The last time StatsNZ produced any figures on the haves and have nots in our country was back in 2016 when it was revealed that the richest 10% of us own 60% of our nation’s wealth while the poorest 40% of us own just 3% of it.
That was back in John Key’s time and was based on research that’s now 4 years old. Nothing has dramatically changed in our economy since then (Grant Robertson’s first budget had all the hallmarks of a Bill English budget) so it’s a fair guess the gap between the rich and the poor will have continued to widen since 2015.
Here’s what Grant Robertson said on June 28th 2016 when Labour was in opposition..
“Asset inequality is one of the biggest issues that we’ve got here. We need to see wages lift, there’s interventions that government and employers can do and we’ve got to improve our productivity as a nation – but all of it should be premised on giving people a fair go.’ (Source RNZ)
Whatever you think of a Capital Gains Tax it was the method suggested by the government’s own Tax Working Group as a means of bringing some fairness back into our economic system. Here’s one of their key findings:
“All members of the Group agree that more income from capital gains should be taxed from the sale of residential rental properties. The majority of us on the Group, by a margin of 8-3, support going further and broadening that approach to include all land and buildings, business assets, intangible property and shares.”
Yesterday Prime Minister Ardern said No. “Not while I’m leader”
Meanwhile the proposal that GST be removed from food items didn’t even get a look in.
So not only do the rich get a continued tax break the poor continue to be punished by an unfair and unhealthy tax.
The government is touting that it will be producing a Well-Being budget this year.
I ‘m looking forward to it.
I’m really curious to know how you can have the politics of fairness based on the economics of selfishness.
Bryan Bruce is one of NZs most respected documentary makers and public intellectuals who has tirelessly exposed NZs neoliberal economic settings as the main cause for social issues.
A CGT has only become attractive to a large section of society as a result of the effects of the central bankers response to the GFC of 2007/8.
World wide not only are banks no longer lending to productive businesses as there is no profit or security there, they are flush with fiat money pumped into the banks to try to encourage just that lending. The only safe or profitable investments are speculative investments. The Banking/monetary system has proven itself to be not fit for purpose. It is not going to be fixed by a capital gains tax.
The existing tax system provides for a speculator to be deemed a property dealer , and profits from property deals then become recognised as income and taxed accordingly. This could easily be tightened up on so as to capture more speculators without penalising long term rental property owners who are in the business of providing much needed rental accommodation rather than speculators that are not letting but are contributing to the empty home syndrome.
Why should a second generation modest holiday batch owner loose their batch just because the government has allowed it to be valued by what an American or Saudi Arabian billionaire might want to pay for it?
Jacinda has made the right decision .
D J S
The banks seem to favour capital gains taxes. A recent newspaper article by Dominick Stevens, Westpac Chief Economist, confirmed this. The reason for this would seem to be that banks are not affected by a CGT since it is levied only after a property is sold and principal and interest paid in full. Other taxes however, such as land taxes or RFRM taxes, would reduce the amount of revenue available to pay interest, and could also influence negatively the amounts that people are willing to borrow and pay for properties.
It’s “lose” one’s “bach”.
sorry
It’s time that we use the words of the NY politician Alexandria Ocasia Cortes”:.. is it moral? “Is it moral that people are able to own multiple house – mortgaged off the back of each subsequent house – feel offended at the thought of paying more to our society through taxes while families are living -not only one on top of another because there’s no rentals available at a payable rate – but in cars!!!”
It’s time to call it out and name it – it is NOT moral- and they are just greedy.
It’s no use expecting the mass of people with disposable wealth to do with it other than what is legally in their best interests. Criticism has to be addressed toward the people in government who have the power to modify the options. It is they who are failing.
D J S
Those who do have these objections should also not have free rein to give up lame excuses or cry faux victimhood at the suggestion the contribute a little more to the pool to ensure that other NZers are not living in desolation. Those who have more SHOULD contribute more because it makes NZ a better place and quite frankly I’m sick of hearing landlords are doing tenants a favour. I heard similar balderdash from George Warlengan. Feel free to also call out all the politician, and media as well: they all deserve no less.
It is the owners of houses purely for capital gain who decline to offer them for rent that are causing the trouble. Causing the demand for rental accommodation to escalate rental prices. Long term landlords are at least providing a service.
D J S
What Ms Cortes is saying is probably true even if there are no capital gains being made, so this is not really an argument for capital gains taxes particularly. There are other, and more sensible, ways these people can “pay their share”. Property taxes, land taxes and RFRM taxes come to mind.
She was not referring to CGT but – what I’m more meaning is we need to start putting morality – and humanity – into our rhetoric towards people with more: people with no power for so long have been morally called out (solo mums, beneficiary, etc) it’s time we used that same language in reply. I’d rather the poli’s would just immediately remove negative equity from any property that is use for housing or a straight out tax of second properties – which can be rescinded once everyone has one.
john key disrupted how Stats NZ published figures about wealth distribution and debt distribution across Kiwis.
Prior to that the shift of wealth was shown to be steadily away from the majority to an elite few, with a rising percentage of the poor becoming more deeply in debt, or have negative wealth.
Political appointments in the public service have entrenched the deception.
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