org.nz/why-new-zealand-needs-a-capital-gains-tax/#comment-1588282, the issue of business experience was raised in connection with being in government. There is a long thread of comments since, including a divergence into how union experience may or not be helpful (https://thestandard.org.nz/why-new-zealand-needs-a-capital-gains-tax/#comment-1588352, which then segued into Andrew Little (https://thestandard.org.nz/why-new-zealand-needs-a-capital-gains-tax/#comment-1588417).

                      It’s amazing how these conversation go.

                    • Drowsy M. Kram …
                      28 February 2019 at 9:28 pm

                      I do appreciate you efforts to join the dots for me, but honestly I’m none the wiser. Not much of a head for politics!

                      Your first link is to indiana’s (27/2/19) 11:54 am comment (#1588282 @4.1.2.1.1.1), which mentions that Prime Minister Ardern’s “experience from running a small NGO” will reassure small business operators that a CGT is worthwhile. It’s possible that indiana was employing the lowest form of wit when making that comment. I’ve already mentioned that you (Shadrach) and indiana were solely responsible for introducing Andrew Little as a topic of ‘discussion’, which seems a bit calculated.

                      Your second link is to the 1:52 pm comment by Pyscho Milt that asks if any National party MPs have run a union. After a long scroll past several negative comments that characterise your union-bashing reply as ‘pointless’ and ‘irrelevant’, Andrew Little makes his first sub-thread ‘appearence’ in your (3rd and final link) 4:07 pm comment #1588417 [btw, your “But if we’re discussing the qualifications of, eg union leaders, to lead the country” is over-reaching, since no-one had actually been discussing that].

                      indiana chimes in at 5:31 pm (comment #1588437), with another mention of Andrew Little, but the relevance of Andrew Little to the CGT proposals remains ellusive.

                      Once again I applaud your dot-joining efforts, but honestly the connection (between Andrew Little, the EPMU and Pike River on the one hand, the the CGT proposals of the TWG on the other) remains unclear to me.

                    • Shadrach …
                      28 February 2019 at 11:20 pm

                      “…which seems a bit calculated.”

                      Oh I think you’re being too sensitive. Andrew Little came up because the conversation turned to the relevance of union experience in running a country. Andrew Little was a union leader.

                      “…but the relevance of Andrew Little to the CGT proposals remains ellusive.”

                      It’s not that complicated, if you follow the dialogue.

                    • Drowsy M. Kram …
                      1 March 2019 at 11:25 am

                      Alas, still makes no sense to me, but thanks for your efforts. With any luck the rationale for your comments may now be clearer to some.

          • Andre 4.1.2.1.2
            27 February 2019 at 10:42 am

            He can if he wants. Actually, come to think of it, I reckon everyone’s tax returns should be public domain information. Like Norway.

            But what’s that got to do with the difference between getting paid money, and making money or earning money?

          • Psycho Milt 4.1.2.1.3
            27 February 2019 at 1:53 pm

            Should he openly show you his tax accounts like Andrew Little supposedly did?

            Either that, or he should stop blustering about how much tax he’s allegedly paid. One or the other – not both.

          • KJT 4.1.2.1.4
            27 February 2019 at 4:59 pm

            In Norway taxes are public.

            Should be here also

            May shame some of the tax dodgers.

      • Shadrach 4.1.3
        27 February 2019 at 11:02 am

        The subsidies are to tenants, not landlords.

        • mac1 4.1.3.1
          27 February 2019 at 12:37 pm

          And are paid to? The subsidies are based on what? Which is set by?

          Answers.
          1. Landlords
          2. Rent.
          3. Landlords

          I know. I am one, owning one rental.

          That property has increased by 50% in value since purchase some seven years ago. It has had one tenant. The rent is fair and the building is warm and dry. The rental returns on investment are better than putting the money into a bank account.

          I will gladly pay CGT on it when I come to sell. That is fair. It will also be a fraction of the overall gain.

          Then, I will get some of that tax back, in superannuation, health services, winter warmth payments, and all the other benefits of services provided by the state.

        • mpledger 4.1.3.2
          27 February 2019 at 1:09 pm

          ROTFL

          Student allowance boost blamed for rent spikes
          https://www.stuff.co.nz/national/politics/100485600/student-allowance-boost-blamed-for-rent-spikes

          Giving renters more money just makes landlords want to take more if it.

          • Shadrach 4.1.3.2.1
            27 February 2019 at 1:17 pm

            Which is why that was a stupid idea. But the money still went to the tenants. What they pay in rent is a private matter between them and their landlords.

            • UncookedSelachimorpha 4.1.3.2.1.1
              27 February 2019 at 3:21 pm

              …completely ignoring the imbalance of power in that relationship!

              • Shadrach …
                27 February 2019 at 3:52 pm

                As a landlord I can assure you there is plenty of power in the hands of tenants.

                • arkie …
                  27 February 2019 at 5:20 pm

                  Please enlighten us then. What power over the landlord does the tenant have?

                  • Shadrach …
                    27 February 2019 at 5:37 pm

                    Clearly you have never owned a rental property. The relationship is heavily skewed in favour of the tenant. It is very difficult and time consuming to remedy rent arrears, and tenants can cause substantial damage to property that is well beyond the value of the bond.

                    • Ankerrawshark …
                      27 February 2019 at 5:53 pm

                      Cry me a fucking river Shadrach

                    • arkie …
                      27 February 2019 at 6:40 pm

                      No, I’ve only ever rented, and I’m having significant difficulty saving money for a deposit for my own house; I’ve been spending a quarter or more of my income paying for the pleasure of having a roof over my head.

                      Clearly you’ve never rented, you own at least two more houses than I ever have.

                      Also you’ve not given an example of the power the tenant has over the landlord. In both your examples the landlord has the power of the law and their capital over the tenant.

                      For arrears:

                      The tenant is the person (or people) named on the tenancy agreement as tenants. They are legally responsible for paying the rent. Tenants can’t refuse to pay rent while waiting for the landlord to fix something.

                      If the rent is more that 3 weeks in arrears the Landlord can get the tenancy terminated by the tribunal.
                      This is the advice given to tenants:

                      If you’ve missed a payment, or you’re having difficulty paying, contact your landlord immediately to let them know.

                      You should pay whatever you can straight away. A part payment is better than nothing.

                      Don’t avoid or ignore your landlord’s calls or messages. Be honest with them, and they might work with you on a solution. They may let you add an amount to your regular rent until you’ve paid the debt.

                      If you think you’ll have trouble paying in future, think about other options:

                      – check whether your tenancy agreement allows you to have paying boarders/flatmates
                      – get in touch with budgeting services, WINZ, or other agencies to see if support is available
                      – think about whether you can afford to stay in the tenancy, or if you need to explore cheaper options.

                      In the case of significant damage:

                      Landlords can also apply directly to the Tribunal, without serving a 14-day notice to remedy first, if damage caused by the tenant is substantial.

                      The Tenancy Tribunal may order the party who caused the damage to repair it or pay compensation (taking depreciation into consideration). The Tribunal may even order the tenancy to be ended, no matter whether it’s a periodic or fixed-term tenancy.

                      But please point out the power the tenants have over the landlord so we can all be made wiser.

                    • Shadrach …
                      27 February 2019 at 7:16 pm

                      1. Yes, I have rented.
                      2. “In both your examples the landlord has the power of the law and their capital over the tenant.” Well yes, and no. It is one thing to get a judgement, another thing entirely to get payment.

                    • arkie …
                      27 February 2019 at 7:23 pm

                      1. 30 years ago?

                      2. But the landlord still has an asset, the tenant now has no where to live and court-imposed debt.

                      Since you don’t have any other examples, it’s clear that the system favours those with the capital to own houses they don’t live in. And to echo Ankerrawshark: Go cry me a fucking river.

                    • Shadrach …
                      27 February 2019 at 7:32 pm

                      “But the landlord still has an asset, the tenant now has no where to live and court-imposed debt.”
                      They just change their name and move on. And in my case, I have a tenant paying me back $3,000 at $50 per month.

                      “Since you don’t have any other examples…”

                      Oh you want examples? Watch a few of these https://www.tvnz.co.nz/shows/renters.

                    • arkie …
                      27 February 2019 at 7:44 pm

                      So you’re getting your payment, you big baby.

                      You can’t legally change your name to avoid a debt either, especially if the debt is court ordered.

                      I want your example of the power that the tenant has over the landlord. Your ‘example’ of a television series isn’t evidence of that. In fact there’s overwhelming evidence of the opposite in that show:

                      On the face of it, the TVNZ 2’s Renters show seems to exist solely to reinforce every negative stereotype about tenants in the Evil Landlord Handbook.

                      It cynically takes all the worst and most extreme examples of bad tenants and uses them to play into the popular notion that renters are a pack of lazy idiots living in their own filth, refusing to pull themselves up by their bootstraps and never paying rent because they spend all their money on big TVs and bags of drugs. Pity the hard-working, long-suffering property managers hired by landlords to deal with it all.

                      In that respect, yip, it’s quite bad.

                      https://thespinoff.co.nz/tv/24-03-2017/renters-is-new-zealands-exruciating-hilarious-answer-to-the-office/

                      The problem is the gap between the world of Renters and real life. In Renters, the main issue with the property market is tenants who leave shit stains on the toilets and fling food on the blinds. In real life, most tenants are just doing their best to get by, and are often taken advantage of by bad landlords exploiting our spreading housing crisis. Hundreds of children go to hospital each year with preventable respiratory illnesses contracted in their damp, cold rental homes. Property managers like Pru have come under fire recently for propping up an unfairly weighted system, or in the case of Quinovic, openly advertising their ability to squeeze as much profit as possible out of increasingly desperate tenants.

                      https://thespinoff.co.nz/tv/04-10-2018/one-mans-desperate-quest-to-get-pru-from-renters-to-agree-to-rental-reform/

                    • Shadrach …
                      28 February 2019 at 12:49 pm

                      Seriously? Quoting from opinion pieces on the SpinOff?

                      “You can’t legally change your name to avoid a debt either, especially if the debt is court ordered.”

                      No, but you can do it ‘illegally’. Changing you name to avoid debt is actually quite simple, if you are prepared to flout the law. We’ve had more than one tenant do it.

                    • arkie …
                      1 March 2019 at 9:35 am

                      You gave a TV series as your example. An entertainment show.
                      And you object to an review by an entertainment reporter?

                      You think the rental ‘system’ heavily favours tenants because you have had one tenant break the law?
                      And therefore a CGT would be bad?

                      You have no good faith arguments, you’ve admitted your self-interest as a property investor and landlord, and you’re ideologically blinkered.
                      Bow down Shadrach.

                    • Shadrach …
                      1 March 2019 at 11:37 am

                      That TV series documents just some of the problems tenants cause. Watch it some time, you will learn something.

                    • arkie …
                      1 March 2019 at 11:50 am

                      Nah.

                      But thanks for demonstrating what being landlord means to you, even if indirectly.

                    • left_forward …
                      1 March 2019 at 11:59 am

                      Well persevered arkie – thank you – you make excellent points. Shadders won’t let go, he’ll just keep coming back and back and will entirely ignore the points you are making.

                    • RedLogix …
                      1 March 2019 at 1:05 pm

                      Shadrach is quite correct; it’s well understood in the industry that about 10% of tenants will cause a problem, often a quite expensive one.

                      You can reduce this risk somewhat by using professional managers or being very cautious with your tenants, but both of these come at a real cost of some kind. Unfortunately it’s a cost that ultimately gets passed onto the good tenants.

                      In this respect it’s like virtually all other businesses, the good customers finish up subsidising the bad ones; and you’d think the left would have a strong interest in minimising this.

                      One thing I’m sure of, the likes of left-forward or arkie would have NFC as to how to manage this reality.

                    • Shadrach …
                      1 March 2019 at 4:02 pm

                      “You can reduce this risk somewhat by using professional managers or being very cautious with your tenants, but both of these come at a real cost of some kind.”

                      We have used property managers ever since a tenant pulled a knife on us. That same tenant was renting from us under an assumed name (for which he had provided very legitimate looking ID), and left owing us thousands. We never saw a cent of it.

                      The level of vitriol on here towards landlords can only be due to ignorance.

                    • left_forward …
                      1 March 2019 at 4:09 pm

                      What a load of nonsense Shadders.
                      It is you that took the argument beyond this being about the bleeding obvious imbalance of power in the landlord / tenant relationship that this thread began on.
                      Redlogix’s statement that 10% of tenants cause some problems and a subset of them create expenses is hardly sufficient to tilt the balance of power back the other way.
                      This is just a reality, it is not vitriol.
                      I suspect your obsessive defence is more about you trying to resolve your insecurity about being a landlord, acknowledging the scary situation that you describe – perhaps you should give it up and put your money into Kiwisaver or something.

                    • Shadrach …
                      1 March 2019 at 4:11 pm

                      “It is you that took the argument beyond this being about the obvious imbalance of power that this thread began on.”

                      My comment was “The relationship is heavily skewed in favour of the tenant.” That is absolutely the case, and you would likely agree if you had any knowledge of the property market beyond reading socialist weekly.

                    • left_forward …
                      1 March 2019 at 4:23 pm

                      By the way, I am a landlord.

                    • Shadrach …
                      1 March 2019 at 9:02 pm

                      So am I.

                • KJT …
                  27 February 2019 at 5:23 pm

                  Outed yourself, now.

                  Another bludger off rental subsidies.

                  • Shadrach …
                    27 February 2019 at 5:44 pm

                    Never received a cent in rental subsidies.

                    • mac1 …
                      27 February 2019 at 7:09 pm

                      I bet some of your tenants used WINZ accommodation supplementary assistance.

                      Those entitled are aged over 16, NZ citizens, and with limited income and assets. All they need to do is go on line to WINZ or go to their office.

                      WINZ will then assess their eligibility.

                      Shadrach, you however insist on the perverse interpretation that the accommodation supplement being paid in the first instance the renter means that it is not paid to the landlord.when the rent is paid. Even though it is calculated on that premise.

                      All I can suggest for that view is that you desperately do not wish to be associated with being a beneficiary of the State even in a tangential way……….

                    • Shadrach …
                      28 February 2019 at 12:47 pm

                      “I bet some of your tenants used WINZ accommodation supplementary assistance.”
                      Maybe, I don’t know.

                      “…you however insist on the perverse interpretation that the accommodation supplement being paid in the first instance the renter means that it is not paid to the landlord.”
                      Because it isn’t. The tenant can do what they like with it.

                      “Even though it is calculated on that premise.”
                      It isn’t calculated on anything of the sort. I have posted a link to the basis for the calculation.

                    • left_forward …
                      1 March 2019 at 12:03 pm

                      … never paid a cent of capital gains tax.

                    • Shadrach …
                      1 March 2019 at 4:09 pm

                      “… never paid a cent of capital gains tax.”
                      Never met the criteria.

          • Sabine 4.1.3.2.2
            27 February 2019 at 7:41 pm

            so you are saying if no one where to have any money then rents would be for free?

            maybe a rental cap is the way to go. 🙂

    • Iain bremner 4.2
      2 March 2019 at 5:01 pm

      Were a CGT to be enacted, establishing a valuation (Valuation Day) would be a complex process. Corelogic has suggested a desktop valuation, as is done for council valuations. We know how wildly inaccurate those can be. Assigned values are affected for example by nearby property sales. They don’t necessarily factor in capital improvements have been made to the home, and a lower than appropriate valuation could be assigned. Come sale day, the apparent CG would therefore be inaccurate. I have seen virtually identical buildings (excluding the land) 2km apart assigned quite different valuations (for rates purposes) so that, when added to the land value, the CV is in keeping with the particular locality.

      Alternatively, a valuer could be required to visit a property on ‘VDay’. But it’s a reasonable assumption that there aren’t enough valuers to do this.
      Either way I can see the winners being lawyers/property valuers. Challenges to valuations will surely clog the courts.

  5. vto 5
    27 February 2019 at 9:53 am

    So New Zealand is the ONLY country in the 35-member OECD without a capital gains tax??

    It isn’t surprising…

    … dont see why the working people in our family, who are low to very-low wage earners, are paying tax on their money while the wealthy getting workless, lazy, bludging capital appreciation money aren’t,

    Without a capital gains tax there can be no income gains tax.. fuck paying income tax on our meagre working wage when the lazy workless capital owners pay nothing … the whole idea is on another planet… possibly Planet Key has had Doofus Bridges land on it too.

    Stop income tax
    Stop penalising work

    • AB 5.1
      27 February 2019 at 9:59 am

      No no – it’ll be like Venezuela!

    • Shadrach 5.2
      27 February 2019 at 1:10 pm

      That comment should have come with a hyperbole warning. The only thing you missed out was ‘rich pricks’.

      • KJT 5.2.1
        27 February 2019 at 7:59 pm

        He is correct. All your arguments against CGT, apply, in spades to a tax on contributing, actual, work.

        It was Adam Smith who said rentiers, not workers, should pay tax.

        • Shadrach 5.2.1.1
          27 February 2019 at 8:30 pm

          “All your arguments against CGT, apply, in spades to a tax on contributing, actual, work.”

          No, they really don’t. You’ve tried that and failed.

          “It was Adam Smith who said rentiers, not workers, should pay tax.”

          You may not realise it, but landlords do pay tax.

          • KJT 5.2.1.1.1
            27 February 2019 at 9:15 pm

            “No, they really don’t. You’ve tried that and failed”.
            Only in your fantasy world.

            Not the ones I know. They do up the houses, to cut their income, and taxes, expecting to make it all back, tax free, in capital gains, on sale.
            They even boost about how clever they are, evading taxes.

            If you really were paying taxes on all your income, including capital gains, now. Why are you all getting hysterical about capital gains taxes. Why would you care?

            Wouldn’t you be paying, now?

            • Shadrach 5.2.1.1.1.1
              27 February 2019 at 10:44 pm

              “They do up the houses, to cut their income, and taxes, expecting to make it all back, tax free, in capital gains, on sale.”
              Then those gains are taxable now. Foot, meet gun.

              • KJT …
                28 February 2019 at 11:35 am

                As I said above.

                If they are already paying tax. Why all the concern?

                Gun, meet foot.

                • Shadrach …
                  28 February 2019 at 12:44 pm

                  You said:

                  “They do up the houses, to cut their income, and taxes, expecting to make it all back, tax free, in capital gains, on sale.”
                  Those gains are taxable. Did you really not know that?

                  “If they are already paying tax. Why all the concern?”
                  Because your scenario is only one possible. There are others in which investors will be tax twice, which will impact investment decisions.

                  The irony is that in the end it seems increasingly likely this government will chicken out and only impose CGT on residential rental property. Oh how the left will howl then.

                  • KJT …
                    28 February 2019 at 5:47 pm

                    No businessman in history has ever said, “I will refuse a profit because there is a tax on it.

                    You keep insisting on, the obviously creative right wing myth about double tax.

                    Despite all the proof to the contrary.

                    The rest of your comment, simply proves that you cannot read.

                    • Shadrach …
                      28 February 2019 at 11:16 pm

                      “Despite all the proof to the contrary.”
                      You haven’t provided any ‘proof’. You haven’t even mounted a reasoned argument.

                      “No businessman in history has ever said, “I will refuse a profit because there is a tax on it.”
                      I remind you again what you said.

                      “They do up the houses, to cut their income, and taxes, expecting to make it all back, tax free, in capital gains, on sale.”

                      I repeat. If that is their stated intention, then those gains are taxable NOW. And that was your example?

                    • RedLogix …
                      1 March 2019 at 12:37 pm

                      KJT

                      What landlords don’t pay tax … news to me. There are broadly speaking two types of investor; the buy and hold type whose business model is all about a cash flow profit from the rental income; then there is the investor who is typically looking to buy, add value and make a profit on the capital gain.

                      The former will pay tax on the business profit exactly the same as any other business. I can produce audited accounts demonstrating exactly this.

                      The latter type of investor will pay tax on their capital gain IF they fall under the five year bright line test and/or various other criteria that classifies them as a ‘property trader’. For a long period during the 90’s this tax was loosely defined and not well enforced, but in the past decade IRD has been a lot more assiduous in chasing this revenue stream.

                      To be fair there are also many cases where the two models are conflated somewhat. What happens when you sell say 10 of 20 units that you have held for decades, to pay off the remaining mortgage? Or if you are a typical mum and dad investor who has rented a previous family home for a few years and now wish to sell it?

                      Keep in mind that taxing capital gain, when a person is both selling and buying in the same market is always a problem. This is why all CGT’s propose an exemption on the family home; if a family moves from ChCh to Auckland, hitting them with a 15% CGT creates a large shortfall on their next purchase.

                      Equally an investor who wants to sell or consolidate for good business reasons, and is buying in the same market, is equally penalised for no good purpose. If on the other hand they sell and then extract the capital gain as personal drawings the business will pay tax on that beforehand.

                      There is an enormous amount of misinformation and prejudice around this topic. Some left wingers viscerally hate landlords and I accept nothing will ever change that; despite the fact that we provide for the most part decent housing at a price that is actually affordable for most working people.

                      Essentially the trade-off is this; as older people we have naturally accumulated some capital as the decades go by. We did this by being cautious with our money, foregoing expenditure today and paying down our debt to increase our equity. At some point we are able to leverage that equity to provide housing for other people who have yet to reach this stage, or don’t want to..

                      We provide the capital, and assume the not inconsiderable risk, and over time we gain a modest reward. When done professionally it’s a reasonable and fair business, yet the irrational resentment is palpable.

  7. dv 7
    27 February 2019 at 10:12 am

    I like the article in Stuff where they compare smoking to CGT and reckon smokers will pay more tax per year in the next few years!!!

    https://www.stuff.co.nz/business/money/110889322/think-capital-gains-tax-is-expensive-try-smoking

  8. Shadrach 8
    27 February 2019 at 10:52 am

    “Stephens said the combination of the proposed tax cut and the implementation of the CGT would “lead to higher long-run living standards for New Zealand”.”
    There is no hard evidence for that. In fact it is naive in the extreme to believe a single factor could achieve such a thing.

    “[The Government] taxes the income earned on investments very heavily, but [it] taxes the capital gain earn on investments hardly at all.”
    Because the investment capital is paid for out of income that has already been taxed. This is a simple concept.

    “In other words, people’s paychecks are taxed according to their income level but if someone sells a house for a large profit, they haven’t had to pay tax on that gain.”
    People don’t ‘invest’ to get a paycheck, so that is completely erroneous comparison.

    “The Tax Working Group’s CGT, Stephens said, would help skew investment away from housing.”
    They are wrong. The only thing that will ‘skew investment away from housing’ is if the return fell below other investments. A CGT will not necessarily achieve that. There is actually no evidence a CGT will make housing more affordable, because there is no evidence that taxing capital gain will reduce speculative behaviour. In fact the housing market in Auckland has been cooling for the past few years as the result of measures unrelated to a CGT. Also, if a CGT removes landlords from the rental market, it has the potential to increase rents, while not making houses more affordable, in other words a double hit. (Australia has had a CGT for over 20 years, and they have not avoided the property hikes we have seen here).

    “RNZ spoke to academics from Australia, Canada and the UK. All said it was no longer controversial and had become an accepted part of their taxation systems.”
    Seriously? That’s an actual argument for something?

    If these are the “expert voice(s) in support of a capital gains tax”, then it’s little wonder there isn’t much appetite for one.

    • left_forward 8.1
      27 February 2019 at 12:34 pm

      So it is you that is the expert Shadders!

      SuperShads you are so manly, you have so confidently ‘out-knowledged’ these economists and academics who have spent years studying the subject and its broad context – of course, how can we believe experts who have actually studied the subject. Imposters! Thank goodness that you are here to set us all straight.

      I am most impressed. If someone takes the time and makes the effort to understand a phenomenon, whatever it may be, for you this means that we cannot trust what their conclusions might be about it. I understand now – they are just trying to use knowledge and evidence to fool us! This is deep.

      O tax maestro, please share your omnipotence a little further and explain a little of why it is so simple for you to understand and yet so difficult for us mere mortals. Why do you describe the Government as ‘heavily’ taxing income earned, when, if NZers do not evade their responsibilities to pay tax, the highest marginal tax rate they will pay in NZ is only 33% (67th equal in the world).

      And please Professor Shady, is it not tax on the profit on the investment that is being proposed by the Tax Working Party? I don’t understand – how has this gain already been taxed?

      • Shadrach 8.1.1
        27 February 2019 at 12:42 pm

        “…these economists and academics…”

        One Westpac economist, and one RNZ journalist.

        • left_forward 8.1.1.1
          27 February 2019 at 1:04 pm

          … and an undisclosed number of ‘academics from Australia, Canada, and the UK.

          • Shadrach 8.1.1.1.1
            27 February 2019 at 1:08 pm

            …according the journalist. Who names three of them. Would you like a list of academics who oppose a CGT? Shall we start with the three who actually sat on the TWG?

            • left_forward 8.1.1.1.1.1
              27 February 2019 at 1:21 pm

              We don’t need them Shadders, we have you.

            • patricia bremner 8.1.1.1.1.2
              27 February 2019 at 4:25 pm

              So Shadrack, you want to promote the dissenting view of the 3 because they take your position?
              Now, what about the assenting views of the 7 others, and the Chairperson?
              Your dissing of experts in the field is hubris.

              Ignore them as they don’t take your view? Well that is complete bias.

              • Shadrach …
                27 February 2019 at 5:08 pm

                “…you want to promote the dissenting view of the 3 because they take your position?”
                No. Read the context of my comment. I haven’t dissed anybody, I have simply pointed out that there are ‘experts’ on both sides of this discussion. And that an appeal to authority is a logical fallacy.

                • left_forward …
                  27 February 2019 at 5:42 pm

                  And because experts disagree, superShads comes to the rescue – his knowledge on CBT is beyond all belief.

                  • Shadrach …
                    27 February 2019 at 5:45 pm

                    Because experts disagree, we can put forward our own views. Or snipe away from the background.

    • KJT 8.2
      27 February 2019 at 12:35 pm

      Do you really believe that if you repeat nonsense often enough, anyone without a vested interest, will believe it.

      Capital gains tax, is no more double taxation, than taxing interest on savings.

      By your definition, GST, is double taxation.

      • Shadrach 8.2.1
        27 February 2019 at 12:50 pm

        “Capital gains tax, is no more double taxation, than taxing interest on savings.”

        Are you really that stupid?

        1. Interest is the profit earned from an investment.
        2. Interest is NOT profit earned from the investment value increasing.
        3. The profit (interest) is taxed. The increase in the investment value is not taxed, because the income used to establish that investment has already been taxed.
        4. The profit earned from a capital investment, say in a business, is taxed.
        5. The capital gain in the value of the shares in a business is not taxed, because the income used to acquire that capital has already been taxed.
        6. The income streams from both cash investments and business investments are consistent.

        “By your definition, GST, is double taxation.”

        Yes, you are that stupid.

        GST is a tax levied on the supply of a specific good or service. It is not based on any capital appreciation.

        • left_forward 8.2.1.1
          27 February 2019 at 1:20 pm

          Yes KJT, you are not challenging Professor Shady are you?

          Shadrach and his bros were not saved from the burning cauldron for nothing – God has given Shadders direct super knowledge of our sinful tax systems.

          We mortals cannot possibly understand.

        • left_forward 8.2.1.2
          27 February 2019 at 1:55 pm

          I know this will end badly, but I cannot resist –

          Professor Shady, please do not tease us any longer, and answer our questions –

          So, if interest is profit gained from an investment, but not profit gained from an investment that is increasing, and profit is taxed, but the increase in investment is not taxed, and profit earned from business is not taxed, and… doh ! no… we will never understand this, and we are doomed to remain stupid for eternity!

          • Shadrach 8.2.1.2.1
            27 February 2019 at 2:04 pm

            “So, if interest is profit gained from an investment…”
            Earned. Not gained, earned.

            “…but not profit gained from an investment that is increasing…”
            Interest is not profit earned from the increase in an investments value.

            “…and profit is taxed, but the increase in investment is not taxed…”
            The increase in the value of the capital value of the investment is not taxed.

            These are simple concepts.

            • left_forward 8.2.1.2.1.1
              27 February 2019 at 2:24 pm

              Of course, I am sorry prof – interest is profit earned by the sweat of one’s brow and the strain of one’s wrist… sitting in one’s comfy (yet painful) armchair.

              Maestro, if interest is not profit earned in your second case, isn’t profit then a gain made from the increase in an investment?

              And although it maybe simple to you, I still don’t get it sir (being stupid), isn’t the working party recommending that the earned gain in the value of capital value be taxed’?

              • Shadrach …
                27 February 2019 at 2:33 pm

                “…interest is profit earned by the sweat of one’s brow and the strain of one’s wrist… sitting in one’s comfy (yet painful) armchair.”
                There are a multiplicity of investment options. The decision can take as much or as little effort as you choose to apply. But the interest is still earned from the value of an investment. It is not an increase in value of an investment.

                “…if interest is not profit earned in your second case, isn’t profit then a gain made from the increase in an investment?”

                No. Profit is earned from application of the investment to providing goods and/ore services people want to buy.

        • KJT 8.2.1.3
          27 February 2019 at 5:35 pm

          The more you keep repeating this semantic bullshit, the more you convince everyone, that you are a fucking idiot.

          If the amount of money you have, increases, it is income.

          Learn’t that in accounting, 101.

          • Shadrach 8.2.1.3.1
            27 February 2019 at 5:44 pm

            “The more you keep repeating this semantic bullshit…”
            Explaining that interest is paid on the capital, not on an increase in the capital is not semantics. I am genuinely trying to help you understand something you clearly are ignorant about.

            “If the amount of money you have, increases, it is income.”
            Well I could accuse you of semantic bullshit, but I’ll pass. Let me just say that if you want to argue all gains are income, then argue that all gains should be taxed, including the family home. I’m sure you would be happy to do so, but your political masters don’t have the courage of their convictions.

            • KJT 8.2.1.3.1.1
              27 February 2019 at 8:03 pm

              If you had been paying attention, instead of just trying to pretend to be smart, you would have noted I think “family homes” that are used as income earning investments, should be taxed like any other.

              Unfortunately that will attract such a lot of bad faith nonsense, as you have so usefully shown, from the right wing, that it will be politically untenable.

              That will change as right wingers moan about CGT, on their million dollar farm, when a home owner in Auckland escapes tax on a their ten million dollar, mansion.

              I see that Simon Bridges agreed with me. LOL.

              • Shadrach …
                27 February 2019 at 8:31 pm

                “I think “family homes” that are used as income earning investments, should be taxed like any other.”
                Oh I’m sure you do. Good luck with that. But at last you acknowledge the logic of my argument.

                • KJT …
                  27 February 2019 at 8:54 pm

                  Which one. That Government should keep out of the market?
                  Or. Capital gains should not be taxed, because they “are not income”?

                  • Shadrach …
                    27 February 2019 at 9:00 pm

                    That there is a difference between income derived from a business activity, and the increase in value of a capital asset.

                    Taxing the latter is double taxation. Simple.

                    • KJT …
                      27 February 2019 at 9:07 pm

                      Oh. FFS.

                      It still adds to your income, additional, extra income, attracting tax, is not double taxation.

                      In fact we allow tax rebates, from income and company tax, all the time on the opposite. depreciation of capital assets.

                      It is just as reasonable, to tax income from assets appreciating..

                    • Ankerrawshark …
                      27 February 2019 at 10:05 pm

                      Shadrach name one example of a pm who has run their own business……..no, I thought so. Oh but wait what about Donald trump. How do you think he’s going???????

                      Hahaha. Actually no time to respond to you further. More important things to do like washing my hair

                    • Shadrach …
                      27 February 2019 at 10:40 pm

                      “It still adds to your income, additional, extra income, attracting tax, is not double taxation.”

                      Those investments are paid for out of income that has already been taxed. There is no precedent for taxing the increase in capital value – it is a double tax.

                      “It is just as reasonable, to tax income from assets appreciating..”
                      No, it isn’t. It is completely different. I realise you don’t understand why, but that doesn’t make your ignorance any more tolerable.

                    • Shadrach …
                      27 February 2019 at 10:42 pm

                      “Shadrach name one example of a pm who has run their own business……”
                      Irrelevant. I am asking about business experience in government mp’s broadly.

    • mikesh 8.3
      27 February 2019 at 6:18 pm

      Dominick Stephens’ support for capital gains tax is is venal. As a representative of the banking industry he knows full well that such a tax will not affect interest rates or the amounts that investors are willing to borrow. This is because the tax is not levied until a property is sold and the bank concerned is no longer part of the picture. What matters to the investor is the ongoing cost of operating the business or property. Alternatives such as a land tax or a tax on the risk free rate of return, which are levied at regular intervals would limit the amount of revenue available to pay interest, and would therefore have a bigger impact on interest rates etc.

      • KJT 8.3.1
        27 February 2019 at 8:07 pm

        Time for an FTT, then?

        Better still, make banks take part of the risk on property.

        If a loan client goes underwater, they bear part of the loss, for example.

  9. Wayne 9
    27 February 2019 at 10:53 am

    The evidence that a CGT will make housing affordable is pretty slim. Certainly no evidence of that in Australia. And I note the experts have pretty much given up on this argument.

    Which is not surprising. The family home is exempt from CGT. That covers about 65% of all residences. And it is pretty hard for buyers to alter their buying tactics on the basis that the property has previously been a rental, particularly if it is a type of property that is routinely a family owned residence. In fact a CGT provides an incentive to spend more on the family home in the way of improvements, etc.

    It is possible that beach houses in areas where they are predominant might not increase in value as quickly. But I am not sure that would be seen as much of a reason to have a CGT.

    It is also possible that properties that are customarily rentals may be affected. This would cover Francie and Iron brick and tile units built in the 1960s and 1970’s, more commonly known as sausage blocks. Possibly also some of the lower quality recent apartment buildings.

    • Sam 9.1
      27 February 2019 at 11:00 am

      That’s not what the brief to the tax working group said at all. It was to make the tax system fairer, even Andrew little when he was Labour leader was going on about that. So now I’m curious to know how you came about the affordability narritive. Please explain.

      • Shadrach 9.1.1
        27 February 2019 at 11:04 am

        Did you not read the post?

        “So a capital gains tax will redress inequality, improve the economy and make housing more affordable.”

        • Sam 9.1.1.1
          27 February 2019 at 11:07 am

          Just skim read the title. Perhaps the author could do the same with the brief to the tax working group. Quick google search should bring it up at .gov

        • Formerly Ross 9.1.1.2
          27 February 2019 at 12:55 pm

          Shadrach

          You’ve clearly not heard the collective whining from investor groups saying they are going to sell their investment properties if a cgt is introduced. An increase in supply, other things being equal, will no doubt result in more affordable homes in the short term.

          • Shadrach 9.1.1.2.1
            27 February 2019 at 1:06 pm

            I don’t take much notice of the ‘collective whining’ as you call it. Investors will make decisions as they always have done. If property after a CGT is still a better investment than alternatives, they will sit and hold. And even if they want to sell, if prices appear to be dropping, investors who can will simply hold on for another cyclical upturn. This is particularly the case at the moment as rents are rising, making sitting on property attractive.

            • Sam 9.1.1.2.1.1
              27 February 2019 at 1:33 pm

              Who even cam up with the investment property. It’s not an investment, it’s a liability that one day, years later you hope it sells for a higher price. That’s not an investment, it’s a debt narritive pushed by news papers just so they can sell more ads. Owning property is the worst way, or the slowest way to get wealthy.

              • Shadrach …
                27 February 2019 at 1:57 pm

                “It’s not an investment, it’s a liability that one day, years later you hope it sells for a higher price. ”
                Not really. How an investor finances their acquisition is really up to them, but that doesn’t make it any less of an investment. I own rental property. I have financed my properties sensibly, and consider myself to be in the business of long term provision of places for people to live. I run this part of my life as a business, and fully disclose all rental income to the IRD.

                “Owning property is the worst way, or the slowest way to get wealthy.”
                Property is a good investment, if you know what you’re doing. People who take a ‘get rich quick’ attitude can get burnt. I never have, and I never have. Apart from a few dodgy tenants, taking a long term view has worked for me.

                • Sam …
                  27 February 2019 at 2:05 pm

                  Have a look at the top 100 worlds richest. Can be categorised as the first 10 as entrepreneur – invested in themselves. With a smattering of inherited wealth. Thus none of the top guys are property speculators, just the low investment IQ individuals are property speculators ie one of the worst ways to get wealthy.

                  • Shadrach …
                    27 February 2019 at 2:34 pm

                    “Can be categorised as the first 10 as entrepreneur – invested in themselves. ”
                    Yep, worked for them. Doesn’t work for everyone. Property can still be a good way to make decent money.

                    • Sam …
                      27 February 2019 at 2:41 pm

                      Fuck no. And don’t lie to me, be honest now. How many hours do you spend on your property portfolio?

                    • Shadrach …
                      27 February 2019 at 4:05 pm

                      Are you seriously suggesting there isn’t money to be made in property?

                    • Sam …
                      27 February 2019 at 6:35 pm

                      In a property market like what we’ve got now participants shouldn’t be leveraged more than 3 times there annual income give or take. Banks are starting to get strict on credit.

                    • Shadrach …
                      27 February 2019 at 7:16 pm

                      Are you seriously suggesting there isn’t money to be made in property?

                    • Sam …
                      27 February 2019 at 7:28 pm

                      If I was to do property I’d buy some REITs @10% returns. 10% is good if you don’t really know how to invest.

                    • Shadrach …
                      27 February 2019 at 7:33 pm

                      That doesn’t mean there isn’t money to be made in direct ownership.

                    • Sam …
                      27 February 2019 at 7:43 pm

                      Investors who are heavily exposed to the property market spend way more time on managing there portfolio than they’d like to admit. Houses need maintenance, tenancy tribunal, rental agreements, having a house is a part time job, having multiple house is a lot of work. By the time speculators unload some houses, they’ve spent so much time on there investment they’ve earnt a little more time than what they have earnt as plumber. While plumbing is included in the productive part of the GDP, flipping houses is not.

                    • Shadrach …
                      27 February 2019 at 11:00 pm

                      Oh so you’re saying there is no capital gain to be made on property? Geez you should tell that to some others here. The government thinks it’s going to make billions.

                    • Sam …
                      27 February 2019 at 11:11 pm

                      Pretty sure you’re the only one who said all that. I was implying that vendors should suffer for expanding credit and making people leverage more than 10 times there income.

                    • Shadrach …
                      27 February 2019 at 11:14 pm

                      I’m saying there IS money to be made on property. You’re arguing there isn’t. (https://thestandard.org.nz/why-new-zealand-needs-a-capital-gains-tax/#comment-1588508). I have challenged you on that more than once (https://thestandard.org.nz/why-new-zealand-needs-a-capital-gains-tax/#comment-1588413).

                    • Sam …
                      27 February 2019 at 11:22 pm

                      Yeah, well I’m saying it’s not worth the hassle of being locked into really long trades. Black swans can happen at any price, stay humble, nimble, and agile.

                    • Shadrach …
                      28 February 2019 at 8:01 am

                      No one is ‘locked in’. A property owner is free to sell at any time. It’s simply a matter of doing the maths.

                    • Sam …
                      1 March 2019 at 12:47 pm

                      Your sales and property education makes me want to go bankrupt at the casino.

                    • Shadrach …
                      1 March 2019 at 4:03 pm

                      “Your sales and property education makes me want to go bankrupt at the casino.”
                      Your lack of intellect makes that a likely scenario.

    • mickysavage 9.2
      27 February 2019 at 11:20 am

      The evidence that a CGT will make housing affordable is pretty slim.

      Not so sure of that … bright line test was introduced in late 2015.

      There was a marked stablisation of prices after then particularly in Auckland.

      • indiana 9.2.1
        27 February 2019 at 11:46 am

        I think you’ll find the that the bright line test will make it easier for the IRD to identify the intent of why a property was purchased. What evidence do you have that there was a marked stabilisation of prices after it was introduced and even after the bright line was extended from 2 years to 5 years?

      • Wayne 9.2.2
        27 February 2019 at 12:00 pm

        I doubt that the stabilisation of prices was due to the bright line test. There had been such a fast ramp up in prices in Auckland from 2012 to 2015 that they were inevitably going to stabilise. However, the govt had to be seen to do something especially since the Herald was at the time publicising lots of cases of multiple quick sales on properties.

        The bright line test was specifically put in to prove “purpose” of resale under the Income Tax Act. It had been difficult to do without the IRD assembling lots of evidence in statements, emails, etc. The bright line test removed that problem.

        • AB 9.2.2.1
          27 February 2019 at 12:13 pm

          So – extend the bright line test to 50 years, backdate the start point to 2008 and exempt the family home. And don’t call it a CGT.
          Small business dodges a bullet – and we can take back some of the free money stolen from future generations currently being enjoyed by people who have already sold their investment properties during the bubble.
          Win win.

        • AB 9.2.2.2
          27 February 2019 at 12:35 pm

          So keen to soothe away manifest injustices, eh Wayne?
          Because what must always be preserved is what Polanyi called “the freedom to profit from public calamities secretly engineered for private advantage”

        • Formerly Ross 9.2.2.3
          27 February 2019 at 12:48 pm

          Wayne

          But NZ doesn’t simply have a bright line test. There are restrictions on foreigners buying properties here. I’m sure you know what they are.

          “The general policy intent behind the (Overseas Investment Amendment) Bill is to create a housing market with prices shaped by New Zealand-based buyers that will lead to more affordable homes at some times in the property market cycle, and to help redirect offshore capital to more productive uses.“

          https://www.laneneave.co.nz/significant-new-restrictions-overseas-buyers-residential-property/

        • Psycho Milt 9.2.2.4
          27 February 2019 at 3:46 pm

          I doubt that the stabilisation of prices was due to the bright line test.

          Same here. The biggest factor was surely the Chinese government clamping down on overseas property purchases. It was certainly nothing that the NZ government did.

  10. Ad 10
    27 February 2019 at 11:48 am

    The government is going to stay under attack if it continues to accept the framing around the personal wealth effects of tax. It’s the way to lose the debate to special interests, and it’s very loseable in talkback land.
    Within the final report on p. 23 is a little summary of the purposes of tax:
    https://taxworkinggroup.govt.nz/resources/future-tax-final-report
    “There are three main ways in which the tax system supports the wellbeing of New Zealanders:
    A fair and efficient source of revenue. Taxes provide revenue for the Government to fund the public goods and services that underpin our living standards. The tax system thus represents a way in which citizens come together to channel resources for the collective good of society.

    A means of redistribution. Taxes fund the redistribution that allows all New Zealanders, regardless of their market income, to participate fully in society. While much of this redistribution occurs through the transfer system, the progressive nature of income tax means that the tax system also plays a role in reducing inequality.

    A policy instrument to influence behaviours. Taxes can also be used as an instrument to achieve specific policy goals by influencing behaviour. Taxes influence behaviour by changing the price of goods, services or activities; taxes can discourage certain activities and favour others. In this way, taxes can complement – or even replace – traditional policy tools, such as regulation and spending. This may be particularly important in the health and environmental spheres.”

    The government and Labour in particular is going to paint itself into a corner if it keeps harping on about tax being a policy instrument to influence behaviours. That’s because Labour has a strong history of social engineering which pisses a lot of people off.

    So far, this government’s strongest interventions have also been the worst handled. They are simply not giving confidence that they can execute, so despite the high polling numbers they are vulnerable to attack when it comes time to deliver for citizens. And this tax issue is the biggest intervention they have yet come up with.

    If we don’t trust the delivery of MBIE, MSD, DoC, HNZ, MPI, MFE, NZTA, TEC, Stats, and bunches of others, why should government expect faith that IRD can handle this the biggest intervention of all? And for their own professional welfare, no other Minister needs to be let down so badly as others have been.

    The framing that the government has currently used is all about fairness in both weight distribution and upon whether it is easy to use.

    They need to re-frame their messaging away from the personal and market-altering potential of the tax, and more upon what tax is actually for from the point of view of services delivered to make the lives of its people easier. Walk into any public hospital other than Auckland central and you will see what I mean.

    The natural sell for any policy is: what’s in it for me?

    And the answer to that, when it comes to the whole tax package, must be firstly to demonstrate is that this tax is good for the networks, subsidies, and services that we all need. And secondly that a great many citizens will be financially better off. The rest is just cozying up to defeat.

  11. mosa 11
    27 February 2019 at 12:07 pm

    Interesting post Mickey thanks for your work on it.
    Australia has had a C.G T since 1985 and it was passed into law by the then Hawke Labor government and the sky has not fallen in.
    This tax change is being made contentious by the usual privileged class that don’t want to participate in the obligation and responsibility to their country by paying their fair share of tax.
    I will be waiting too see what Winston will be wanting in respect to any law change.
    What we may or may not end up with will depend on N.Z.F and the outcome of the next general election.
    I hope the coalition keeps its nerve and seizes this opportunity to do what is long overdue and the next generation of kiwis will thank them for it.

    • Sam 11.1
      27 February 2019 at 12:16 pm

      It was Paul Keating. The capital gains tax was what started the rift between the too because of Bobs “Labour Friends” wasn’t keen on it, so Paul had to build a new Australian Labor voter base out of Super. Slight quibble I know but if we are pinching policy then these small details make average look competent.

      • Anne 11.1.1
        27 February 2019 at 5:29 pm

        By all means Sam correct minor details. We’ve all been on both sides of the fence. We’ve made the small mistakes and had another correct them, or we’ve been the one doing the correction.

        No need to add remarks calling into question another commenter’s competency over a small memory slip.

        • Sam 11.1.1.1
          27 February 2019 at 6:45 pm

          Based on the fact that I’ll add what ever the hell I like, your comment only makes sense if you are going to copy and past policy from another country, and have the wherewithal to sponsor it through select committee and parliament.

          • Anne 11.1.1.1.1
            27 February 2019 at 7:07 pm

            Based on the fact that I’ll add what ever the hell I like,…

            I never said you couldn’t. It was an observation you could choose to take into consideration – or not. That is your prerogative.

            As for the rest of the comment, I venture to suggest it makes less sense than mine. Nor does it bear much relevance to Mosa’s reasonable initial comment @ 11. All he/she did was make a timeline error – thus attributing something to the wrong Labor PM – which is not hard to do 30 plus years after the fact.

            • Sam 11.1.1.1.1.1
              27 February 2019 at 8:57 pm

              Oh my god, Anne. Take the L. It’s a different suite of tax policy that was designed to sustain Australian health, education, welfare and super at 9% contributions. That’s 3% government contributions, 3%worker contribution, and 3% employee contribution. Through the magic of 10% interest the pool of money is enough to look after all retirees through to 80 years of age. In New Zealand we’ve been able to manage the same through raising the age of retirement, so the pool of retirement money that should be in NZ isn’t there. Only way to fund it is through a levie like an ACC levie and fund it directly instead of through a sovereign wealth fund.

              There’s Australia, and then there’s New Zealand. Based on the evidence, you need glasses.

            • mosa 11.1.1.1.1.2
              27 February 2019 at 10:46 pm

              Hi Anne thanks for your response.
              I had not made an error as Sam had pointed out.
              A CGT was introduced by the then Labor government led by Bob Hawke and enacted into law and Keating was a member of that government.
              That was the point i had made in my blog was that the Aussies had implemented it three decades ago without the world coming to an end.
              The arrogance of some of the people who contribute here never ceases to amaze me.
              For the record i am a guy who just turned 50 today and the term mosa was a family nickname that i have always used.
              That solves that mystery.

              • Sam …
                27 February 2019 at 10:57 pm

                The bills got Keatings name on it.

              • Anne …
                28 February 2019 at 9:55 am

                The arrogance of some of the people who contribute here never ceases to amaze me.

                That is true, but if they have something worthwhile to contribute then I don’t usually mind. This one called ‘Sam’ seems to have an extraordinarily high opinion of himself. 😉

                • Sam …
                  28 February 2019 at 8:27 pm

                  Based on the evidence, Mosa and the one known as Anne has found a shinny thing. Congratulations Anne, you picked it up, pointed at, and waved your arms around to attract attention and gain political favour with your xeno-mate.

      • mosa 11.1.2
        27 February 2019 at 10:36 pm

        My point was that the Hawke Labor government introduced the CGT on the 20th of September 1985 and Paul Keating was a member of that government.
        Bob Hawke was PM at this time and here is the link.

        https://en.wikipedia.org/wiki/Capital_gains_tax_in_Australia

        • Sam 11.1.2.1
          27 February 2019 at 10:51 pm

          Still leaves me wondering what makes mickys post so interesting. Perhaps you could elaborate,

          • mosa 11.1.2.1.1
            27 February 2019 at 11:30 pm

            Mickey included comment from a variety of different commentators who support a CGT which is not the kind of informed opinion we are getting through the MSM.
            That was what i found interesting that there is if you want acknowledge it support for the proposal not just derision.
            Is that clear enough for you.

            • Sam 11.1.2.1.1.1
              27 February 2019 at 11:52 pm

              I agree there are interesting specimens found on the standard. I wonder if those informed opinions you found interesting favoured a fair tax system or some kind of wealth redistribution mechanism.

  12. Shadrach 12
    27 February 2019 at 12:40 pm

    “And are paid to? ”
    That depends. My understanding is most often they are paid to the tenant as a housing supplement to their benefit.

    “The subsidies are based on what?”
    The tenants personal circumstances. (https://www.workandincome.govt.nz/products/a-z-benefits/accommodation-supplement.html#null)

    “Which is set by?”
    The tenants personal circumstances.

    If you thought they were somehow determined by landlords, you were wrong.

    • mac1 12.1
      27 February 2019 at 3:58 pm

      Best you put your reply to a comment under that comment.

      No, Shadrach you are wrong. Back to bed you go!

      The WINZ site says:”
      You may get an Accommodation Supplement if you:
      have accommodation costs
      are aged 16 years or more
      are a New Zealand citizen or permanent resident
      normally live in New Zealand and intend to stay here
      are not paying rent for a social housing property. (Social housing properties are provided by Housing New Zealand and approved community housing providers.)
      It also depends on:
      how much you and your spouse or partner earn
      any money or assets you and your spouse or partner have.”

      The accommodation costs are determined by the landlord setting the rental. The payment is called the Accommodation Supplement for a reason. Its purpose is to help meet the rent, and will be paid to the landlord by the renter using the supplement paid by WINZ for that very purpose. The WINZ amount depends on the renter’s income and assets.

      To argue otherwise is perverse.

      • Ad 12.1.1
        27 February 2019 at 6:07 pm

        “Shadrach … back to bed you go”

        Top rhyming comedy there Reb Tevye

        • mac1 12.1.1.1
          27 February 2019 at 6:26 pm

          Thanks, Ad. I played opposite Tevye in “Fiddler on the Roof” as Lazar Wolf . Tevye sang-
          “The most important men in town would come to fawn on me!
          They would ask me to advise them,
          Like a Solomon the Wise.
          “If you please, Reb Tevye…”
          “Pardon me, Reb Tevye…”
          Posing problems that would cross a rabbi’s eyes!

          And it won’t make one bit of difference if I answer right or wrong.
          When you’re rich, they think you really know!”

          That last line really chimes!

          • Ad 12.1.1.1.1
            27 February 2019 at 7:33 pm

            I played Perchek.

            Pretty much sums me up. (I hope not)

          • cleangreen 12.1.1.1.2
            27 February 2019 at 9:02 pm

            Brilliant there mac1

            ‘Shoody shadrack’ was outdoing Gosman today.

            He/she scored more comments in this string today it was 47 out of 159 comments.

            Phew!.

          • greywarshark 12.1.1.1.3
            28 February 2019 at 8:36 pm

            Like it mac 1.
            I want one big staircase going up and a bigger one coming down
            and one that leads to nowhere just for show!
            Deedle aidle deedle ….

      • Shadrach 12.1.2
        27 February 2019 at 10:57 pm

        “The accommodation costs are determined by the landlord setting the rental. ”
        You are being slippery. You didn’t ask about the accommodation costs, you asked about the subsidy.

        Here is what the WINZ site says under the correct section (‘How Much Do You Get”):

        “How much you will get on the Accommodation Supplement will depend on:
        your income, your assets, your accommodation costs, your family circumstances,
        where you live.”

        https://www.workandincome.govt.nz/products/a-z-benefits/accommodation-supplement.html#null

        All of those circumstances relate to the tenant, not the landlord.

        (PS, if you are going to quote from a web source, reference the source).

      • Shadrach 12.1.3
        27 February 2019 at 11:12 pm

        Mac1

        At https://thestandard.org.nz/why-new-zealand-needs-a-capital-gains-tax/#comment-1588307, you wrote this:

        “And are paid to? The subsidies are based on what? Which is set by?
        Answers.
        1. Landlords
        2. Rent.
        3. Landlords”

        You were wrong on all three. The actual answers are as I gave originally, which are:

        1. The tenant. (You admit that above).
        2. The tenants circumstances (https://www.workandincome.govt.nz/products/a-z-benefits/accommodation-supplement.html#null, and your own comment above “The WINZ amount depends on the renter’s income and assets).
        3. The landlord does not determine the tenants circumstances.

        You really need to get your shit straight.

  13. greywarshark 13
    27 February 2019 at 12:52 pm

    CGT rates for other places.

    A CGT rate of 33 percent is relative to some New Zealand allies, such as the UK, which charges a CGT at the rate of 28 percent, lower than that of France which charges 36.2 percent.

    But 33 percent is significantly higher than the likes of Iceland which charges a CGT at just 22 percent, alongside Spain, which charges a CGT of up to 23 percent.

    The country with the highest CGT rate is Denmark, where the maximum tax rate is set at 42 percent – well above the proposed 33 percent for New Zealand.

    PM Ardern is very animated discussing politics.

    https://www.newshub.co.nz/home/politics/2019/02/capital-gains-tax-proposal-how-it-compares-to-the-rest-of-the-world.html

    Chris Trotter is concerned about Labour not putting people off when it has its first chance for a decade to do something for NZ.
    https://bowalleyroad.blogspot.com/2019/02/just-like-rogernomics-capital-gains-tax.html

    And further:
    https://bowalleyroad.blogspot.com/2019/02/dying-in-ditch-for-capital-gains-tax.html

    …In fact, if we think about them, those terms-of-reference were pretty damn lame. The Working Group was not permitted to consider increasing income tax on the very wealthy. They were prohibited from investigating a land tax, or recommending the re-introduction of inheritance tax. Even worse, it was soon made clear by Michael Cullen’s protégé, and Finance Minister, Mr Grant (Budget Responsibility Rules) Robertson, that any revenue raised from a “broad-based” CGT would have to be offset elsewhere in the fiscal system.

    So much for the fond hopes of misguided progressives that the additional billions raised by a CGT would be used to fund desperately needed increases in social expenditure.

    Nope. Labour and the Greens were having none of that. All they wanted was a CGT. Indeed, so badly did the Greens want it that their male co-leader, James Shaw, recently declared that they didn’t deserve to be re-elected if a CGT was not delivered….

    But a CGT is, apparently, deserving of the ultimate sacrifice. Even if it means that all hope of making progress on the issues ordinary Labour and Green voters really do care about will be lost. Even though it will allow the Right to come storming back to power on populist promises of saving the family batch and making it possible, once again, for hard-working Kiwis to cash-in their dreams.

    (My comment. In actuality it will be a rerun of the elevated mood Labour was in when it through out us babies, and ushered in neolib and free markets. In a desire for purity, ‘untouched by human hands’, they left the public picnic to be prepared and served by gorillas. (That was a joke I saw in Punch.) Now they are off again, giving the country a dose of medicine for its own good. But will the medics catch a cold and die, in the process.
    I think Chris has a point. We should look again at the known mood of NZs, and beware. Perhaps bring in a 15% GST type – it is just a transaction after all – explanation.)

    • mikesh 13.1
      28 February 2019 at 10:51 pm

      I think the TWG is proposing that a CGT be taxed at the payer’s marginal rate. For someone whose marginal rate is 17.5% the CGT rate would be that.

  14. vto 14
    27 February 2019 at 3:40 pm

    If a CGT is an attack on the “kiwi way of life”…

    then what does that say about us?

    That we like to pay no tax?
    That we like to make a buck the lazy way, by asset value appreciation?
    That we would prefer to tax the workers instead?

    I dont think that is the kiwi way
    I think that is the National Party way

    which it is of course, as the decades show

  15. Sanctuary 15
    27 February 2019 at 3:49 pm

    Labour won’t introduce a CGT. They are a) too scared to and b) fucking useless new Labour do nothings. They are happy to do the wishy washy middle class Liberal thing and use the state to subsidise INCOME via working for families and the like. But when it comes to redistributing WEALTH via the likes of a CGT they’re a bunch of lily livered cowards.

    • patricia bremner 15.1
      27 February 2019 at 4:50 pm

      Sanctuary, what makes you say that? NZ First have to change their position to bring this in. Labour have always favoured it, but do not have the numbers to get it through.
      Winston has started his own inquiry which indicates he is at least considering aspects of this tax, rather than giving a flat no.
      James Shaw is in favour of it, and Jacinda is trying to get consensus. That is hardly cowardly.
      Any Government has to have the permission of the voters. It is not a dictatorship.

    • Peter 15.2
      27 February 2019 at 5:52 pm

      If they won’t do anything do you reckon that’s because they’re scared of the political backlash from f’wits who hysterically spread fear and poison?

      You know, f’wits who proclaim they want bold leadership but as soon as someone says they’re going to do something, wet their nappies and appeal to those with the same limited intellect and self-centredness as themselves?

    • Ad 15.3
      27 February 2019 at 7:32 pm

      Inhale into paper bag Sanctuary.

      They haven’t made a policy position yet.

  16. Jackel 16
    27 February 2019 at 5:32 pm

    The Jackel’s understanding, please feel free to correct. A 33 percent capital gains tax is considered too high because along with a 28 percent company tax you are taxed on the profits or yield depending and their capital gain. As these and capital gain tend to move together it is considered a double tax but more like two half taxes. This would make these taxes taken together among the highest in the world.

    A capital gains tax makes the tax system fairer but set at a lower rate than 33 percent. It is fairer because this type of income is no longer tax free which would be a distortion of the tax system.

    There other countries without capital gains taxes.

  17. BM 17
    27 February 2019 at 6:19 pm

    Does the current Labour government expect property prices to keep going up?

    • vto 17.1
      27 February 2019 at 6:26 pm

      It is better for everyone if capital values are low.

      High capital values only help banks..
      .. ever wondered why those ‘bank economists’ always call for ‘growth’?

      Imagine how much better off you would be if your home cost $100,000 instead of $500,000..

      • BM 17.1.1
        27 February 2019 at 6:36 pm

        Yeah, which is making me wonder what this government is doing, they seem to be all over the place.

        I thought Kiwibuild was all about pushing down the price of housing yet at the same time the government is willing to die in a ditch over a CGT, if Kiwibuild is successful there won’t be any capital gains if anything prices will be dropping so a CGT is pointless?

        Facts are we are well and truly at the peak of the residential property bubble and the current government seem to be doing their best to stick multiple needles in it.

        What’s the purpose of a CGT at this stage of the market cycle?

        • Psycho Milt 17.1.1.1
          27 February 2019 at 6:44 pm

          There are two reasons:

          1. Property values especially in Auckland are still way too high.

          2. It’s a matter of fairness.

          Both of those reasons seem rational enough to me.

          • BM 17.1.1.1.1
            27 February 2019 at 6:55 pm

            If prices fall or stay flat a CGT will raise zip taxes, if anything the government coffers will take a big hit because Ardern and Labour are trying to soften everyone up with a tax cut in exchange for a CGT.

            A CGT would have been great 15 years ago, currently, it seems pointless and rather self-destructive for a new government.

            A better bet would be to just flag the CGT bullshit and just heavily enforce the current bright line point.

            • Psycho Milt 17.1.1.1.1.1
              27 February 2019 at 7:10 pm

              Government isn’t about “What will make us money right now?”

            • KJT 17.1.1.1.1.2
              27 February 2019 at 9:39 pm

              Looking ahead, the current trend of more and more of the wealth income being from capital gains, is going to continue, regardless of house prices.

              A broad tax base cannot continue to tax, mostly, wage and salary earners.

            • greywarshark 17.1.1.1.1.3
              28 February 2019 at 8:41 pm

              I was talking to a Turkish ex-financial manager and he commented on how people can come here from overseas, buy, hold for a while, sell and pay no tax. It seemed a naive thing for a country. Haven’t most countries that don’t think of themselves as basket cases got something similar to CGT?

      • Nic the NZer 17.1.2
        27 February 2019 at 8:39 pm

        This is too simplistic by half. Increases in property prices generate more investment and this equates to more income for sellers as well as more debt to buyers. So the benefits don’t solely acrue to bankers but also to the beneficiaries who are kept employed by the additional economic turnover.

        A fall in this would not be at all a concern if the government showed a clear commitment to maintaining overall economic activity in preference to allowing falls in employment. From what i have observed, unfortunately, the present government will attempt to maintain running a surplus before overcoming a recession. This seems to be supported by its budget responsibility agreements and commitment to a reducing public sector as a percentage of GDP.

        • vto 17.1.2.1
          28 February 2019 at 7:21 am

          Wrong. The momentum behind the activity in your scenario is solely provided by bank debt, and that is poorly …

          so very poorly that it can only end in total collapse

          it is a claytons economy

          there is more debt in the world than there is money to repay it – ever thought about that ? And the consequences? This is a very difficult concept to get into the heads of those caught in our current ferris wheel doom of debt going around and around buying the same assets off the same people paying more and more each time for nothing in return but more debt debt debt

          • Nic the NZer 17.1.2.1.1
            1 March 2019 at 8:34 pm

            Absolutely, economies which grow largely on the basis of property bubbles do tend to end in a bust when the bubble collapses, eventually. That doesn’t negate the fact that these activities generate somewhat self perpetuating economic activity.

            I have thought long and hard about the consequences of interest payments not being created along with the debts they service. Eventually (and assisted by Steve Keen) I understood that this does not actually cause a problem and believing it to can typically be attributed to a stock-flow error in understanding (e.g failing to understand that interest payments and debt repayments typically turn over and the same money can therefore be used to meet the repeating payments as they recur). Note here stock refers to the debt/money and its flow is the repeated payments made with that stock.

    • Sabine 17.2
      27 February 2019 at 7:46 pm

      yes, and anyone in their right mind does, simply because they do.

  18. Marcus Morris 18
    27 February 2019 at 10:18 pm

    I have come into this debate very late and there is too much to read to get the drift of every comment but I did follow Shadrach’s earlier comments on qualifications. Did he, or has someone else mentioned the “plight” of former PM Dame Jenny Shipley and her ability to mismanage a major company. Then of course there was the sad affair of Sir Doug Graham (a tory I actually admired during his time in Government) and his part in the downfall of a major finance company. In both cases innocent parties have let millions of dollars. I tend to agree with Audrey Young. This a massive change to our tax system that is being touted and progress needs to be cautious. Cullen and co, all experts in the field of taxation have put forward the “ideal” but politics is the art of the possible. Property speculation, and its (perhaps) unintended consequences can be attributed to Bob Jones and his practice of mortgage gearing as preached back in the late seventies.

  19. Incognito 19
    27 February 2019 at 10:19 pm

    All this brouhaha is about folks who are more than happy to collect capital gains but vehemently object to paying a minor portion of that as tax. Selfish, self-centred, myopic, self-entitled, unfair, and greedy.

    CGT=Correcting Greed Tax, plain and simple.

    • indiana 19.1
      28 February 2019 at 1:07 pm

      Are you suggesting that the introduction of a tax should be purely based on addressing greed? I’m trying to understand your logic. Is it “greedy” to own an asset irrespective of its value? Knowledge is an asset, so as you go through the education system and obtain a capital gain in knowledge, you should be taxed more each year?

      • Incognito 19.1.1
        28 February 2019 at 7:37 pm

        Are you suggesting that the introduction of a tax should be purely based on addressing greed?

        No, that’s not at all what I was suggesting; maybe you’d like to re-read my comment.

        Knowledge is an asset, so as you go through the education system and obtain a capital gain in knowledge, you should be taxed more each year?

        I see knowledge more as a resource than as an asset or commodity, if you like. Depends on how it’s ‘used’. The beauty of knowledge is that it becomes more valuable the more it gets shared. A very unusual asset indeed!

        Given that education is heavily subsidised by the taxpayers it’s logical and fair that those who stand to benefit most of this taxpayer-subsidised education pay (back) more tax. Coincidentally, the higher the qualifications and the more knowledge one has gained correlates strongly with higher pay and thus more tax paid each year. You were saying?

  20. vto 20
    28 February 2019 at 7:25 am

    I need to repeat:

    If there is to be no capital gains tax then neither shall there be any income gains tax

    Stop penalising work
    Capital appreciation isn’t even work
    Encourage work

    No more income gains tax

    • greywarshark 20.1
      28 February 2019 at 10:14 am

      vto
      I like that word appreciation – it has a number of meanings.
      Statement for a poster?!

      Capital Appreciation – is not WORK.
      WORK!! – Needs Appreciation!!
      (WORK maintains and builds the Nation)

      Another –
      WORK – Is a good 4 Letter Word.

      Or something similar.

  21. SPC 21
    1 March 2019 at 1:45 pm

    I know my reaction to this government not moving as far as it can on CGT.

    It is to continue to support Greens but resignation that Labour has not much more to offer than National, and support a nuetral position on future coalitions.

    It’s sad, but the centre of this country would more readily accept a National-Green coalition than a Labour led one. And if Labour and NZF are intent on being centrists, Greens then have nothing to lose.

    The best time to do this is at the end of the current government, and gain the environment wins NZF has blocked.

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