Farmers 'worrying like hell' after capital gains tax proposal

Duncan Barr's been looking after cows on his land for nearly 30 years, but he's fed up and says it's simply "getting too tough".

It's so tough, in fact, that he's looking at selling part of his farm - and everything just got worse.

People selling their farms from 2021 would be subject to the capital gains tax (CGT). It applies to all the land, apart from the 4500 metres around the family home.

Mr Barr says the tax is unfair

"To slap another tax into us really is just a disincentive to produce and to do anything."

Farmers are feeling under attack, as Tax Working Group (TWG) chair Sir Michael Cullen acknowledges.

"Farmers are going to worry like hell."

And for good reason, because it's not just the CGT recommended by the group - they could also face a fertiliser tax, a tax on water pollution and could have to pay for carbon emissions.

Labour tried this before, and faced a strong response from farmers. One even rode a tractor up the steps of Parliament.

In the last election, Jacinda Ardern faced a visceral fight from farmers, with picket signs and protests.

Farmers aren't the only ones feeling the heat - the TWG also strongly recommended a congestion charge for Auckland - that could see motorists pay to drive in busy parts of the city.

The key directive of the working group was fairness. There's one tax in particular Mr Cullen thinks is unfair - a smoking tax.

"People who are now smoking are on very low incomes, and tobacco taxes are now easily our most regressive tax."

He says the Government should scrap further increases and focus on programmes to help people quit. 

Mr Cullen reckons ex-smokers like him should be running those programmes. In Porirua, smokers agreed - the hefty price wasn't making them quit.

So there are a few smokers on side, but that'll hardly drown out the roar of angry farmers.