Peters ready to throw spanner into Labour's capital gains tax plans
By Richard Harman (author)
NZ First Leader Winston Peters is ready to throw a spanner into the works if Labour forms the Government and wants to introduce a capital gains tax.
The possibility that they might became more explicit over the weekend with two interviews with Phil Twyford and Grant Robertson in which both refused to rule out a capital gains tax --- and Robertson went further suggesting the party’s position had changed with the recent leadership change.
But Peters says he is not ready to support any moves Labour might want to make to extend capital gains taxes.
He argues that we already have capital gains taxes --- an argument also offered by the Government because it is possible for the IRD to declare a property or share trader a “trader” and therefore impose an income tax on any gains they make from sales of assets.
But Peters approach to what is now quite obviously a Labour proposal to impose a capital gains tax is to say other things should be done first.
Peters view on this is important because even with its own polling which it made public over the weekend, Labour would need NZ First to form a Government.
And his views also give an insight into how difficult it is going to be for either National or Labour to meet his demands.
Labour’s capital gains tax proposal has been revived with the demise of Leader Andrew Little.
In November 2014, after he won the leadership he said the capital gains tax and the proposal to raise the qualification age of New Zealand superannuation which Labour went into the 2011 and 2014 elections with were reasons people had not voted for the party.
"We will have a review process; we will go through that. I will argue my case in the forums of the party, but my firm view is that we should not be going to the 2017 election with those policies on our slate” he said.
There were however strong voices within the party which supported the capital gains tax.
One of those was its architect, David Parker who has been a strong backer of Jacinda Ardern and who is the author of the water tax policy released a fortnight ago.
Finance spokesperson Grant Robertson arrived at a neat compromise.
Labour would set up a Taxation Review once it got into Government.
Asked on TV3’s “The Nation” on Saturday whether he thought we needed a capital gains tax to get house prices down, Labour’s housing spokesperson Phil Twyford said: “We think comprehensive tax reform is overdue in this country, not only to tilt the playing field away from real estate speculation
Lisa Owen (“The Naiton”) “Last chance – capital gains tax?”
Amy Adams (Housing Minister) : "Answer the question, Phil."
Twyford: “In the first three years, we’re going to do a tax working group that will redesign the entire tax system.”
That hardly sounded like a “no”.
And Robertson himself was more specific on TVOne’s “Q+A” yesterday saying that the party’s position had changed since Andrew Little was no longer leader.
“We will have a working group that will have a look at getting a better balance into our tax system between how we tax assets and how we tax income,” he said.
Peters though is adamant.
“I am not for an extension of the capital gains tax,” he told POLITIK.
"Whilst we have a capital gains tax now it is not even in the first four considerations of why we have such a distorted, overpriced world exceptional market in housing and in some ways land.”
Peters argues that we need to stop foreigners buying land and put a hold on immigration to reduce pressure on the housing market which he says will be much more effective than imposing a capital gains tax.
Labour's problem with a capital gains tax is that it is obviously determined not to confirm that it would be under consideration in its taxation review.
Peters is critical of the review and Labour's plan to provide the details on its water levy policy after the election.
“How many times can you get away with the sort of nonsense,” he said.
Labour Leader Jacinda Ardern was specific about housing when she launched Labour’s campaign yesterday.
“Under Labour, we will remove speculators’ unfair tax advantages.’ she said.
“We’ll stop foreign buyers who have no interest in New Zealand buying existing homes.
“And we’ll just get on and build more houses.”.
Peters would agree with all of those moves but at this stage, he is signalling that a capital gains tax would be a step too far.