Hard News by Russell Brown

246

A Capital Idea?

If only because it has little to lose, Labour is to make policy around a capital gains tax on investment property -- an idea that has been deemed too politically risky to consider by successive parties of government.

• If it incentivises productive investment over our longtime addiction to property, even a little bit, it will be good for the country.

• It probably won't bring in as much revenue as Labour says it will, but it will make Labour's other tax policy -- the tax-free threshold -- much more credible.

• A land tax -- another way of addressing similar problems -- might actually be a better idea, but would not be politically viable. Not least because it would make media-ready victims of some elderly people.

• "Leaking" the news has been a very good tactical move. When the Prime Minister declares that a capital gains tax, a land tax or a tax on financial markets transactions "would crush everyday New Zealanders" he sounds a bit panicky. And unconvincing.

• The demented arguments against a CGT raised by Deborah Coddington on Morning Report do not seem likely to convince anyone. WTF was that about anyway?

In 2009, David Farrar declared it was time to "take a serious look" at a CGT, in the wake of a Treasury report. This morning, he said it was a poor idea that would not work.

• Phil Goff, who has interests in two investment properties, should not shy away from saying so. Indeed, he should cop a line from Barack Obama and say "people like us should pay our way".

Discuss.

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