NZ: The Politics of the Capital Gains Tax Debate: Stacey Kirk in Stuff

pn287

It might have been Recess week in Wellington last week, but there was still plenty going on, emanating from the halls of Parliament.

And the Government desperately needs to get a grip on the tax convo:
Because it’s in an extremely vulnerable period, where it’s getting hammered on the introduction of a capital gains tax, which at this stage is only a working group recommendation rather than policy. The independent working group has delivered a range of options, but the Government hasn’t decided what it wants to do - that means it doesn’t have a package to sell.


It can’t defend a capital gains tax in case it’s interpreted as policy, too soon. It can’t talk down plans either lest it reassures voters mostly against a tax, that they’re safe - only to sucker punch them at the last minute. That would be a more certain form of political hara-kiri, than taking a capital gains tax to the next election.
Prime Minister Jacinda Ardern and Finance Minister Grant Robertson need to seize the debate, ask for cooler heads to prevail and not over-egg any option either way, lest it gets vetoed at the Cabinet table by Winston Peters. Much easier said than done.


And it’s National the Government needs to get the jump on:
Because you know they won’t let the tax issue go between now and the election. In this intervening period where the Government doesn’t technically have a position, National will not waste the opportunity to stoke fear over a “punitive capital gains tax”. Leader Simon Bridges is already describing it as an “attack on the Kiwi way of life”, both for those who already own investment properties, as well as those who aspire to get ahead.

And let’s face it; it’s not a hard sell for the Nats. Precisely nothing has changed since three weeks out from the last election, Labour threw its entire tax policy out the window and deferred to a working group, because its polling numbers were taking a serious hit over the prospect of a capital gains tax.