Farmer fury: 'Tax Working Group recommendations threaten prosperity'

Federated Farmers has renewed its criticism of new taxes proposed by the Tax Working Group (TWG), and is calling on the Government to reject them.

The TWG has recommended applying the tax to gains and losses on land improvements (except the family home), including shares and business assets. 

Federated Farmers Vice-President Andrew Hoggard said it would be bad news for farmers.

"Small business would pay the costs, large business would spend thousands avoiding the costs, and tax advisors and valuers would have a field day," he said.

"There is possibly an argument for a Capital Gains Tax (CGT) aimed at rental properties if there was some sound evidence it would dampen investor speculation, and reduce price pressure and first home buyers being out-bid," said Mr Hoggard.

"But even with that, we haven't given the tougher 'bright line' test rules a chance to really kick in."

Andrew Hoggard said farmers will be badly affected by a capital gains tax.
Andrew Hoggard said farmers will be badly affected by a capital gains tax. Photo credit: Newshub

Federated Farmers believes the Government should heed the comments of the group's chairman, Sir Michael Cullen, who publicly reminded people that he had not promoted a comprehensive CGT during his nine years as Minister of Finance for the Helen Clark-led Labour Coalition Government.

"Sir Michael also said that New Zealand was so clever we knew a comprehensive CGT was a bad idea, or not clever enough to put one in place."

Mr Hoggard said it was clear that a CGT would do little extra, above what the Government is already doing, for housing affordability but would just add an additional layer of costs for businesses.

"Given it won't even apply to the vast bulk of houses, again how will it solve housing affordability."

"Fairness has been mentioned a lot in this discussion - why should the capital gains on a $2 million small farm in Eketahuna be taxed, but a similar valued house in Ponsonby not. Either everyone is in or no-one is."

Newshub.

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