Winston Peters shuts down suggestion New Zealand First controls Labour

Winston Peters has rejected suggestions his party exercised too much influence over the Government's decision not to implement a capital gains tax (CGT).

Peters, leader of coalition partner New Zealand First, held a press conference on Wednesday after Prime Minister Jacinda Ardern made the announcement.

When asked if the Government's decision was a case of the tail wagging the dog - an insinuation Labour was being controlled by a smaller party - Peters replied: "Next question."

"On the issue of capital gains tax, we couldn't agree. Despite that, the coalition Government agreed on a number of fundamental changes we will make in the future and the coalition is in very sound health," Peters said.

"I hope that we can lift ourselves and understand that we are talking not just about expenditure and taxation, but wise taxation that can grow our economy - and on those issues we are agreed."

Peters said in a statement there is already an effective tax on capital gains through the bright-line test, which requires income tax to be paid on any gains from residential property that was sold within five years of purchase.

In a NZ First newsletter distributed on Wednesday, an image of Peters was circulated with bold letters that read: "No capital gains tax."

Winston Peters shuts down suggestion New Zealand First controls Labour
Photo credit: New Zealand First

The newsletter said the party welcomed the Cabinet's decision not to implement an extension of a CGT, adding that there was "neither a compelling rationale nor mandate to institute a comprehensive capital gains tax regime".

Last month, NZ First's website featured a survey asking New Zealanders whether they would support a CGT, whether they thought the tax system was fair, and which aspects of the TWG's report they agreed on.

Both the National Party and ACT Party leaders said at the time NZ First was attempting to build the case for a CGT to "soften its voters" to the idea, as Peters has traditionally been opposed to it, saying it wouldn't work.

Peters suggested he might warm to the idea of a CGT talking to Magic Talk in February. He said: "When you're presented with a new set of circumstances, then it's wise to actually consider it before confirming your former opinion."

But he clearly hasn't changed his mind, telling the media on Wednesday: "That was our view, but we were happy to see the public dialogue and discussion for the last three months."

The Deputy Prime Minister said the Cabinet had made a decision about a CGT "in the last few hours", before Ardern made the announcement.

"It's not a matter of winning or losing - it's a case of ensuring that in the coalition Government you've got total buy-in or not at all," Peters said.

"We've had a long, very arduous consideration of this matter and we've given it our best shot to see whether or not there are areas where we can go forward."

The Green Party, Labour's confidence and supply partner, has long campaigned in favour of a CGT. Co-leader James Shaw said on Wednesday the party will "continue to work with Labour to make our tax system fairer".

"We're particularly disappointed that the Tax Working Group's unanimous recommendation to implement a capital gains tax on investment properties isn't going ahead."

When asked about the relationship between New Zealand First and the Greens, Peters said there was no issue, and suggested his party held greater influence.

"It's a positive working relationship, but of course, they are in a confidence and supply arrangement with the Labour Party and we're in a coalition agreement with the Labour Party - that's the difference."

Peters said while he didn't support a CGT, he welcomed Ardern's announcement that the Government will explore options to tax vacant land held by land bankers, and review the current rules for taxing land speculators.


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