CGT backdown, everyone claims victory

Winston Peters says he has just decided today to not back a CGT as recommended by Tax Working Group and championed by Jacinda Ardern and Labour, despite opposing a CGT for a long time.

Surprisingly Ardern didn’t just scrap the CGT, she ruled out trying again with one while she remains Prime Minister – this is despite taking a CGT to the next election to let voters decide.

Winston now claims to be the CGT stopper. Simon Bridges claims he and National stopped the CGT. Jordan Williams claims he and his ‘Taxpayers Union’ stopped it with a petition.

Meanwhile Michael Cullen claims that is a defeat for National’s election campaign plans next year. This plus claiming victory for the Government was claimed by Te Reo Putake in a lipstick overload on the pig at The Standard – see CGT Dumped.

Jo Moir (RNZ) – CGT backdown: You win some, you lose some

It wasn’t even an hour after the Prime Minister had put the final nail in the coffin that is the capital gains tax (CGT) when RNZ asked Mr Peters whether Labour will be expecting his party’s support on another issue in return for losing this flagship policy. Mr Peters fired back: “May I remind you, the Labour Party is in government because of my party.”

No reading between the lines necessary.

And despite previously saying that the government didn’t deserve to be re-elected if they didn’t do a CGT James Shaw as busy claiming victories with other policies.

As for the Greens they had no hope of getting any points on the board today and while co-leader James Shaw came out with his best disappointed-but-optimistic face on, it was clear yet again NZ First had served them a gigantic dead rat to eat.

Even Mr Shaw is aware they’re starting to stack up.

Asked whether this was the biggest dead rat yet (bear in mind the waka-jumping legislation and Chinese water bottling expansion were pretty substantial) Mr Shaw replied: “I don’t rank my list”.

He couldn’t even hold on to the hope of a CGT under a future Labour-Greens coalition after Ms Ardern killed that today as well.

The Greens have been campaigning on a CGT for the entire two decades they’ve been in Parliament and today the Prime Minister stood and told the country there is simply no public mandate for it.

But we won’t all be winners. This must seriously affect the Government’s transformational reform agenda, given that they won’t have more tax to pay for it.

The official announcement:


Government will not implement a Capital Gains Tax

The Coalition Government will not proceed with the Tax Working Group’s recommendation for a capital gains tax, Jacinda Ardern announced today.

“The Tax Working Group gave the Government, and the country, an opportunity to look at the fairness of our tax system and debate options for change,” Jacinda Ardern said.

“All parties in the Government entered into this debate with different perspectives and, after significant discussion, we have ultimately been unable to find a consensus. As a result, we will not be introducing a capital gains tax.

“I genuinely believe there are inequities in our tax system that a capital gains tax in some form could have helped to resolve. That’s an argument Labour has made as a party since 2011.

“However after almost a decade campaigning on it, and after forming a government that represented the majority of New Zealanders, we have been unable to build a mandate for a capital gains tax. While I have believed in a CGT, it’s clear many New Zealanders do not. That is why I am also ruling out a capital gains tax under my leadership in the future.

“The Tax Working Group was a valuable exercise that has delivered some useful suggestions well beyond just the debate on CGT, and I want to thank the Group for its work. In fact the majority of recommendations will either be investigated further or have formed part of our work programme.

“There are other things that can be done to improve the fairness of our tax system. As such the Coalition Government has agreed to tighten rules around land speculation and work on ways to counter land banking.

“Work will also continue to cut red tape for business and crack down on multi-nationals avoiding paying their fair share of tax in New Zealand. We have already made changes to address base erosion and profit shifting, and we will shortly release a discussion document on options for introducing a digital services tax.

“My job now is to focus on the things we can and are doing to improve the wellbeing of all New Zealanders.

“The Coalition Government is addressing the long-term challenges New Zealanders face such as mental health, climate change and child poverty and responding to the March 15 terrorist attack and keeping New Zealanders safe. Those challenges will be my priorities for the remainder of this term,” Jacinda Ardern said

 

38 Comments

  1. duperez

     /  17th April 2019

    I’ve said before – we don’t want transformational reform, we can’t handle transformational reform. We can hardly tolerate discussion about it even.

    Tax reform? Changing the age for government superannuation? Put those in the too hard basket.

    As long as Ardern is Prime Minister? According to Kate Hawkesby she’s off to the UN anyway isn’t she? Labour are hardly likely to be in government without her so the topic won’t see the light of day again.

    • Duker

       /  17th April 2019

      No one in their right mind would go to the UN …..if there was better choices

      • Kitty Catkin

         /  17th April 2019

        Not if it meant living in Brussels, thank you, unless it’s less dull than it was when I knew it.

        I had an email this afternoon to say that the CGT had been dropped, but it seemed too good to be true,

      • Gezza

         /  17th April 2019

        I suspect the salaries & lifestyle compensate for the downsides.

        • Kitty Catkin

           /  17th April 2019

          I’d need a very good salary to make me live there. It’s very expensive (or was) so a good salary might not go far. Bruxelle was a huge disappointment. Nearly all of the Bronte places are gone, apart from anything else. If I had to live in Belgium again, may God forbid, it would be in Bruges.

    • Ray

       /  18th April 2019

      Nine years as an MP and nothing to show for it, how many years as a PM and the same result?
      It is also being said that how will the Coalition pay for everything without the extra tax income but as it was claimed CGT was going to be fiscally neutral and it seemed it was going to take quite some time before the billions started rolling in that will not be a worry!

      • Blazer

         /  18th April 2019

        what did the last Nat Govt achieve in 9 years?

        Please try not to trot out that tired line..dealt with the GFC and Chch quakes.

        Reality=SWF…

  2. Alan Wilkinson

     /  17th April 2019

    Bugger. She wants to get reelected after all.

    So even paying Cullen to insult people didn’t work.

    • Kitty Catkin

       /  17th April 2019

      She didn’t seem very gracious about it, and looked as if she was stamping off the stage.

      I think that this will be bad news for Labour. It’s made them look weak and silly.

      • Gezza

         /  17th April 2019

        A face like thunder shown on1news at 6 as she stomped petulantly up to the podium. Snd that was their angle. That she hated having to dump this policy.

        • Gezza

           /  17th April 2019

          🙄 Snd = And

          When they showed a short clip of Simon Bridges saying – a victory for the National Pardy; we’ve embarrassed them out of it – ma burst out laughing,

          • Alan Wilkinson

             /  17th April 2019

            Sounds as though that was aimed at his own caucus in desperation.

            • Gezza

               /  17th April 2019

              Ma’s never done that before. I wasn’t expecting it. I laughed at her! 😀

            • Gezza

               /  17th April 2019

              I think he really has become just a figure of fun & derision. Tvnz will never make him look good. They did the same with Andy Little.

        • Kitty Catkin

           /  17th April 2019

          I missed the very beginning so didn’t see the petulant walk. She always walks as if she’s in a paddock anyway; head down, feet treading hard as if she had gumboots on.

          She seemed very pouty and graceless about it, which was a pity. Being a bad loser never looks good. I remember Mike Moore being a poor loser.

          A man I knew stood for council and it was very close between him and someone else. But when the other man was elected, F announced it somewhere and sincerely congratulated him, hiding his own disappointment.

  3. David

     /  17th April 2019

    Dammit, what a shame.
    I feel sorry for her supporters she has literally delivered nothing in fact the things she wanted to sort are a little bit worse than when she started.

    • Duker

       /  17th April 2019

      That’s happens in coalitions.
      Same as Key went to UN where he crowed about the Kermadec mrine sanctuary but here in parliament in spite of having the numbers with Green party support the Maori party threatened utu if it went through. KMS became a dodo
      RMA reforms went through same way……much blowing of trumpets….then quiet sneak away when partners balked

      • RMA was different, they could have tried to work something out with coalition partners, but chose not to.

        • Blazer

           /  17th April 2019

          ‘”The Nats went into the 2008 election promising RMA reform and, despite having the numbers with ACT after the election, did nothing,” Seymour said.

          National broke their promise.Come in Al.

          • Alan Wilkinson

             /  17th April 2019

            Keep agreeing with Seymour, B. It’ll do you good.

  4. Quite a lot of disappointment being expressed from the left.

    • Corky

       /  17th April 2019

      I don’t know why. Jacinda has just bought Labour another term in office. Would Marian prefer to live under Crusher Collins for 9 years? Or would she prefer a pragmatic Labour Party?
      One thing I dislike about Lefties is their lack of gratitude for a variety of support they receive from any government in power.

      • “Jacinda has just bought Labour another term in office.”

        Really?

        Maybe she has, by gifting NZ First another term in office. What’s the point in being office if you have someone stopping you from doing the nig Labour and Green policies?

        Not just CGT. Also carbon emissions reduction. Kiwibuild is Labour’s but supported by the Greens. Big ticket items being torn to shreds by Winston.

        But I don’t buy the assertions that this assures Labour of a return to Government. It’s only have way through their term. Will voters want a repeat three years?

        • Corky

           /  17th April 2019

          Those are all fair questions. And yes, there is no electoral certainty for Labour. However, if you saw some chap on One News tonight – I think his name was Simon
          Somebody. He was hesitant and looked like he could fall over at anytime. So, my money is on Labour.

          • National could break with tradition and be the first major opposition party to lose an election? That wouldn’t be due to the CGT backdown.

            • Kitty Catkin

               /  17th April 2019

              The name is Simon Bridges; he’s National’s leader, a very clever man. A non-voter might well not know who he is.

  5. Alan Wilkinson

     /  17th April 2019

    Audrey Young fails to realise the reason it failed was because it was a particularly stupid idea, even for Lefties:
    https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12223321

  6. Gerrit

     /  17th April 2019

    Labour failed to get the CGT over the line for three reasons.

    One; the never sold the message in HOW a CGT was going to reduce house prices. Most people realised early on it was not going to do anything for first home buyers or renters. In fact they could see prices going up, not coming down.

    Two; the CGT would have hurt the productive sector enormously with 33% rates of taxation on the sale of a business or farm. Who would invest in a NZL business or enterprise when 33% went to the government. If they had lowered to rates to be more in line with the rest of the investment world exposure to a CGT the COL might have got better buy in.

    Three; they never spelt out or painted the picture how a CGT was going to make the tax system fairer.

    Add to those reasons the Cullen “rich prick” legacy, this was never going to be a sell in.

    • Did suggesting a 33% rate with no allowance for inflation assure failure? Was it all a big sham?

      • Gerrit

         /  17th April 2019

        One could almost imagine Cullen thinking, how can I make this CGT unpopular? Oh I know lets make the CGT 33%. A rate so high it is unsellable. Was Cullen the right choice to head the TWG?

        Why did he set the rate so unfathomably high? Certainly did not pass the KISS test.

        Yes I think it was sham. Labour knew they could not get a CGT across the line so made the TWG the scapegoat. Cullen aided and abetted the final result so to answer my own question, yes Cullen was the right choice to lead the TWG to failure.

        • Kitty Catkin

           /  17th April 2019

          33% ??? You must be joking. He must be mad.

          It did pass the KISS test, though. It was the KISS of death to CGT and the voters said that Labour and Greens could KISS their arses on this one. Let’s hope it’s a KISS goodbye for Labour.

  7. Surprising to see James Shaw trying to attract attention at this time.

    • Alan Wilkinson

       /  17th April 2019

      A fool opens his mouth and removes all doubt.

  8. duperez

     /  17th April 2019

    The main thing to come out of all of this could be that Jordan Williams sees himself as not a loser. 🙃

  9. Zedd

     /  18th April 2019

    this is the nature of MMP; any changes needs support of ALL parties.. not just Labour telling NZF & Grns to ‘do as you’re told’. That is the FPP mindset, that Natl are still stuck in ?! :/

    • It’s more like the bind that Labour are stuck in and the impotence that Greens are stuck in.

      • Zedd

         /  18th April 2019

        I cant dispute that PG.. BUT as is clear, without all 3 parties, there may have been 3 more years of ‘neglect & cronyism’ (under Natl).

        As a ‘staunch Lefty’ Im still OK with this MMP Govt. “Lets do this !!” 😀 🙂

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