Labour says won't introduce Capital Gains Tax in first term; shelves NZ Power plan; Twyford eyes easier rules for medium density housing; targeted rates linked to Council bonds for infractructure

Labour says won't introduce Capital Gains Tax in first term; shelves NZ Power plan; Twyford eyes easier rules for medium density housing; targeted rates linked to Council bonds for infractructure

By Bernard Hickey

Labour Leader Andrew Little has formally begun clearing out some of the policies he thinks pushed his party's vote down to record lows last year.

The unpopular policies, which Little signalled he would ditch when campaigning for the Labour leadership in October last year, included a Capital Gains Tax, a delay in the retirement age and a partial nationalisation of the electricity industry.

Little said Labour would not introduce a Capital Gains Tax in its first term and that its New Zealand Power Plan to introduce a Government-owned wholesale buyer of power had been shelved. He also told reporters Labour would not campaign again to extend the retirement age gradually to 67.

Little was speaking around the fringes of Labour's annual conference in Palmerston North, its first since its vote in the September 2014 General election fell to its lowest levels since the 1920s.

"We won’t introduce it (CGT) in our first term, and we won’t introduce any change that significant to the tax system, any material change to the tax system, without going to the people first and getting a mandate to do so," Little told The Nation on the fringes of the conference.

Little said his advice to the conference was the New Zealand Power Plan, which Labour proposed jointly at the last election with the Green Party, was too complex and should be put on hold.

"We want to reduce power prices, and let’s look at the best way of doing that and doing it in a way that we can explain to New Zealanders," he said.

Elsewhere, Finance Spokesman Grant Robertson also said Labour was no longer committed to its 2014 election policy of having a Variable Savings Rate linked to Monetary Pollcy.

"I acknowledge it is actually another complicated policy, and I want to simplify down our monetary policy to be focused in on how we develop jobs, how we make sure work’s at the centre of the economy," Robertson told The Nation.

Targeted rates for Council bonds

Elsewhere, Labour Housing Spokesman Phil Twyford said a Labour Government would free up rules on housing density and height controls to make it easier to build medium-density housing, and therefore increase housing supply to improve housing affordability.

He also announced Labour would change the way infrastructure was funded for new housing developments.

“Our new policy will see infrastructure funded by local government bonds, paid off over the lifetime of the asset through a targeted rate on the properties in the new development," Twyford said.

'Super dole and driver's licenses for school leavers'

Also, Robertson said Labour's goal was to reduce unemployment below 4% by the end of its first term in Government.

He also outlined Labour's thinking on policies to emerge from its ongoing Future of Work Commission, including the potential for a higher 'super-dole' to allow job-seekers to retrain between careers and enhanced education so school-leavers have the skills for new jobs. He suggested ensuring all school leavers have a driver's license and be taught computer coding in the early school years. He referred to an NZIER report suggesting 46% of New Zealand jobs were at risk of automation within two decades.

"We urgently need to ensure that young people are equipped with the skills and knowledge to thrive in a rapidly changing world," Robertson said in a speech to the conference.

"Information is now so readily available to us, the real focus of education, and indeed what employers are telling us they want are the soft skills- collaboration, problem solving and critical thinking. But employers also want school leavers to have the basics well covered - a driver’s license, digital and financial literacy, entrepreneurial skills and a sense of citizenship and civics," he said.

Later in an interview for The Nation, Robertson referred to a type of 'flexicurity' scheme similar to that used in Denmark where someone who is unemployed immediately gets a higher benefit and goes straight into retraining.

"This is commonplace in countries like Denmark, and as we go into a future of work where we hear that 45% of jobs in the New Zealand economy might be gone in 10 to 15 years, we need a policy that gives people the chance to get the new skills they need for the jobs of the future and have income security while that happens," Robertson said.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Where will the oil/petrol come from for the cars? ie why is a driver licence "essential"? 20 years from now it wont be.

On the D/L one - it might not be in 20 years but that isn't going to help next year's school leaver who doesn't have one. I think driver's ed should be a part of the secondary curriculum (as it was for me when I grew up in the US). So I got all the learning/training given to me for free (via attendance at secondary) and all I needed to pay for was the road test (which I passed first time round - as did the majority of teenagers). There was also just one licence - a full licence.

I've worked a bit with young people here trying to get them off ridiculous fines and penalties on fines and penalties on top of fines for breach of licence conditions. The problem is many need to drive to work on a learners or a restricted and they just can't save the money needed to sit the next step up licence. It's a ludicrous situation. I even worked with one under 20 person, who had a stack of unpaid fines - he was a car groomer and had to start work at 5am. As his vehicle was (and looked like) an old bomb - he was in my assessment unfairly targeted by local police - hence the fines racked up. So, he got rid of the car and bought a bicycle. At 5am one mid-winter morning, he was stopped for not wearing a helmet - and fined.

GIVE KIDS A BREAK - GIVEN THEM A FULL LICENCE - FREE OF CHARGE.

It will make a huge difference to their lives.

Good comment and I agree short term, especially in NZ. However what I expect from a Govn is a 20~30 year view otherwise you get to the point when its staring you in the face you cannot avoid the severe pain.

The fines would not rack up if he wasnt breaking the law.

I like the law. Am not a fan of anarchy!
Before free licences, how about more realistic speed limits that reflect the capabilities of modern cars?

While not in thread, nope, uses more petrol, think its 11% more from 90kmh to 100 and 14% more from 100kmh to 110kmh.

I'd bet you $10 that my car uses exactly the same amount of petrol traveling at 100km/h as it does at 90km/h. I think you might be referring to studies done on old cars that used combustion engines?

EV or whatever stop being a twit and be realistic.

--edit---

A large part of the base of cars bought/owned right now have 10 to 15 years of life and cant be replaced.

You like many others make the common mistake of simply using the drag equation and forgetting that cars have gears, lock up torque converters and engine torque curves that are not straight lines.

Virtually all vehicles have designed in sweet spots that optimise the above to deliver maximum fuel efficiency at particular cruise speeds for given loads, altitudes, gradients, fuel grade etc.

The net effect will be that most vehicles will have optimal fuel efficiencies that will be not always be a function of reducing speed and that many will be slightly more efficient at say 110 Km/hr than at 100.

Many modern vehicles today display actual consumption on a screen and will confirm this.

This optimisation has been known for many years - e.g. UK built Triumphs had an electric overdrive to improve fuel efficiency back in the 1960's and yes - delivered improved mileage at slight higher speeds.

But even my 1999 car has electronics that learn my driving style and adjusts its sweet spot accordingly.

Wind resistance becomes significant at 50kph, and increases exponentially, and therefore energy/fuel requirements increase also
Some cars (like mine) dont get in to top gear till 80 kph, so fuel consumption may be better at 80kph vs 75 due to reduced engine RPM, but I'd like to see facts and figures rather than your wishful thinking(you try to validate your need for speed)
With the road toll as it is I don't think we need more speed.We need a greater emphasis on being able to stop within the clear distance ahead, and maintaining decent following distances.

Unfortunately realistic speed limits wouldn't reflect the capabilities of modern drivers.

Make the driving test more comprehensive and increase the speed limits? Perhaps ban human drivers?

Did you work for courts in a past life? LOL. I nearly got thrown out of the cashier/reception area by security in one of them once.

The mistake associated with this particular penalty fee added to a particular fine was theirs (the courts). They had got behind in admin/processing and so a matter of the unpaid fine had proceeded to court, when it should not have as the letter requesting a review of the fine was with them well in advance of the date to respond period. They admitted their processing problem (while I was standing there they found it amongst the "to-do" file in a back room)!

But the nice woman who found it said sorry - but there was no way she could reverse a penalty fee from the amount now due because the court had applied it - and given it had been applied in a court of law, we would have to pay the full amount due.

So I asked for her supervisor. Who said the same thing. So I asked for her supervisor. Who said the same thing and as it was a small provincial courthouse - she was the top dog (i.e., duty manager). So I asked what we should do to get the penalty reversed. The answer .... write a letter!

I lost the plot. Headed to the nearest police station and made them give me a form to report an instance of fraud.

They are (or at least were then) truly indignant and uncaring - totally and utterly uninterested in individual circumstances and particulars. So gobbed-smacked by the cruel indifference, I actually wrote about this experience to Paul Holmes - hoping his programme would pick up on the social injustice associated with our ridiculous three-stage driver's licence regime. He/they did do a story on it - but unfortunately ran with the headline number of money outstanding in fines and court fees!

Missed the whole point, or perhaps his producers just had the same attitude as you - if you don't want the fine, don't break the law. But, THE LAW IS AN ASS.

It's the most ridiculous driver's licence regime in the world. Sets up kids to fail. Sets up kids to incur debt. Sets up kids to despise authority. Targets youth - generates inequality.

And the government asks itself how to break the cycle - when one of the most basic of hows is staring them right in the face.

Can anyone point me to statistical evidence that changing to a three stage licence improved road safety?
It has provided a nice revenue stream for the parties involved(AA, NZTA, Govt etc.).

Exactly. I recall when recently the government was considering the change to WOFs - one of the key considerations was the financial impact the reduction to once yearly for younger model cars would have on the private sector companies doing the WOFs. I mean, really.

And it's patently evident given the number of folks failed on the first time round on their driving test that that's just a money grubbing have as well. One of my girlfriends who had been driving for 10 years with four kids in the car and without a single accident on a restricted licence was failed when she went for her full for not rotating her head/neck enough to fully/properly look behind her when making a lane change. She explained to the driving tester person that she was a mother, not a giraffe.

Didn't matter. She had to cough up for another test. Highway robbery - literally.

so you are talking a one off case.

Oh and he could go back to court to get it reversed as its a mistake.

No. Wrote lots of letters on behalf of a number of teens. That one was just the one that broke the camel's back, so to speak.

Idiots , you would have thought they would have got the message from the last election ?

Here's the message for these fools:-

NO ONE WANTS ANOTHER TAX IN NEW ZEALAND

No one wants to be forced to sell the family home to pay tax on the family home when Nana dies ................ and this stupid idea will make sure they never get back into office ........ EVER !

Gee, I like this:

“Our new policy will see infrastructure funded by local government bonds, paid off over the lifetime of the asset through a targeted rate on the properties in the new development," Twyford said.

This:

He suggested ensuring all school leavers have a driver's license and be taught computer coding in the early school years.

And this:

"Information is now so readily available to us, the real focus of education, and indeed what employers are telling us they want are the soft skills- collaboration, problem solving and critical thinking. But employers also want school leavers to have the basics well covered - a driver’s license, digital and financial literacy, entrepreneurial skills and a sense of citizenship and civics," he said.

All common sense. Great!

Except, its the equivalent of a MUD (now that may not be a bad thing). Does it help? So what is the difference in the up front cost in the build v a MUD? What are the extra risks? Who guarantees that bond? that householder? or the council? With the old system the householder guarantees that capital in effect, with this new system other innocent ratepayers also share the risk? I believe so. When the owner comes to sell, the rates for that house will be noticeably higher and hence the house has to sell for less also. So is there a real gain?

The thing is its the plot of land that is racking up an unfair % of the build price of a new house ie land banking.

All common sense, for sure. But the Owners of modern governments do not want their citizens to be critical thinkers.

funny, sadly that's probably very true.

...No CGT but they might extend the bright line test to 5 years.... but that's not a CGT of course... (and its not 'significant' as most of these people should be paying tax on sale anyway of course)

2 years catches the speculators, I mean the very idea is to quick flick.

...but the law isn't just to catch 'speculators' - its all those who bought with the intention of creating 'income' from capital gain.
Anyone who bought investment property which is negatively geared for all of 5 years you'd have to wonder their 'intention'. It would just clear it up more for the IRD and be done with it. I kind of dont actually entirely disagree of course...

or competence...

The education system has been trying to teach some of our kids the basics for years.The tree Rs come to mind.

Super dole paid for by?

Government.

= Taxpayer. I think the gov staff forgets who actually funds them.

My point exactly. The hard pressed workers who are struggling as it is at the moment. Many have not seen a pay rise for quite a while. Those who have have had a minimal pay rise.

BUT WAIT .... THERE'S MORE ...........

Phil Goff is planning to become Mayor of Auckland ..........

God help Auckland and all who live here

I have been saying the same thing for years. Even before Len Brown's era. It is ever so slowly being ruined.

I pity all Awklanders, full stop. God knows why.

And if they want to Labour the point. some more...God help us all.

Unemployment under 4% is fine goal but what is the strategy? And dont say filling up Wellingtons office space with public servents again. How about a another weeks paid annual leave, that should help. Why stop at interest free student loans, surely there is a way to get more unemployables into lecture theatures? 90 day trial periods can go though. Lets add more paid parental leave, too etc etc. Its all about equality you see. Never mind the poor bugger paying the wages, he took the risk of going into business after all.

Dear God. If this is all the Labour Party can come up with at its conference then they haven't got a hope of forming a Government. Where is New Zealand's Jeremy Corbyn when we need him/her.

Where is NZ's Jeremy Corbyn? Very few people would vote for such a person in NZ, and I suspect very few will in the UK either. I assume Labour has given up on a CGT because they realise the same thing- it is a vote killer.
Robertson is still talking of changing monetary policy, as Corbyn has, and that has merits, given the current worldwide process seems very flawed. Just maybe Labour don't wish to have the best policies on the opposition bench.

Agree.

We had and have him in the previous and current no hoper labour leader. ie I hear this quite often from the committed left voter, and left pollies. Sue Bradford springs to mind, her comment to the data saying ppl were voting NZF was (paraphrase) "OMG they should be voting left so they get a workers paradise" totally missing the point that voters dont want a workers paradise or a capitalist paradise one either.

What wins elections is a middle of the road stance and what loses it is left or right extremism. Michael Foot (extreme left) v Maggie thatcher (initially moderate right) and then Tony Blair (moderate centre left) v John major),

https://en.wikipedia.org/wiki/United_Kingdom_general_election,_1997

and our own very last election, provide pretty compelling evidence that most voters do not want either, hence the rise of NZF.

Go Steven! How ever what you say is "What wins elections......", but do you actually think that that is the best thing?

Communism (and thus socialism) has proven that it can't work in reality and Capitalism is in the process of proving the same, so somewhere in the middle will work?

Oh For Goodness sake !

Why introduce a Capital Gains tax EVER , when the Government does not need the money ?

Give the Government more money and all they will do is spend it .

Its worth remembering that the Government spends every Dollar it takes away from me , a lot less carefully than I spend the Dollar I get to keep .

To balance all investment gains being taxed equally. So lets say the govn needs 100billion and has that right now but a major area has zero tax so other areas have to cover that. So what should really happen is we have a CGT on shares, housing etc and reduce say PAYE.

That is is why.

Some people have more than one property, and the second property may not by an 'investment', it maybe a weekender or lifestyle property. The thing is that your family home is not an investment, it is a place to live, so anything that is not an investment shouldn't be taxed. But too many gray areas.

Labour strategy now clear.

1)Whip the troops into line somehow and avoid any hint of division. Good luck with that if the polls stay where they are but it might work if they start to inch up..

2) Get rid of any policy any voter might not like. As far as I can make out they have now ditched their entire platform from just 12 months ago.

3) Campaign on motherhood and apple pie issues.

4) Hope enough people get bored with the Government to allow them to form a rag tag coalition maybe with NZ First and the Greens offering support from outside the Government.

If the next two years are about every party trying to avoid upsetting anyone it is going to be even more tedious than usual.

Yip tedious as. If any poly comes up with a policy that the media identify as something they can play with they immediately whip themselves and a few others into a frenzy until the poly drops it no matter how sensible the idea. Media are the reason for the middle of the road policies only rule, and the fact that we the public lap it up.
I'm almost at the point of wanting a benevolent dictator take over just to get stuff done.

Is ECAN a good example of what you might wish for?

Does it make any difference if they don't bring it in in their first term or not? It was one of their policies at the last election, so they obviously believe in it, and will likely bring it in if they last one more term. The big problem National have is succession, so labour may get their chance to get back in by default, although they will need to bring in 'hanger on' parties with them.

The labour leader reminds me of an unflavoured instant pudding, forgettable. He sends me to sleep when I listen to him, he is one of these expressionless people. People want a leader with some personality. Even Helen Clark had some, as did Goff.

just because they dont push it does not mean one of their partners wont, and with that they can claim its not theirpolicy but part of the agreement needed to Govern
as they say dont trust a poly, car saleman or RE they will all lie through their back teeth to sell you something you dont need or want

CAPITAL GAINS TAX is a RESENTMENT TAX .

It has only ever been introduced by left leaning governments
Its a massive disincentive to enterprise and risk taking
It does more damage to personal ambition than any other form of tax
Its primary aim is to make everyone dependant on the state .
Its ultimate control of citizens by keeping everyone poor and dependant on the Govt.
It is designed to damage capital formation and ensure we remain a low wage economy
It spawns a whole industry of "experts" to assist in avoidance and becomes a huge waste of time and resources
It adds little to the fiscus because you can choose not to pay it by not selling your assets

Points 1 to 3 - proof please.

#4. Most of the population are already dependant on the state, how does a CGT make it worse? What is the purpose of "income" tax?
#5. Refer above. I don't see a lot of citizens getting richer from the productive economy. Are you saying you're not rich enough and a CGT will affect this? To control the economy one must first control the people. You're already being controlled, how does a CGT make it worse?
#6. How is it designed to achieve this? We are already a low wage economy, how does a CGT make it any worse? Maybe we're a low wage economy because we don't have a CGT?
#7. We already have an industry of "experts" who assist in avoidance and are nothing but a huge waste of time and resources. A CGT will change this how?
#8. How is this an argument against a CGT?

The real problem is that existing tax law is outdated and not only needs to be simplified but also needs to adapt to existing conditions. It can only have been first devised by those with capital who wanted everyone else but them to pay tax. It may have been fairer and just back then (purely by coincidence) but what good is it now if everyone is chasing the easy money in residential property and the labour market is being squeezed for every last cent?

Please explain why it is fair that some ppl pay PAYE which they ork for, yet a CGT would be on an untaxed gain taht is not worked for but that is unfair. So yes I resent that I have to pay tax on my profit, GST etc yet a property speculator does not.

That is it in a nutshell really. Everything is skewed towards tax free gains in property.
Tax Evasion is a national sport, yet we whinge and bitch about a lack of healthcare, not free education, lack of public service. Those that really need it miss out.
I got a ribbing from a tax professional for telling him I wanted to pay tax not hide profits, I still paid tax.

The power company cartel needs to be broken. But if Labour trred to implement competition, National would resist. Back to front really. Weird indeed.

The cartel is based on the law, so a law change. Sad Labour has backed off this one, power is obscenely priced for an asset long paid off.

Labour previous electricity plan was dumb and fortunately they realised it. But competition is still needed but the Nats will prevent any move to that.