I read in my newspaper yesterday afternoon that Luxon had had a rather … odd comment in reply to ANZ’s CEO saying that a capital gains tax on investment properties was, in principle, fair.
What did he say?
The way Luxon probably intended this to come across was something like “taking money from New Zealanders Bad” .. in the sense that his government collecting tax from its citizenry is apparently somehow comparable to profits levied by private sector enterprise, and that higher profits are … ok, so maybe it doesn’t actually work very well as an analogy.
But here’s the thing.
Luxon using this as his response to Watson (the ANZ CEO aforementioned) upon the comment with relation to CGT ‘fairness’ is revealing.
Effectively, when somebody brings up a point with some logic for it (in this case – somebody who literally wrote their dissertation on tax remarking that while they’re not hugely enthused about it, it’s “fair” to tax investment property as investment in property) , National doesn’t really have an answer.
What they’ve got instead is whataboutery and insults.
Nicola Willis’ contribution was similarly glib:
“If she’s really worried about the wellbeing of New Zealanders, then there’s a lot the bank could be doing”.
Ok, but you guys – Luxon, Wills et co. – you’re the Government.
If you’re genuinely of the opinion that our banking sector is not acting in concordance with the “wellbeing of New Zealanders”, and is (as is generally agreed) taking rather eye-watering profits at our literal, direct expense …
… then why not actually do something about it?
New Zealanders gave these guys (rightly or wrongly) the power to govern.
That means much more than being ‘theoretically aware’ of a problem but only deigning to decree via press-encounter that a bank (or, indeed, the entire banking sector) ‘should’ do something better … when one of their CEOs happens to mildly embarrass you in a media cycle.
Luxon and Willis are hopeless. Their stupid response on this issue is right up there with, “no I am not borrowing for the tax cut at all, I am borrowing for other bits”. Total bullshitters who frighteningly seem to actually believe some of their own rubbish.
6 Pads Luxon worships the NZ Real Estate Market and the Tax Free Capital Gains available in our over inflated Real Estate Market, shit quality houses selling for $1.0 million, it ain’t Rocket Science why we have an inflated Real Estate and Housing Market here in NZ, when the gains for speculators are virtually Tax Free. Every punter from China and India have been throwing their $$$’s into the NZ Property Market, I hear regularly of Landlords owning 50+ houses, people basically farming houses for Tax Free Gains ???
Luxon will not do it because he still has 6 hoses to sell before he runs off and hides so he needs that tax free income .Then there is the point that those 6 houses are allowing him to pay less tax on his income .So why would he bother to step up like the last government did and do something about it .And the result is another hospital build scrapped two great ferries sunk and no new schools built .
I wonder what Luxon is spending his personal $18k ‘landlords tax break’ gain on?
If we look across the Tasman we see that the whole CGT regime is a huge financial bonus for the financial industry. It is no wonder the banks think this is a good idea.
You have a whole industry to provide “Asset Valuation Reports”, “exemption claims”, “CGT calculators” and a whole host of accounting services and practices the banks here just want to drop into.
Called expanding the business.
Want to see what a clustered mess the CGT is in Australia?
This is the very beginning where you calculate what is exempt and what is not. Fine print excluded.
https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax
When we go to the published spreadsheets of taxation income CGT is not listed as a separate entity, it is lumped into the “income on inmoveable property” catergory. They simply dontpublish howe much (or how little) income is derived from CGT after the “sharks” have circled the wreck and bitten their share (banks, accountants and asset valuators — looking at you).
Whilst is is possible a CGT would work, don’t be under the misapprehension that is it a simple tax or cost less (when is valuation day?) both to collect and administrate from a government viewpoint, but also to the asset owner now needing to pay a raft of “financial industry sharks” to work out what is owed.
Only winners are banks, software providers, state servant head count, accountants, finacial advisors, etc. Certainly not the state with increased revenue or the people with even higher taxation and compliance costs.
The same old bullshit about everything being too complicated. Winners are also PAYE earners who don’t have all of the burden on them, which conveniently left out.
You missed my point, it is 100% doable but it is costly to set up and administrate for both the state and the tradeable market. The returns are hard to quantify for they are not a separate line item in the accounts, making it difficult to quantify their effect on the top line of the crown accounts. With CGT income being always in a state of uncertainty, depended upon the fluctuations in the assets sold market, to plan revenue dispersion in a fluctuating market is not easy.
Totally agree with PAYE being the main contributor for taxation but if you have a look at the Australasian crown accounts, they still are (PAYE as prime contributor) even with a CGT in place over there.
CGT does not replace the PAYE due to costs involved. That is my point.
I understand your post .It was the same for GST off fruit and veg Hipkins great offer .People say it happens in Australia but they do not recognize the cost to do it . As with many left policies they look good on paper but not when it comes tomthe real-world. This is because they have little or no business knowledge.
CGT “happens ” in about every OECD country Trevor. It’s utter rubbish to compare CGT to GST regimes in terms of complexity.
Look at the business knowledge Luxon has imposed on us. It has created a recession and business retail and corporate are going belly up left, right and centre. And Willis’s answer to that is to force workers into cities to spend money that it is not disposable.
Everything about your ideological post is wrong Trevor. The real world for you is delusional.
WTF is Luxon talking about?
Banks do not collect taxes.
Governments collect taxes.
Luxon is Prime Minister and head of government.
Or is he? (Maybe someone should tell him).
Capital Gains Tax is not about sending money anywhere else. It is about keeping money here.
It is not about taking money off New Zealanders. It is about distributing it fairly.
I apologise to everyone who already knows this but I feel someone should make it clear (Does Chris read TDB?)
I think banks generally favour CGT since it’s levied after mortgages are paid off (or will be paid off from the proceeds of a sale), so the banks are not really affected by it. I seem to remember, from a few years back, Dominic Stevens, at that time chief economist at Westpac, coming out in favour of CGT in a newspaper article. Their thinking is probably that alternatives such as land taxes or wealth taxes would be less favourable to banks, so they support CGT as a sort of “lesser evil”.
It’s bizarre that the champions of free enterprise are suggesting a bank gets a social conscience. Weird comment from Willis.
“then why not actually do something about it?”
I wonder how much those Australian banks contribute to the national party’s election coffers.
Parties that want to get elected know a CGT would be a poison chalice. The only ones who vote for it are those that know it will not apply to them as they have no ambition to accumulate wealth. These types give their vote to Greens or TPM as they are the only ones who k ow they will never have real power
The only ones that don’t vote for it are neoliberalistic selfish cunts making money from others. They vote National ,ACT and NZ and are the economy rapists.
And Trevor if you believe everyone has the same ability to own 8 houses, then you are fucking retarded.
A landlord selling a property doesn’t make money from “others” when he sells it. The only one he makes money from is the buyer.
Jesus Trevor. Can you not see the generational inequities built into our tax system? As for your comment that the only people in favour of a CGT are those that have no capital to tax. Ever wondered why? They are too stretched paying student loans, GST on everything they buy, and inflated rent that is partly caused by our distorted tax system that encourages investment in non productive assets. They will also be expected to shoulder the burden of our superannuation debacle and our generations refusal to fund infrastructure as things fall apart through latent neglect. Not a great outlook for anyone in their early 20’s. All because we refuse to wake up to the fact that functioning societies cost and the status quo is nothing less than the generational theft of younger New Zealander’s future by the so called boomer generation.
Here’s why Nats don’t like it because the CGT would claw back the free ride they gave to landlords that ALL are paying for.
Bloke next door with his investment house as of now collects 80% ird rebate back on his mortgage interest, next April 1st that rises to 100% of his mortgage interest rebate.
On top of the rental income, sure he pays a mortgage, but he gets the equivalent of $201 back per week from ird to offset that mortgage.
Now if equality and equal treatment was a real thing as Little Dave claims, shouldn’t we all be able to claim the same on our own mortgage of our one home ?
No. I don’t think we should all be able to claim the same on our own mortgages. I don’t think that landlords should be able to claim deductions for interest either. I do think, however, that they should be able to claim depreciation, but subject to an excess depreciation claw back when the property is sold. Being able to claim depreciation on the run would help with cash flow.
Perhaps, if interest were deductible, there should be a claw back for interest claimed.
This government will do nothing because it amounts to more than that magic figure ,you know $3 billion ,that their abacas is stuck on .If its over $3 billion we will have to can it because we cant count past 3 .So no new roads ,schools hospitals ,sewers ,state houses the list goes on .And on the top of their wish list is no more Maoris
Comments are closed.