Govt chases its tail with CGT tangle

The Capital Gains Tax train wreck is all the evidence this is a Government that didn’t have a plan.

Why are we here? Because they have tried this before, got burned twice — and still haven’t learnt the lesson.

Jacinda Ardern overrode her party and ran this policy last election to be enacted by now. But she got dragged kicking and screaming into a cupboard and she acquiesced, promised nothing before 2020, then flicked it off to a working group.

The group was specifically tasked with finding a way to make a CGT work. It couldn’t. It told the Government it couldn’t, it was then told to go away and try harder. The Government stalled, pretending it hadn’t made up its mind.

It is still stalling, and in that is the naivety. It is making a complete and utter hash of it. The Prime Minister, at her post-Cabinet press conference, lectured the media on how to cover this subject, and offered an olive branch to small businesses and farmers that they’ll be at the top of her mind.

She does this because Newstalk ZB political editor Barry Soper said the

Beehive’s ninth floor is in shock at the reaction. More naivety.

If the politicians really thought a new allencompassing, sweepingly aggressive tax was going to be welcomed, they didn’t learn enough about the real world as they spent all those years at university, union meetings and running NGOs.

Enter Finance Minister Grant Robertson, who in his first major speech to business tells them the Government isn’t bound by the tax report. Because he’s clearly worked out as well that this thing stinks to high heaven.

Adding to the problem is the two months’ worth of lord knows what, as it, yet again, stalls for time having received one of its 100-plus working group reports. The politicians apparently need to digest, chew over, and presumably try to bring Winston on board with at least a small slice of it.

Do remember the more that it cut out of this, the more people exempted, the less sensible a CGT is.

If you’re taking farms and businesses out, you open the Pandora’s Box of the fastburgeoning industry that is tax avoidance. Not to mention the fact the more you exempt, the less you actually raise.

The less you raise, the more questions are asked about the cost of compliance and chasing returns.

Not unlike the “Google tax” which, although containing a moderate amount of common sense, isn’t actually looking to raise a lot but promises a world of pain in the legal department.

This Government looks yet again like it is fighting to convince anyone that what it is doing is good for the country, makes sense, and it’s all part of a clear, professional, well thought-through policy plan.

If the Government is on the ropes now, how bad is it going to get when it actually tells us it’s on and provide some specifics?