Government 'embarrassed' by watered-down CGT policy - Simon Bridges

Simon Bridges has accused the Government of timing the release of its capital gains tax plans with the Easter break.

The Government is tipped to reveal which of the Tax Working Group's recommendations it'll adopt as policy sometime this week.

"I expect them to announce that pretty cynically actually, on the eve of Easter when people are preoccupied," Bridges told The AM Show on Monday.

"I think that's because they're embarrassed. I expect it will be effectively the minority report of Cullen's Tax Working Group, which is effectively just properties and as I understand it, rentals."

National claims the decision will be taken to Cabinet today for sign-off, and the report will be released on Thursday.

Bridges said there's no point in introducing such an "unfair" stripped-back capital gains tax, and National will repeal it should it win the 2020 election. The Government says any new capital gains taxes won't apply unless it wins that election.

"You have to ask why? Why are you doing this?  Don't get me wrong, I still think it's bad. I think National forced a climbdown on a bunch of stuff here, but I still say don't be fooled. Just because someone's not kicking you in the leg doesn't mean you should be grateful when they punch you in the arm, right? This is unfair."

The Council of Trade Unions is urging the Government to go hard, saying it would be a shame if the country adopted a watered-down version of the Tax Working Group's recommendations.

"People need to realise every extra dollar recovered through capital gains, is a dollar somebody else will not be paying, if it's a zero-sum game," said president Richard Wagstaff.

"When we're talking about increasing taxes for capital gains, the tax take remains neutral - that means decreasing tax for other people. It's just about sharing things more fairly."

Inequality activist group Closing the Gap also wants the Government to go all-in, and include not just rentals and investment properties, but also the family home - which has been ruled out so far.

"Fairness also dictates the family home should not be exempt, since that would skew investment toward pricey homes," said spokesperson Peter Malcolm.

"There are better ways to protect and promote home ownership, including graduated taxation - for example, exempting the first $20,000 of capital gain on the family home for each year of ownership."

Simon Bridges.
Simon Bridges. Photo credit: The AM Show

Malcolm said New Zealand's the only Western democracy not to have a proper capital gains tax.

The CTU estimates 70 percent of taxable assets are owned by just 10 percent of the population - and the rest of us will be better off with a capital gains tax.

"This was really talking about making a small part of the population pay their way fairly. I think it's a shame if the Government can't implement that policy."

When it was last in power, National introduced the bright line text of two years, to catch people who were flipping houses, making bank and avoiding tax. Labour increased that to five years. Bridges said National would reduce that back to two.

Newshub.

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