“Grant Robertson will have to ditch a full-blown capital gains tax after Stuff revealed this morning the Tax Working Group is likely to advise against the idea”, says ACT Leader David Seymour.
“The Tax Working Group has a strong left-wing flavour. It is led by an ex-Labour Finance Minister, and includes a prominent union leader and a self-proclaimed ‘skeptic of economic growth’.
“If a hand-picked group cannot bring themselves to recommend a CGT, Labour will need to abandon the idea.
“There’s no doubt Robertson wants to slap a CGT on New Zealanders. He has complained there isn’t enough ‘balance’ in the tax system and that it favours property speculators.
“Robertson has misdiagnosed the housing crisis as a problem of demand when in fact supply is the real issue.
“There’s no evidence that a CGT would help house prices. You only need to ask the people of Sydney, Vancouver, Los Angeles, or London whether a CGT has had any noticeable effect.
“In background papers released online, the Tax Working Group was told told by officials that a GCT will reduce the supply of rental housing and increase rents.
“With a CGT in place, the poor will be paying higher rents, and the taxpayer will be forced to shell out even more in accommodation supplements.
“These facts aside, a CGT is incredibly complex, would increase compliance costs significantly, and would raise no additional revenue for the Crown.
“Robertson must now ditch the idea”, says Mr Seymour.