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Labour finance spokesman Cunliffe lets capital gains tax cat out of the bag in Parliament when asking English about SOE sales

Labour finance spokesman Cunliffe lets capital gains tax cat out of the bag in Parliament when asking English about SOE sales

Labour's finance spokesman David Cunliffe used questions to Finance Minister Bill English about the government's mixed ownership model to push Labour's unannounced, but widely expected, economic policy release on Thursday which is tipped to include a captial gains tax.

In Question Time on Tuesday afternoon, Cunliffe asked English whether he had read a passage in a Treasury report on the mixed ownership model that said: ‘A range of issues would make the complexity of this programme substantial’.

“And does he consider that some policies are worth pursuing, even if they are supposedly complex?” Cunliffe asked.

English replied the mixed ownership policy was worth pursuing, “... because it will give the opportunity for New Zealanders to invest in New Zealand assets at a time where their savings are reaching record levels. It’s good news that New Zealanders understand what needs to happen in this economy and the government is going to help by giving them the opportunity to invest their savings soundly,” he said.

Cunliffe followed by asking whether English had read the passage in the report that stated the plan would take three to five years for the sales to be complete, and entailing ongoing costs of lost dividends.

“And does he therefore agree that governments should undertake policies that take time to build and don’t necessarily release their core revenue potential in the first year?” Cunliffe said.

English replied by asking whether Cunliffe was trying to “conjure up an excuse for why his capital gains tax won’t raise the revenue he is claiming, and therefore is going to have large deficits and more debt?

“Then the answer is no,” English said.

Cunliffe carried on, asking: “Is there any evidence his privatisation policy would, “boost the domestic capital markets,” as suggested in the report? And wouldn’t a better policy address what he’s called the distortion that leads to Kiwis favouring unproductive property speculation, starving productive enterprises of capital?”

The reply from English was that the government planned to achieve both those objectives.

“So we have made significant changes that increased the effective taxation of property, and don’t tax the gains of hard-working New Zealanders who have increased the value of their business, as he is planning,” English said.

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7 Comments

If our government would like us to put more of our hard earned savings into...  (productive investment)....as opposed to housing speculation ...and Im assuming they are alluding to productive exports, then what are they doing to establish a competitive kiwi dollar relative to our trading partners. Oh thats right! they arn't doing anything are they, they are watching it float higher and higher. Without some sort of levelling of the playing field to iron out the speculative capital inflows that over inflate our highly geared economy whats the point of taking the risks necessary to produce competitive goods. 

This government is one of the main reasons the dollar is so high, because they are borrowing so much, which has to be converted to NZ$, pushing it up.

Yes that is right, and there hasn't been too much made of this. They are over borrowing so later on they won't need to borrow as much, which will make everything appear better, as interest rates are so low at the moment.

No the biggest reason is the USA and its antics...and the continuing GFC. 

Our Govn has to borrow because they set the tax rate to be neutral in a boom period...instead of saving the surplus in a rainy day fund....but of course Labour wouldnt have saved it, but spent it....just as bad.....

regards

 English replied the mixed ownership policy was worth pursuing, “... because it will give the opportunity for New Zealanders to invest in New Zealand assets at a time where their savings are reaching record levels. It’s good news that New Zealanders understand what needs to happen in this economy and the government is going to help by giving them the opportunity to invest their savings soundly,” he said

Firstly, I doubt the majority of NZ'rs really understand what needs to happen in this economy.  Secondly, why didn't Cunliffe ask why NZ'rs should be paying for assets that they already own?  Thirdly, if our savings are reaching record level, isn't that money already being invested somewhere?

Sigh!!! It seems everything I have done over the years to become indepentant in my retirement from a handout from the government gets screwed by the government.

I used a well know financial institution,,,,oh bugger 70k flushed,,

A rental property ,, oh bugger,,, they are making that  to hard as well.

Estate from parents... oh shite,,,they want to tax the transaction from dad to me on wealth that my dad has already paid tax on.

Every decision made seems to get the rules changed along the way to screw me up.

And we cant steal because the government hates competition.

All our past governements are forcing us to be dependant on them for retirement through draconian policy.

Time to move to Russia,,, communism seems to be becoming a more attracive option than a free (ha thats a joke) economy

 

 

"Cat out of the bag"...which turned out to be a Skunk. Hold on tight cunny!

Days to the General Election: 27
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