Issue 410, March 1, 2019
The New Zealand government is saddled with a raft of recommendations by the Tax Working Group released on February 21, 2019. The Group, led by former Finance Minister Sir Michael Cullen has suggested widening the tax net to include Capital Gains, Environment, Retirement Savings and Charities. Changes to the threshold of Personal Income Tax, is perhaps the only marginal relief in the Draconian measures proposed.
New Zealand is a highly taxed nation and further burdens will not only hit the common people but also provide a backlash to the Coalition Government. While there could be justification of a Capital Gains Tax, in so far as it ‘attacks’ whose who make undue profit on property sales for investment, there is no reason to consider the same punitive measures on hardworking New Zealanders.
Counterproductive and nasty
The Working Group’s proposals will be counterproductive and nasty.
But we hope that the Labour government will exercise restraint and act responsibly.
New Zealand First Leader and Deputy Prime Minister Winston Peters has said that any Capital Gains Tax proposal is off the table, an opinion, reflected by other MPs from his Party.
Although the Greens have embraced the proposals, without the support of NZ First, there is no chance of the proposals going through Parliament.
The National Party has already vowed that it will repeal the Capital Gains Tax if they are voted to power in Election 2020.
Besides, harsh taxes will be antithetical to the government’s ‘Wellbeing Budget’ that is awaited with anxiety on May 30, 2019.
We hope that Prime Minister Jacinda Ardern and her Finance Minister Grant Robertson will tread carefully and do not face public wrath.
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