Jacinda Ardern and Simon Bridges have clashed in Parliament over the Tax Working Group's recommendations on tax exemptions for Māori.
The National leader grilled the Prime Minister during Question Time on Wednesday, asking her if the Government would exclude Māori from the proposed capital gains tax (CGT).
The Prime Minister suggested it was inappropriate, and questioned the motives of Mr Bridges, at which point House Speaker Trevor Mallard told her: "Indirect criticism of that nature is not acceptable."
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The Māori tax debate
The clash started when Mr Bridges asked Ms Ardern about the Tax Working Group's report - published on February 21 - which raised issues about potential exemptions or deferrals on CGT for Māori organisations in the interest of fairness.
However, those recommendations were simply that: recommendations - and weren't included in the group's formal recommendations. It advised the Government to look into it further and discuss it with Māori.
Mr Bridges pointed to page 15 of the Tax Working Group's report titled 'Summary of recommendations'. It recommended the Government consider that "some types of transactions relating to collectively owned Māori assets merit specific treatment in light of their distinct context".
It also recommended the Government "engages further with Māori to determine the most appropriate treatment of transactions relating to collectively owned Māori assets".
The National leader then pointed to volume two of the Tax Working Group's report which is not official recommendations. It suggested Māori freehold land merit specific treatment under an extension of the taxation of capital gains. This could take the form of an exclusion.
The Prime Minister said the Tax Working Group "clearly recommended that we engage further with Māori to determine the most appropriate treatment of transactions relating to collectively owned Māori assets".
When Mr Bridges asked Ms Ardern to clarify if the Government would be willing to exclude Māori from the CGT, Ms Ardern retorted: "I question the motivation behind this line of questioning."
"I refer them back to the report which encouraged the Government [on] particular circumstances such as disposing of Māori freehold land or where assets are transferred within iwi, whether or not we should give specific consideration to an exemption, in the same way, for instance, if you had land passed down after death."
She then turned the argument against Mr Bridges, questioning his support of the 17.5 percent tax rate for Māori Authorities. They were created in 1939 to act as trustees in order to manage communally-owned Māori property.
"I'd like to make the point... we have, for example, a 17.5 tax rate that applies to Māori Authorities," Ms Ardern said. "Is the member saying he disagrees with that provision as well?"
"We have made no decisions, but unlike the other side of the House, we can see when there are circumstances that that do warrant consideration," she added.
"It seems to me the National Party now has a strategy where they don't support 17.5 percent tax rates for Māori Authorities. We might be interested in sharing that with iwi leaders."
The debate goes back to Monday when Mr Bridges issued a statement about the exemtpions, saying if the proposed CGT will have negative implications for Māori, "then it will have negative implications for all New Zealanders".
Finance Minister Grant Robertson then clarified that the Tax Working Group had proposed more work be done on the issue, and that the Government is not necessarily proposing Māori CGT exemptions.
Mr Bridges didn't touch on the fact that the Tax Working Group also recommended exemptions for non-Māori assets - businesses with a turnover of less than $5 million that used their gains for upgrades related to the company.