Ardern won't commit to offsetting any tax hikes with tax cuts

PM Jacinda Ardern refuses to say whether she'd prefer tax reform to be revenue-neutral despite instructing the Tax Working Group to put revenue-neutral packages on the table

11th Mar 19, 5:40pm by Jenée Tibshraeny

Prime Minister Jacinda Ardern won’t commit to ensuring any tax hikes introduced will be offset by tax cuts.

She acknowledged to media at a post-Cabinet press conference on Monday afternoon that the Government had instructed the Tax Working Group (TWG) to recommend packages that were revenue-neutral.

"So obviously we were interested in those ideas," she said.

"But we’ve made no commitments on any elements of the TWG report."

Pressed on whether her preference was for tax reform to be revenue neutral, Ardern said: “I’m not giving my preference here at this point in time. My job is to bring a consensus together...

“I have never stated a preference on a particular outcome of the TWG.”

Ardern’s comments could reflect her unwavering commitment to not tainting discussions between coalition parties, or pre-empting how the Government will respond to the TWG’s recommendations come April.

Alternatively, they could reflect the Government pulling back from its intention to ensure whatever tax changes it implements are revenue-neutral.

The TWG estimated that taxing capital gains earned on investment property, land and improvements, shares, intangible property and business assets would raise about $8.3 billion of tax revenue over five years.

It put four packages on the table suggesting ways to offset this through things like income tax cuts and changes to the way KiwiSaver is taxed. See this story for more on what those packages look like.

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89 Comments

by BuyLowSellHigh | 11th Mar 19, 5:54pm 1552280040

She is trying sooo hard to lose the next election. She’ll secretly be relieved when Winston saves her from herself next month.

by Foxglove. | 11th Mar 19, 6:15pm 1552281357

This issue is simply going round and round the mulberrybush.This is becoming a circus, and a penny dreadful one at that. Does this government actually know that they are meant to govern. They are sowing so many seeds of doubt and uncertainty, that if this was during the cold war, you would think the Russians were behind it. The world is not exactly an easy place at present and we are but a small player. For heavens sake get what we can do done and do it with some confidence not this endless pussyfooting with committees and Clark and Cullen playing Waldorf and Statler from the gods.

by imhenry | 12th Mar 19, 5:00am 1552320024

Excellent Foxglove for putting New Zealand's political system in perspective. The sooner this lot is gone the better. The Country needs common sense Government not Media statements" Look what I am doing" aren't I wonderful.

by Boatman | 12th Mar 19, 12:49pm 1552348143

National should campaign offering a binding referendum on whether Kiwi's want this tax or not .

by Jock Silver | 11th Mar 19, 5:55pm 1552280101

See folks? This is what you'll get when you vote for a CGT in the expectation that work-derived income tax will go down. More Tax.

Face it. The govt will never make any tax changes revenue neutral. Nose to the grindstone everybody.

by HeavyG | 12th Mar 19, 10:10am 1552338625

Workers noses are already at the grindstone, just want fairness in welcoming the capital gainers to the party.

by GV 27 | 12th Mar 19, 10:28am 1552339729

You don't get it. It's not going to make life any easier for workers, unless your idea of a worker is solely limited to policy analysts in Wellington.

by HeavyG | 12th Mar 19, 10:41am 1552340488

You don't get it. It's not about making it easier, it's about making it fairer. I want those making capital gains to feel my pain as a worker by losing a third of their income also.

by Gummy Bear Hero | 12th Mar 19, 4:13pm 1552360407

... yeah , I don't get it ... I'd have thought that as the real estate market has peaked and is now trending down that property speculators / investors would be dead keen on a CGT ...

They've have a CGT free run to the top of the market ... Taxcinda introduces a CGT ... and they can lock in losses as the market falls , to offset against future profits ....

... why can't they see the logic of that ?

by HeavyG | 12th Mar 19, 4:53pm 1552362831

Does it look like they're keen on a CGT?

This is not about how much a CGT will make, whether workers will pay less tax on their income or whether it's a bad time to introduce a CGT as house prices are dropping. It's about treating income the same, whether it comes from a person's labour or from a gain in value of an asset.

It's a fairness issue and nothing you have said responds to that.

by Ocelot | 11th Mar 19, 6:13pm 1552281189

Haha, until they've decided on what their proposal is, they're not going to include or exclude anything. Jenee is simply making up something to write about. I've got your next headline. Labour didn't denounce North Korea at the last press conference... Labour supports North Korea! Don't turn interest.co.nz in the the Herald please.

by GV 27 | 11th Mar 19, 6:21pm 1552281693

They've had that report a month. If they haven't figured out what their response is by now, they're not fit to carry out whatever it eventually is. I seem to recall a fair degree of panic about the Nats privatising ACC - did that ever pan out in the end?

by Foxglove. | 11th Mar 19, 6:42pm 1552282933

GV, no they haven’t figured out a response because they have realised they have not worked out how they can camouflage what is being constructed as a blatant tax grab. Read Chris Trotter today about all the other tax hikes being proposed, read out in parliament, as well as CGT. This is what Labour governments do because that’s all they have always done. Except for that of Roger Douglas though. I will keep on banging the drum. They introduce & increase GST as the great panacea, and next time round bang up income tax again, so eventually you end up with the same old tax plus GST. so twelve years later let’s do a replay with CGT. Here is Ardern, admitting as much as far as keeping all the “options” open.

by bilbo | 12th Mar 19, 10:13am 1552338829

Labour are about as indecisive as a kid picking out chocolate flavours. I can imagine Jacinda at the supermarket: Peanut or almond? What about hazelnut. The greens really like dark Ghana but little Winston doesn't like the dark ones and Shane is more into lolly scrambles. The greens are fruity and NZF are nuts. Maybe fruit and nut then. Oh damn it's not vegan. Might have to get a working group to report back on the options then.

by Averageman | 11th Mar 19, 7:33pm 1552285995

Hahaha. Gains tax with no cut to income tax...pack your bags for opposition benches now. Crazy.

by THE MAN 2 | 11th Mar 19, 10:34pm 1552296884

Seriously how could anyone with half a brain have any confidence in Ardern!
She has learnt the role of politician better than anyone that has been before her!
She makes no decisions whatsoever that are important for the country!
It just gets worse by the day.

by Pricklybeard | 12th Mar 19, 9:31am 1552336275

'She makes no decisions whatsoever that are important for the country!'
Not true, she did ban future oil/gas exploration on a whim before the information could come out that it would add to our carbon emissions and cost us billions!

by andyb | 11th Mar 19, 8:12pm 1552288325

Haven't used it for a while but well overdue... #NotmyPM

by bob cotton | 11th Mar 19, 8:48pm 1552290527

Same brainpower as a headless chicken.

by Ex Expat | 12th Mar 19, 8:11am 1552331460

Unfortunately, even in the Ineptocracy we have you can’t live in an isolationist bubble, well not fully. Living in a leafy suburb is a partial win, if you don’t have to live amongst champagne socialists (the worst type)

by Boatman | 11th Mar 19, 8:22pm 1552288958

The Greens co-leader has stuck her stake in the ground and just kaiboshed the whole debate .

I have been saying it for months ............ this Coalition Government is an utter shambolic disaster, bumbling and at times lurching from one self created crisis to the next .

What have we New Zealanders done to deserve this ?

by Houseworks | 11th Mar 19, 8:27pm 1552289275

Marama Davidson?

by andyb | 11th Mar 19, 8:45pm 1552290345

Yup.. she has said CGT doesn't go far enough and should be the first step to wider tax reform.

Looks like McFrowny Face has got a lot of work to do to reach a consensus... that said given her vast and worldly experience of chairing the International Union of Social Youth this should be a breeze.

by Foxglove. | 11th Mar 19, 8:56pm 1552290979

Well last time they hid behind Jim Anderton and the Alliance. Now there is a replacement shield. When they run these replays, do they really think everybody has forgotten?

by murray86 | 12th Mar 19, 9:09am 1552334962

she was interviewed on National Radio yesterday morning on housing and proved that she had virtually no understanding at all of the issue. I cannot understand how she holds her position, or who is advising her does.

by Houseworks | 11th Mar 19, 8:20pm 1552288833

Once the cgt has been cut and diced and sliced there wont be much tax revenue to distribute so the effect will be another Cullen "chewing gum" hand out :) who would be game to preside over that?

by fmr ca | 12th Mar 19, 8:27am 1552332447

Exactly, considering exemptions, deducting the bright line test revenue and a flat to falling asset market - there could be close to nil revenue from CGT for the first five years. It would be foolish to reduce income tax in the expectation that CGT will replace it. It is an unpredictable tax unlike income or GST, and people change their behaviour to avoid it. Investors will simply hold off selling for the first few years, if National maintain their policy of removing a CGT. This could seize up the economy. Ardern and Robertson need to read the dissenting members' report to the TWG, but I doubt they will bother. Their view is that a CGT loads dead weight cost onto the economy for very little tax revenue and little effect on house prices. And that an extension to the bright line test would be preferable.

by waymad | 12th Mar 19, 9:32am 1552336375

Um, that assumes it's to be on Realised CG. Now if it were to be on Unrealised......watch them pesoes rolling in...predictable cash, just what spendthrift pollies love to see.

by fmr ca | 12th Mar 19, 9:59am 1552337964

Don't give them ideas....

by HeavyG | 12th Mar 19, 10:14am 1552338842

Look at everyone screaming murder at a realised CGT on limited asset types. An unrealised gains tax will never see light of day.

by Boatman | 12th Mar 19, 12:49pm 1552348177

National should campaign offering a binding referendum on whether Kiwi's want this tax or not .

by andyb | 11th Mar 19, 9:01pm 1552291283

Simon Bridges would be best just to sit back right now.

The Greens have said CGT doesn't go far enough but if we cant get CGT in we shouldn't be re-elected.
Winston knows if CGT goes thru then he wont be re-elected as he will burn his supporters (as well as contradict his previous stance on CGT).

Bridges doesn't need to stir the pot. Sit back and keep his powder dry as the Coalition of the Lost tear themselves apart.

by Boatman | 11th Mar 19, 9:14pm 1552292049

For the life of me I fail to understand how or why the Labour -leg of the coalition Government needs so many months to make its position clear on this tax ( which it has wanted for over a decade ) .

They (Labour ) have had the TWG report since before we, the people, saw it ........ and we were mightily horrified by the contents of the report when we finally did get sight of it .

Its a shakedown of the assets and small ( and often modest) capital reserves of ordinary hard-working individual New Zealanders, who , at the Governments' instigation have saved some capital and risked it in providing rental stock and building a nest egg for their retirement , and old -age .

Its wrong on every level and driven by resentment of success.

by RickStrauss | 11th Mar 19, 10:04pm 1552295042

This is an inventive article. Inventing much, where little was actually said.

by Te Kooti | 11th Mar 19, 11:00pm 1552298431

I believe a case can be made for a more equitable redistribution of the tax however I am vehemently against CGT, or any other change for that matter. This is how low tax regimes become high tax regimes - with no discernible benefit to the nations citizens. Any new revenue will instantly destroyed by bureaucracy, consultants and progressive agendas like climate change. The playing field is level, you know there is no tax on investment property so make rational decisions accordingly.

by Pragmatist | 12th Mar 19, 12:14am 1552302896

so.. let them eat cake?

by GV 27 | 12th Mar 19, 7:01am 1552327310

You're assuming that a meaningful portion of this extra revenue will make it back to a) people who need it and b) that they'll use it to improve their lot in life. As a rule, if that was the case it would be fine by me. The problem is when you have endless contractors, inflating public sector salaries in Wellington (but front line Govt workers like teachers etc striking) and one group of taxpayers paying through the note (e.g. student loan repayments) but other people universally get free tertiary education.

Fairness.

by Pragmatist | 12th Mar 19, 7:37am 1552329463

No, you're the one making assumptions here. I haven't said anything about that at all.

by GV 27 | 12th Mar 19, 8:38am 1552333088

I took an inference from your "Let them eat cake?" comment. Apologies if it was not what you intended.

by richard1965 | 12th Mar 19, 7:50am 1552330215

Will not commit but will do as politics will force them.

All surveys done by Labour party and Winston Peter and all discussions are just playing with time as what has to be done is already decided as below :

Understand that will bring CGT to housing market (For farmers and small business may exempt or give concession or go soft on them) and will give some concession on income tax.

by Boatman | 12th Mar 19, 12:49pm 1552348196

National should campaign offering a binding referendum on whether Kiwi's want this tax or not .

by RickStrauss | 12th Mar 19, 9:14pm 1552378455

They'll get to that right after they ask the CCP.

by mlpc | 12th Mar 19, 8:37am 1552333071

Taxinda - was a soubriquet ever more apt?

by Old Hoss | 12th Mar 19, 8:38am 1552333080

Watching this Govt self destruct is a wonderful thing - if it wasn't for the havoc they are creating in doing so. I am saddened that a Labour Government is so willing make it much harder for today's young to build an asset base for retirement. Stealing their future is not producing incentives to save and become self reliant through one's retirement years. As one who is old enough to remember the response to Nordmeyer's black budget of 1956 I can easily see the same thing happening to this coalition as happened to Walter Nash's government then.

by Foxglove. | 12th Mar 19, 9:13am 1552335180

You are a couple of years out but I too remember it well. Suddenly, no instant coffee! For years after “The Black Budget” was a lucrative rallying cry for the Nationals especially Muldoon who eventually morphed the theme into the dancing cossacks. Strangely enough, Muldoon later recounted that Nordmeyer was about the only Labour identity that he had ever admired.

by Brutus Iscariot | 12th Mar 19, 8:39am 1552333194

"My job is to bring a consensus together"

So clearly not a leader.

by mlpc | 12th Mar 19, 9:06am 1552334780

What she means by that is that her job is to try to get her party and the Greens to align with whatever Winston Peters wants.

by mlpc | 12th Mar 19, 1:40pm 1552351204

As I was saying, the PM is just waiting for Winston Peters to clarify what he wants: https://www.stuff.co.nz/national/politics/111207342/capital-gains-tax-c…

by bilbo | 12th Mar 19, 10:47am 1552340850

Good thing she didn't say "My job is to bring a census together." because she's even worse at that.

by kane02 | 12th Mar 19, 9:10am 1552335002

talk about a slow moving train wreck. This is laughable. Although its not as it is messing with peoples livelihoods, and NZs future. I speak to businesses, bankers, entrepreneurs on a daily basis. These people are investing in NZ. The feedback is very negative. I have not seen this in over a decade. Transactions in many sectors are slowing. Pressure is building There can be only one outcome. And it isn't good.

by RickStrauss | 12th Mar 19, 9:53am 1552337633

Transactions in many sectors are slowing because we've been relying on debt-blown bubble driven consumption. Now we're seeing the long-term effects of this showing up around the world: https://www.interest.co.nz/news/98570/us-retail-sales-weak-us-inflation…

Blowing asset bubbles and taking ever more of working folks' pay packets in subsistence and housing costs (especially those extracted as finance costs) leaves little to circulate in the local consumption-driven economy.

We are seeing the results of the last decade's reliance on blowing bubbles and living off cheap debt, while penalising labour and exempting unearned income.

If we'd tax land value instead of labour bearing the bulk of the burden people who work would have more to spend in the local economy, and less would be extracted oversees.

by kane02 | 12th Mar 19, 1:50pm 1552351821

tell that to the chippies, the cabinet makers, and the tradies out there that are watching forward orders dwindle. The reality is we, whether you like it or not live in a capitalist society, and it is transactions that make the economy function. Some rely on debt, others don't. It is the sum of the moving parts that counts

by RickStrauss | 12th Mar 19, 2:04pm 1552352649

Exactly - we need to encourage more money to be circulating through the local economy instead of being tied up in massive debt and the interest being extracted to foreign banks as a result.

by GV 27 | 12th Mar 19, 2:11pm 1552353078

Or...we could let people keep more of their own money?

by RickStrauss | 12th Mar 19, 5:08pm 1552363722

Indeed, we could tax lower income taxes on labour and raise taxes on land or capital gains, thus letting more New Zealanders keep more of their own money (re tax) whilst also letting NZers keep more of their money via paying less to foreign banks as interest.

Good idea.

by murray86 | 12th Mar 19, 9:11am 1552335102

Of course JA won't commit. the fundamental untrustworthyness of politicians around tax. there is huge history - GST is a case in point. At 15% I seem to remember that we wouldn't be paying PAYE at all. It is after all their trough and they want to keep it full to over flowing. Time to rip off the masses again!

by Foxglove. | 12th Mar 19, 9:14am 1552335244

Exactly!

by bilbo | 12th Mar 19, 9:53am 1552337596

National Party - Lolly scrambles for boomers, land bankers and China. Perhaps the least nationalist of all parties.
Labour Party - Represents idiocracy baby factories via welfare such as working for families. "Labour" doesn't care about hard workers at all.
Greens - The watermelon party. Red on the inside and actually not overly interested in the environment. These loons have two leaders how on earth does that work? Do they paper siscors rock on every decision?
NZF - Pork barrel politics and a whole bunch of do nothing on immigration reform.

None of them will tackle the living expenses problem because they don't care as long as the banks, boomers and baby farmers get their loot.

Can the hard worker catch a break from these traitors?

by Foxglove. | 12th Mar 19, 10:33am 1552340028

Yeah, as I said on another post. It sucks!

by Te Kooti | 12th Mar 19, 10:43am 1552340615

NZ has one of, if not the, lowest personal income tax scales on the planet for a welfare state. What exactly do you want? What is a problem is the cost of living however, but they are two very different things.

by bilbo | 12th Mar 19, 10:53am 1552341239

You're forgetting the other payment methods. Council rates. GST. Huge immigration has ethnically replaced entire suburbs. Half the SOEs are sold off. Welly power lines owned by Chinese.

We pay very dearly actually.

by Te Kooti | 12th Mar 19, 11:05am 1552341959

Where are the Western economies that don't have a consumption tax or council rates and what has immigration got to do with income tax? Perhaps Denmark have no consumption tax, but the average personal income tax is 45%. NZ's income tax rates are the envy of most Western tax payers.

by GV 27 | 12th Mar 19, 11:11am 1552342311

Completely meaningless without taking into account thresholds and relative costs of living. How can I struggle to pay a mortgage on a modest home but yet still be taxed at the highest possible rate?

by Te Kooti | 12th Mar 19, 11:15am 1552342534

I'd reply but I actually have no idea what you said.

by GV 27 | 12th Mar 19, 12:51pm 1552348262

Just putting two top rates side by side and saying ours is lower isn't going to give you the full story.

by Te Kooti | 12th Mar 19, 1:39pm 1552351186

I agree and disagree. No it doesn't tell the whole story, but that is a deeply complex discussion. Ceteris Paribus, lower taxes mean greater take home pay and NZ has some of the lowest PAYE on the planet. However non-tradeable goods adjust to disposable income. So basically higher take home pay = higher rents. Rent is high in Manhattan and HK as disposable income is high, it's a finite resource. As soon as students were able to borrow our rents jumped in Wellington. Basically, if income tax was cut to zero, rents would sky-rocket.

by RickStrauss | 12th Mar 19, 2:01pm 1552352482

The tax mix is important too. Having no-to-low tax on land and capital gains results in more money being taken out of NZ in the form of rent extraction (rent on money) rather than circulating through the local economy. And people having less effective take home pay to spend in the economy after housing costs. So it's going at the moment.

by Te Kooti | 12th Mar 19, 2:35pm 1552354543

I don't follow your logic "Having no-to-low tax on land and capital gains results in more money being taken out of NZ in the form of rent extraction (rent on money) rather than circulating through the local economy" You are conflating different principles. Untaxed capital gains will actually stimulate the domestic economy - the wealth effect. If I make $100k tax-free flipping a house I may buy the Stabi-craft or do the renovation. You can argue it's unfair, but it increases GDP. As for money being taken out of NZ - there is a difference between interest on funding and profits being repatriated to Australia. It's no bad thing a foreign investor lends NZ money, I tend to agree on the profits though but that is only because the Australian Banks have gotten themselves organised in a free market.

by RickStrauss | 12th Mar 19, 5:15pm 1552364158

Zero land tax and high taxes on labour ---> higher land prices and more Kiwis taking on larger and larger mortgages to buy it off each other ----> as in the current situation, more and more interest being collected and expatriated overseas to foreign parent banks, out of banks' record profits.

It would be better to have land tax (unlike income tax, it also cannot be avoided structurally) and lower levels of mortgage debt as a result. Less money to interest and expatriation, more recycling through the local economy as taxes spent on necessary infrastructure.

(As an aside, of course as John Key notes, it would be much more fair for all income to be treated equitably - income from capital and income from labour.)

by GV 27 | 12th Mar 19, 2:14pm 1552353289

We also have pretty low wages and costs of living that are rapidly outstripping them. Yes, you can take more tax from people, but that 39% rate in the 2000s to 2008 didn't do much for house price rises; in fact, they rose faster then than at any other time in history. The Australians earn more, pay less in living costs but spread their tax brackets far wider than we do.

by Pragmatist | 12th Mar 19, 5:23pm 1552364626

Why would a 39% income tax rate have slowed house price rises when house prices rises were in part driven by the fact the profits were untaxed?!? You don't seem to grasp the whole point of taxing housing speculation profits.

by bilbo | 12th Mar 19, 11:23am 1552342983

I wouldn't mind so much if I got something back out of it. The core services (health care, education , police and transport infrastructure) are a bit of a joke really. The largest single chunk of tax payer money goes towards already rich boomers who never paid in enough and use that money to ruin the housing market for young people. Accommodation supplement (landlord welfare) and working for (dysfunctional) families is probably not far behind.

The tax is not spent on core services building the nation it's pissed away on boomers, landlords, and dead beat families which is all funneled into offshore bank profits.

by THE MAN 2 | 12th Mar 19, 4:22pm 1552360943

Bilbo, there is no point having a chip on your shoulder about baby boomers,
It is in recent years that house prices have taken off in NZ and that is not the fault of the baby boomers at all,it is the competition amaongsts the 25 to 40 year olds buying for owner occupation!
Investors have not forced prices up, as look to buy at unders!
If you couldn’t beat them, then why didn’t you join them and make plenty?

by Gummy Bear Hero | 12th Mar 19, 4:35pm 1552361738

... what about the effect of a CGT on our nation's horticulturists ... I'm sure that the potato growers have every reason to have a chip on their shoulders ...

by delboy | 12th Mar 19, 12:21pm 1552346494

If there is any good in the TWG proposal it's putting CGT on lifestyle blocks over 4500sqm. Good farms are being broken up into these often non-productive one horse ragwort and gorse plantation blocks so perhaps the CGT will discourage people from lifestyle blocks.

by powerdownkiwi | 12th Mar 19, 12:44pm 1552347872

Good farms?

Farming today is monocultural (non bio-diverse) and totally a case of applying finite fossil fuels to food.

https://www.resilience.org/stories/2003-10-02/eating-fossil-fuels/

Not only is agribusiness farming unsustainable, so too are the crammed cities it feeds. I suggest that those lifestyle blocks have more potential for biodiversity, require less fossil-fuel support, and can be morphed into the food-supply of the future (which will involve more people per acre).

by Boatman | 12th Mar 19, 12:47pm 1552348038

To Jacinda the -fence -sitter .............Sitting on a barbed wire fence only ends up with you getting barbs where you dont want them .

She needs to make her position on CGT clear , no more time for obfuscation .

by mlpc | 12th Mar 19, 12:56pm 1552348571

To be fair, I don't believe the PM could make her position on CGT clear.
She obviously has a very poor understanding of business and economic matters.
She'll probably decide to wait until Peters makes his position clear.

by Carlos67 | 12th Mar 19, 1:02pm 1552348920

Watch out Boatman your comment will be censored by deletion like mine was.

by Foxglove. | 12th Mar 19, 1:02pm 1552348979

Being Labour, more likely the picket fence. Potentially though, just as treacherous and painful.

by RickStrauss | 12th Mar 19, 5:09pm 1552363774

Boatie, were you not a big fan of John Key?

Also a fan of irony, obviously.

by cs | 12th Mar 19, 2:03pm 1552352626

The Wealthy Are Victims of Their Own Propaganda - Stephanie Kelton
To escape higher taxes, they must embrace deficits.
https://www.bloomberg.com/opinion/articles/2019-02-01/rich-must-embrace…

You reap what you sow. You've made progressive NZ parties obsessively pay-go.

by Gummy Bear Hero | 12th Mar 19, 4:20pm 1552360810

Witness Justin Trudeau : 4 years ago at the tender age of 43 he was elected Prime Minister of Canada ... the people loved and adored him , he was young and handsome , glamourous , females swooned over the guy like no one had in Canada since the Beatles toured in '64 ...

... now , he's dog tucker .... toast in the polls ... tracking to being unceremoniously dumped out at the forthcoming elections ...

Jacinda ! ... wakey wakey ... the sands of time are running out for you ... being young and smiley smiley doesn't work forever , the natives are getting restless .... get your act together , or wither Trudeau goes , you will as well ... and aboot time , too...

by solardb | 12th Mar 19, 5:05pm 1552363527

Whats the hurry ?. Biggest tax reform for a long time , and everybody expects them to pop a policy out months after the reports are released. they will be aiming to think this through and get this right. And , yes , getting it right includes making it palatable to their coalition partners and the voters.

by Property Leader | 12th Mar 19, 5:47pm 1552366058

It is all about property investors and how much they will pay.
People forget that over 30% of my rents already get paid to the government as normal income tax. My commercial tenants already pay 15% GST to me so with low interest payments most income is taxable.
Now the greedy boys and girls in Wellington want even more.

by RickStrauss | 12th Mar 19, 9:16pm 1552378577

Just treat all income - earned and unearned (capital gains, windfalls etc.) - the same. Then there's no cause for whinnying that anything's unfair.

by solardb | 12th Mar 19, 9:59pm 1552381198

No , because that will all be taken into account. The capital gains less the tax you have already paid. You pay tax every year , basically on the incease in value of your property. ( not market value increase). Income less expenses, the difference is your profit if you take it , or the added value of your business(property)if you leave it in the property.. Tax is the same wether you take it or leave it in the property. So the tax is on the increase , not your income. When you sell , the capital tax payable is the tax on the amunt you sold it for , less the tax you have already paid. Same with a business, they are paying tax every year .

by THE MAN 2 | 12th Mar 19, 10:22pm 1552382577

Capital Gain in property is not unearned income at all, and should not be subject to any Capital Gains Tax!
Landlords do p,entry of things with their properties that we do not claim time for, including property checks quarterly, doing repairs ourselves or arranging for repairs to be done, finding new tenants etc,etc.
Landlords who do well are deserving of capital gain on their properties or why would negatively geared landlords bother??

by RickStrauss | 12th Mar 19, 10:51pm 1552384269

Ïf you earn NZ$100,000 from going out there and having a job, and you pay tax on it, well fair enough. If you earn NZ$100,000 from buying a property, well you probably should pay tax on that – fair enough," Key said.

Capital gains are generally regarded as one of a number of forms of unearned income. And as Saint John, says, it's fair to tax income equitably.

Not landlording efficiently or effectively doesn't make one more deserving of tax-free income. But yes, negative gearing should probably go away eh.