Politics:
National leader Simon Bridges and NZ First leader Winston Peters are both claiming credit for killing the capital gains tax.
Prime Minister Jacinda Ardern announced yesterday that the Government would not be implementing the recommendation of its own Tax Working Group – a broad-based CGT that would bring the tax on profits from investments into line with profits from income.
Ardern said that while she still personally believed that a CGT was the right decision, the country clearly did not, so no party she led would campaign or implement one.
A TVNZ poll in February found that more people supported a CGT than not when it was paired with an income tax cut – one of the proposals from the working group.
Ardern made clear in her comments that the coalition was not able to reach a consensus on this, however – and given the Greens’ strong support for a CGT, it was clear that NZ First was the party that stopped it.
Peters himself put out a tweet celebrating the move, saying: ‘‘We’ve heard, listened, and acted: No Capital Gains Tax.’’
He told media that he went into the process with an open mind but had not been convinced of the merits of a CGT, and didn’t think the public had either.
Peters said the ‘‘absolute complexity’’ drove him away from the CGT, and that he had never seen an overseas example where a CGT had fulfilled its actual purpose.
He also said it would be unfair to those forced into the housing market during the fourth Labour Government in the 1980s to pull the rug out from under them.
He rejected any notion that he had too much political power.
‘‘Politics and coalitions are difficult to operate. This has been the most successful coalition in an unexpected way – it’s not a matter of being happy or who won or who lost.’’
Bridges: We scared them off
Bridges said his party’s campaigning had ‘‘embarrassed’’ the Government into the backdown.
‘‘It’s a big win for National, it’s a big win for New Zealanders.’’
He said his party’s opposition had stopped NZ First ‘‘quietly’’ allowing the tax through.
Bridges said the economy had suffered from the uncertainty over the tax.
‘‘In the Government’s so-called year of delivery, they’ve dropped their flagship tax policy.’’
Peters rejected giving any credit to Bridges, who he said had basically no credibility as leader.
Not what the Greens wanted
Confidence and supply partner the Greens have been forced to swallow another ‘‘dead rat’’.
Co-leader James Shaw expressed the ‘‘disappointment’’ of the party and said had conveyed this to Ardern when she phoned to tell him last week.
‘‘We’re disappointed that the Tax Working Group’s unanimous recommendation to implement a capital gains tax on investment properties isn’t going ahead.’’
In February, during the commencement debate as Parliament opened for 2019, Shaw questioned whether the Government ‘‘deserved’’ to be re-elected if it did not implement a CGT.
When asked if he resiled from those comments, he said he didn’t – but said the Government did deserve to be re-elected.
‘‘I absolutely believe that New Zealand’s tax system does need to be fairer and progressive . . . when I said that, I was making a call for bold action.’’
Every coalition Government had difficult decisions to make, and no one party got everything all its way, he said. ‘‘Today is one of those days.’’
Shaw did not agree that NZ First held too much power in the coalition. ‘‘It requires all three parties to agree on anything for any decision to go forward.’’
When asked if he thought it was Bridges or Peters who killed the CGT, Shaw replied: ‘‘Well, Winston Peters is in Government, Simon Bridges is not.’’
There were many recommendations yet to explore, he said.