The boss of NZ’s biggest bank is not the only supporter of a broad CGT.  

An unlikely advocate for a capital gains tax has emerged in the form of the CEO of New Zealand’s biggest mortgage provider. She joins a growing tribe. As Labour readies its singed fingers to again grapple with this policy hot potato, we ask – with the vigour if not the rigour of an Inland Revenue investigator – who is on the record as backing a comprehensive tax on capital gains?

The CEO of ANZ

Speaking to Guyon Espiner of RNZ, Antonia Watson publicly joined the band of those who believe the New Zealand tax system inadequately addresses earnings from capital gains on property and other assets. “The time has arrived for a capital gains tax,” she said. “If someone had the courage to do it, I wouldn’t be jumping out of bed with joy … It’s a hard tax to comply with, and I think we have to be really alive to that.” But: “In terms of the overall fairness … it’s probably a fair way to tax another part of income in this economy.”

As for “unlikely”, however, the Taxpayers’ Union was having none of it, divining “shameless self interest”, hidden “under a veil of ‘fairness’”. The exclusion of the family home in just about every version of a CGT proffered in New Zealand meant it would advantage home lenders and “fuel New Zealand’s residential property money wheel”, according to the TPU release. “This is why people hate bankers.”

The CEO of BNZ

Well, he was the CEO of BNZ, and in 2017 he told Newsroom that a comprehensive capital gains tax should be a policy priority for whoever won that year’s election as part of addressing “the widening gaps between rich and poor”. He left the role at the end of that year and was deported moved to Australia. 

The CEO of CNZ

This is an error. No chief executive of Creative New Zealand is believed to have articulated a formal position on capital gains tax. Apologies.

The OECD

Whatever the state of New Zealand’s independent foreign policy, its independent tax policy is unequivocal, as the sole member of the Organisation for Economic Co-operation and Development, aka the rich country club, that does not have a comprehensive capital gains tax.

The IMF

The International Monetary Fund – a Washington-based UN agency described by political scientist Randall Stone as “the most powerful international institution in history” – this year reiterated a call it has made plenty of times before: New Zealand should introduce a comprehensive capital gains tax (and a land tax).

Accountants

A survey this year of Chartered Accountants Australia and New Zealand found 72% of members support a CGT.

Treasury

They’re just putting it out there in a paper, but still.

A rich-lister

Mainfreight co-founder and billionaire Bruce Plested told RNZ last year it was a good idea, even if governments tended to be rubbish at spending. 

Another rich-lister

Might also be Bruce, don’t know. This rich-lister would not be named, presumably for reasons of social capital. 

People in Australia

They’ve had a CGT since 1985 and it seems mostly fine.

People in New Zealand

But not all of them. A Colmar Brunton poll for 1News asked people in 2019 if they supported the Tax Working Group recommendation of a comprehensive CGT. It reported 46% said yes, 41% said no, and the remaining 13% stared into the middle distance. A 2022 poll by Reid for Newshub found majority support for the government to revisit CGT, by 55% to 33%.

Jim Bolger

New Zealand person and former National prime minister Jim Bolger now supports a CGT, according to RNZ.

The Labour Party, 1984-1990 & 2011-2019

The fourth Labour government (a subject about which there is reportedly a podcast) pursued “an on-again, off-again flirtation with introducing a capital gains tax”. By 1988 a group of tax experts observed, “It is now apparent that the government is determined to introduce a capital gains tax in New Zealand. It is regarded by the government and its advisers as a necessary link in the chain of reforms aimed at promoting a neutral tax regime, minimising opportunities for tax evasion and ensuring a non-distortionary tax system.” But amid a mighty soup of tax reforms it never quite made the statute books, and vanished with the collapse of the administration. 

As finance minister, Michael Cullen reportedly judged a CGT plan would be “political suicide”, and the party did its best after his departure to bear that out in the 2011 and 2014 elections. After repeated public flayings and encounters with the NZ First handbrake, Jacinda Ardern in April 2019 ruled out pursuing a capital gains tax for as long as she was leader. Her successor as party leader and PM, Chris Hipkins, ruled it out again in July 2023.

Various committees, etc

Fifty-seven years ago, the Ross Committee, appointed by the government to review tax, put it simply: “If it is accepted that any system of taxation should embody the principle of treating equally those who have equal capacity to pay then it is difficult to justify the exemption of capital gains from all forms of taxation while income from effort is taxed in full.” The resulting report wimped out on a full-blooded recommendation, instead saying something like “look into it more”. 

The 1987 [Donald] Brash Committee and the 1988 Valabh Committee called for a CGT. (The 1982 McCaw report did not.) The 2001 McLeod Review was not really into it. A 2010, the National-commissioned Tax Working Group liked it in principle, but worried about practice. In 2019, the Labour-commissioned Tax Working Group, chaired by Cullen, called for a CGT. 

Various tax reform groups, etc

Seems harsh to list them last but man bites dog and here we are. Tax Justice Aotearoa, obviously. Also the Green Party. And Te Pāti Māori. (Both would exempt family home.) And a bunch of other advocates, economists, academics and experts. 

A former IRD employee

“I worked for IRD for four years and saw on a daily basis why we need a capital gains tax, shit made my blood boil. Ginger going red hot in the workplace!” – a pseudonymous Reddit user who says they worked for the IRD for four years.