Happy days. Photo: Getty

Capital gains tax is dead and some people are very, very happy about it

True, Jacinda Ardern has faced a few criticisms for ruling out a new capital gains tax now and for as long as she leads. But a lot of people are very, very happy. 

Two million dollars and a tax working group later, Jacinda Ardern has dumped the Capital Gains Tax forever, saying she still believed it was the right answer, but the coalition government had been unable to reach a consensus and it was time to move on. Considering the Greens’ reaction was this, and NZ First reacted a bit more like this, it’s pretty clear where the stumbling block was.

Ardern probably feels pretty shit right now, particularly if she’s on Twitter where the left is paralytic with rage. But fear not! There are plenty who remain stoked over her decision. People like Andrew King, executive officer of the NZ Property Investors Federation, who said he was delighted:

“It’s absolutely the right move. It was never a good idea. It didn’t achieve what it was intended to achieve, to reduce house prices. It was only ever going to increase rents and make it harder for first-home buyers to save a deposit. It wasn’t going to be a fair tax. It was never a goer.”

Jordan Williams of the Taxpayers Union spread his joy across platforms and accounts, announcing a party at the TPU offices on the back of their campaign to ditch the CGT.

“Taxpayers across the country will be breathing a massive sigh of relief at this total backdown. Small business owners, lifestyle block owners, first-home buyers with flatmates, and other New Zealand taxpayers will be breathing a sigh of relief,” he said in a statement. “The prime minister admitted her government lacked a mandate to introduce the tax, because New Zealanders demonstrated that they do not want it. She is completely right.”

Over on Twitter, a few flutes of champas deep, the party kept on going.

Federated Farmers, who had described the CGT as a “mangy dog” were also celebrating, saying there were better ways to tackle housing affordability without hindering small and medium businesses, though they were short on praise for Ardern.

“It’s clear the coalition partners have listened to widespread concerns that a Capital Gains Tax has too many downsides, including massive administration costs and the potential to put the handbrake on the progress of small and medium businesses vital to our economy,” economics spokesperson Andrew Hoggard said. “It seems to us that New Zealand First has been pivotal in this decision, and we appreciate their pragmatism.”

“We’re also pleased with the assurance that there will be no resource rental for water or fertiliser tax – at least in this term of Government.”

 

The Real Estate Institute of New Zealand (REINZ) welcomed the announcement, noting they were pleased the government would focus instead on “other areas” of the tax system.

Eric Crampton, chief economist at the libertarian NZ Initiative, said on Twitter ditching the CGT was “an excellent decision”.

“I applaud Labour’s having consulted broadly, considered the very substantial technical problems in bolting a CGT onto our current tax system, and backing away from it. An economically desirable and politically feasible CGT does not seem to exist. Excellent decision.”

Simon Bridges and the entirety of the National Party are claiming credit too, crowing that while it was the right decision in the end, it was only made due to them and hey wasn’t that an expensive waste of time anyway.

“National supporters will feel really good. We’ve embarrassed the Government out of a capital gains tax,” he said.

Typically the listening comes first, but no matter.

In the end, co-prime minster deputy prime minsiter Winston Peters himself has claimed credit, stating in no uncertain terms it was his party who put the CGT down like a premature puppy.

“This decision provides certainty to taxpayers and businesses. We in New Zealand First wanted foremost for New Zealanders to have time to discuss and debate the contents of the report.” 

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Before Andrew King, the Federated Farmers, Jordan Williams and Porky the Pig send Winnie a gift basket, heed the warning of ACT leader David Seymour:

“The idea that New Zealanders should thank Winston Peters for saving them from a capital gains tax would be laughable if it weren’t so serious. It’s like thanking a kidnapper for releasing you.”

“In October 2017, Winston Peters condemned capitalism and chose a left-wing coalition that had campaigned on a capital gains tax. Peters’ belief that capitalism was a ‘failed economic experiment’ drove him into the arms of socialists.”

“Far from being a hero, Peters is the real villain in this story. Winston Peters and NZ First delivered New Zealand a left-wing government, and created massive economic uncertainty over a capital gains tax, and voters shouldn’t let them forget it.”


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