‘Surprise card’ (really?) could help sell CGT

An obvious possible aim with Michael Cullen’s Capital Gains Tax proposals, especially the very high tax rate, was that the Government could adopt a watered down version and sell that as a good thing – this is an old political trick, lead with something terrible and then claim that a half as terrible policy was somehow great.

There are hints that this is indeed a deliberate approach taken, with a more moderate CGT being quietly circulated.

Tom Pullar-Strecker (Stuff): Surprise card could help Labour sell a capital gains tax ‘light’

The Government has a trump card that could make a capital gains tax less unpopular and far harder for any future National government to reverse.

Tax Working Group chairman Sir Michael Cullen has proposed making a tax on capital gains “tax neutral” by handing back the $8.3 billion in revenue it is expected to generate over five years, mostly through income tax cuts and improved KiwiSaver incentives.

But a well-placed source believes the Government is likely to propose slashing the rate of a capital gains tax (CGT) and introducing significant exemptions to get the tax in place, while still offering all the major “carrots” and keeping the change tax-neutral.

That could be achieved simply by declaring that the CGT should be “tax neutral” over a longer period than five years, say 10 years.

A ‘well-placed source’ sounds suspiciously lie a leak strategy is being used.

The Government asked the Tax Working Group (TWG) to come up with tax packages that were tax neutral.

But Finance Minister Grant Robertson confirmed it was the working group that determined that should be over five years, with “no ministerial direction” on the timeframe.

Robertson would not rule out changing the time period, saying only that the Government was “carefully considering the report and all of its recommendations”.

The source suggested that if the Government did shift the goal posts set by the working group it could halve the maximum tax on capital gains from the currently proposed top income tax rate of 33 per cent, to 16 or 17 per cent.

It could also decide “not to touch KiwiSaver” by exempting KiwiSaver funds from paying tax on Australian and New Zealand shares, exclude more “lifestyle blocks” from a CGT, and introduce a threshold under which small business owners would not pay tax on their capital gains.

Together that would address the “four main concerns” with a CGT, including one “which is gaining traction” that it would be unfair to tax capital gains at 33 per cent while not adjusting them for inflation, the source said.

This makes it sound like Robertson may be the ‘well-placed source’. Which wouldn’t be surprising.

It also wouldn’t be surprising if Cullen and Robertson had either planned a strategy of proposing a heavy handed CGT and then switching to a CGT-lite from the start, or have sugested the lite version in response to the widespread negative reaction to the version proposed by the Tax Working Group.

Lengthening the period over which a CGT would be tax neutral could also make it less appealing for any future National government to quickly reverse the tax changes, since many of the benefits from the overall changes would then be more heavily “front loaded”, the source observed.

Chris Wales, a former leader of PwC’s global tax team who has advised prime ministers and finance ministers in several countries, including Britain’s Tony Blair, said the approach could be “wise, sensible and democratic”.

“At a simplistic level, people will, of course, be relieved that the potential breadth of a CGT has been reduced and that the rate is nowhere near the 33 per cent that the TWG has put forward,” Wales said, speaking from Kiev.

The Government could argue it had respected the outcome of the group’s deliberations but listened to the people as well, he said.

It sounds like ‘the people’ are being played here.

There’s not much of a surprise in that.

Newshub Nation – Simon Bridges on CGT and other tax questions

Will Michael Cullen front up on Nation next? (for $1k a day).

Is our tax system fair as it stands? Fair to whom? It’s a bit of an impossible question.

Cullen to be paid $1k a day for ongoing media work on tax recommendations

I think it’s unusual for the chairman of a Government working group to continue promoting recommendations and defending the Government’s position via media after delivery of their report. I hope it’s more unusual to be paid $1000 a day to do it.

Stuff: Sir Michael Cullen debates impact of tax reform on farmers, without the politics

Sir Michael Cullen has continued his public statements on the impact of capital gains tax, although his tone has softened considerably.

On Wednesday the Tax Working Group chairman released a lengthy statement on the impact the proposals of the Tax Working Group would have on farms.

It came two days after the former Labour MP and minister of finance questioned statements made by the National Party about the possible impact on KiwiSaver.

Cullen did not say why he issued the latest statement, instead claiming he had “responded to a request to comment on recent claims about the effect on farmers”.

This week it emerged that while the Tax Working Group has disbanded, Cullen has had his contract extended by the Government.

Cabinet papers show Cullen was to be paid $1062 a day in his role as chairman of the TWG.

“We extended his appointment as the chair of the TWG to 30 June because we were aware there would be extended public discussion on the report, and this has played out,” Finance Minister Grant Robertson said in a statement.

That will be close to $100,000 over three months.  Where is Ardern’s so-called fairness in this?

If Ardern and Robertson aren’t capable of explaining and defending the working group recommendations then perhaps they should be paying Cullen out of their salaries.

Ardern argues in defence of more complicated taxes

Some people (including me) hoped that a decent review of New Zealand’s tax (and welfare) system would lead to simplifications. Complexities add to costs, and they tend to lead to distortions and unfairness – rich people are generally more successful at finding ways around complex tax law.

Jacinda Ardern keeps pushing more ‘fairness’ as a primary reason for tax reform, and she did this again in Parliament yesterday, but she also appeared to concede that this justified a more complicated tax system.

David Seymour: Is it possible that a proposed capital gains tax could be revenue-neutral?

Rt Hon JACINDA ARDERN: That is certainly the request that we made of the Tax Working Group. It was to consider options around making the package revenue-neutral.

That sounds lie a very fuzzy lack of commitment to ‘revenue-neutral’ tax changes.

David Seymour: Why would a Government request advice that would make a tax system more complicated, to get the same amount of revenue?

Rt Hon JACINDA ARDERN: Two points: firstly, to make the tax system fairer—which seems like a pretty good reason to members on this side of the House—and secondly, almost every member of the OECD manages to deal with what is being asserted to be complicated; why can’t we?

Ardern didn’t dispute “a Government request advice that would make a tax system more complicated” – in fact she justified it  “to make the tax system fairer”.

The more complicated it is the greater the chance of unfair anomalies and loopholes.

Paternalistic Speaker protecting Ardern in Parliament

There have been claims already that Speaker Trevor Mallard has protected Prime Minister Jacinda Ardern in Parliament when under attack by the Opposition.

This came up again after an exchange in Question Time yesterday, where Simon Bridges moved from questions about CGT effects on KiwiSaver to Ardern’s business experience:

Hon Simon Bridges: In light of her comments on fairness, is it fair that under the proposed capital gains tax, the small-business owner will have to pay tax on a third of their business when they sell up for retirement?

Rt Hon JACINDA ARDERN: Again, alongside the recommendations around a comprehensive capital gains tax, we’ve acknowledged that, for simplicity, that was what the Tax Working Group suggested. They also put alongside that, increasing the threshold for provisional tax from $1,500 to $5,000, increasing the closing stock adjustment, an increase in the automatic deduction for legal fees, a reduction in the number of depreciation rates.

So there was a suite of options in there, and, again, Mr Speaker, as I know you know, but as I wish the Leader of the Opposition would hear: we have not settled on any of the final recommendations of the report. We are still considering them as a Government.

Ardern brought the Speaker into the discussion.

Hon Simon Bridges: Is the problem with answering my questions that she doesn’t understand small business very well?

Rt Hon JACINDA ARDERN: No.

Hon Simon Bridges: When she told Mike Hosking last week and this morning that she’d run a small NGO that helped her understand small business, what was that NGO?

Rt Hon JACINDA ARDERN: I did not tell him that this morning.

Hon Simon Bridges: When she said last week on Mike Hosking that her running a small NGO had helped her understand small business, what was that NGO?

Rt Hon JACINDA ARDERN: Actually, I spent more time talking about the fact that my first jobs were all in small businesses. The point that I was making at that time—and actually, I continue to make—is that, as a Government, we are considering all of the issues that have been raised. That includes whether it be residential rentals, whether it be small business, whether it be KiwiSaver.

Hon Simon Bridges: Is the NGO she spoke of the International Union of Socialist Youth?

Rt Hon JACINDA ARDERN: The member knows how to use Wikipedia—well done.

Hon Simon Bridges: Has talking to international comrades helped her with her small-business policy development in New Zealand?

SPEAKER: Order! Order! No, the Prime Minister will sit down. We’re not going to have that sort of seal-like approach in this House. It’s a final warning, and I think Mr McClay will be the first out.

Rt Hon JACINDA ARDERN: I stand by the fact that I have worked in small businesses, that I have been in charge of hiring and firing, and I’d be interested in how many times he’s had to do that as a Crown prosecutor.

Rt Hon Winston Peters: Given all the—

Hon Gerry Brownlee: Ah, the businessman!

SPEAKER: Order! The member will resume his seat. Mr Brownlee will now stand, withdraw and apologise.

Hon Gerry Brownlee: I withdraw and apologise. What was the problem there? I called him a businessman; I apologise for that.

SPEAKER: The member knows well that he interjected while a member was asking a question. He will now leave the Chamber.

Hon Gerry Brownlee withdrew from the Chamber.

Ex MP Tau Henare:

Ardern was noticeably irritated from early in this exchange.

Richard Harman at Politik: Temper flash from the PM

What appeared to be a flash of temper from the Prime Minister in Parliament yesterday is an indication of how much the capital gains tax debate seems to be getting to her. She and Ministers are getting bogged down in detail as they answer endless questions about how the tax might work…

Audrey Young: Simon Bridges gets the better of Jacinda Ardern over small business experience

Ardern’s loss of form was Bridges’ capital gain as the National leader and the Prime Minister went head to head over a comprehensive capital gains tax (CGT) proposal.

It was a variation on fish and chip shop theme, from the previous day in which slaving over a fat vat in an after- school job gave her insights into how small business owners would be feeling about having to pay 33 per cent tax when they sold up their business for retirement.

Ardern had disputed the NewstalkZB host’s claim that none of the cabinet had experience running a small business.

It was Bridges’ moment but Mallard was having none of it. There are no rules for when applause is tolerated and when it is not. That is decided by the mood of the Speaker who clearly did not like National ganging up on her.

Mallard: “We’re not going to have that sort of seal-like approach in this House.”

Ardern looks under pressure over the Capital Gains Tax. She and her Government seemed badly prepared for dealing the widely expected recommendations of the Tax Working Group. With a decision still a month or two away, expect National to keep hammering Ardern on this.

Both Mallard and Winston Peters appear to be trying to protect Ardern in Parliament. Grant Robertson also stepped in to help. This looks paternalistic, and doesn’t help Ardern’s case.

Ardern won’t be able to come up with answers on CGT for a while yet, but she at least needs to find a way of handling the questions better – on her own.

 

Ardern blames media for lumps in CGT porridge

Jacinda Ardern fronted up on the first Newshub Nation of the year. She was asked about the blast of criticism following the release of the Tax Working Group report. She appears to blame NZ Herald columnists for giving the report negative coverage – but she and her Government seemed woefully unprepared for discussion following it’s release.

Yeah, and the Greens are all on board with the capital gains tax. It’s Winston Peters who could prove the hurdle. And you yourself, pre being elected and pre being in this coalition situation have talked about maintaining a right as a leader to make sure the tax working group reports back and that you’re able to— you can enact whatever it say. And, you know, that’s your right, and so that right might be lessened.

I don’t know how that’s been characterised. Of course, we all campaigned as individual party leaders. And everyone will have seen some of the statements I made as Labour leader.

Yeah.

I’m now the Prime Minister in a coalition government, and I have three parties I need to build consensus with. And, actually, that’s what I just have to do day-to-day. And the tax working group report — it’s no different. But having said that, obviously now we’re in a process of just allowing the public to see and the public to have that debate, and I think we should. You know, one of the things that I do think is unfortunate, though, is that, you know, there is a large group of New Zealanders, particularly young New Zealanders now who actually, if their aspiration has been homeownership has just become harder and harder. There’s a group of New Zealanders who don’t have columns in the Herald, who might not be having a chance to have their say on this. We need this debate in New Zealand, because we’re one of only a handful of countries in the OECD that doesn’t have this form of tax.

Sure.

And so let’s debate it.

And you’re leading it. You’re part of that debate, obviously, and your language is being scrutinised. Earlier this week, you seemed to be softening your language about, you know, having concerns about farmers and small businesses. So does that mean that you’re going towards where Winston Peters might sit?

It was an acknowledgement that in all of the debates we’ve had on capital gains. It often has been quite heavily focused in the commentary around, for instance, investment properties, and less so in the space where the tax working group went, which is broad-based and covering additional sources of income, and so small businesses in particular have been brought into that debate. And message was I hear that there’s a lot of arguments for and against, and I hear that. Because that was a new part of the debate, I didn’t want anyone to think that we weren’t considering all of the issues around that area.

So you say that, you know, you’re not going to reveal your position until you’ve reached consensus with your partners.

Yes.

That’s two months away. Are you concerned that this is creating uncertainty?

No. It’s a debate.

It’s a debate that Ardern and her Government started very poorly on, leaving a huge vacuum for concerns to be raised in. The lack of any clear plan has enabled uncertainty to grow, and her waffly response here is unlikely to help at all.

Capital Gains Tax has been proposed in Labour policy for many years. It helped defeat Labour in 2014. as a result Andrew Little dumped the policy. Ardern raised it again in the 2017 campaign but rapidly backtracked when it was slammed as electorally toxic.

Once in Government Ardern handed the decision making over to ex-Finance Minister Michael Cullen and the working group, but a year later, after CGT was proposed in the report, Ardern seems to still be floundering on how to handle it.

She may well have a problem with Winston Peters. whose support she needs. But she also has a problem with her own handling of tax reform – the right say she’s proposing too much, the left say she isn’t considering enough reform.

Rather than some semblance of getting things just right Ardern looks like she is poking at lumpy CGT porridge with a long toothpick.

Why people’s wages are shit

From a comment at Kiwiblog:

This is why you don’t want to even think about voting for “TOP” (The ‘Opportunities Party’)

I’m quoting Geoff Simmons, TOP spokesman, from an article he wrote in The Spinoff ‘Hey Renters Don’t Fall for the CGT Fantasy’ –

He says: You may not care about ‘business’ but have you ever wondered why your wages are so shit? The big problem is that our tax system favours investment in housing over investment in business’

No, that’s not why people’s wages are shit, Geoff.

The reason the wages are generally shit is this: businesses can’t afford to pay employees any more than they do, because the Government takes so much from the employer, then wastes a third of it before giving it back to said employee in the form of entitlements.

Wasn’t the Tax Working Group supposed to look at reforming the tax system?

It has suggested some limited changes, and it looks like the thing with most focus on in, CGT, will be pared back further if Labour risk it at all (or NZ First lets them).


And this comment from below deserves more prominence:

The reason NZ wages are poor is our lack of productivity per capita and geographical constraints.

To increase productivity, businesses must invest in new equipment, for growth and for efficiencies. Business needs access to capital for this, our early stage funding opportunities for small to medium sized businesses are extremely limited, due to the lack of capital depth in our markets. The tax system has contributed to creating this by incentivising investment into housing over more product asset classes such as equities and businesses.

The other key reason is geography. Our remoteness in the world and lack of scale. It is very expensive to bring product into NZ, it is very expensive to move product around NZ efficiently. This creates huge extra costs for business and consumers. This again contributes to a very high relative cost of living in NZ. Unfortunately there is not much NZ can do about this one, but it has it’s benefits too of course.

Ardern defends CGT and tax plan, Soper sulks

Stuff:  Jacinda Ardern notes ‘vast majority’ would be better off

Prime Minister Jacinda Ardern delivered a defence of the proposed capital gains tax plan today, noting the vast majority of Kiwis would be better off.

She also said the concerns of farmers and small business-owners were “top of mind”.

The tax working group, chaired by former Labour finance minister Sir Michael Cullen, recommended the Government introduce a new broad-based CGT on rental properties, land, businesses, and shares, paid at the income tax rate. The family home would be excluded.

This would raise roughly $8.3 billion over the next five years, but that could be ploughed back into the hands of taxpayers through a suggested income tax cut, and another tax break for KiwiSaver accounts. This would deliver a tax cut between $420 and $595 a year for almost all taxpayers.

Ardern said that because of this tax switch most Kiwis would come out financially ahead.

“The vast majority of New Zealanders would be better off. I think New Zealanders know this too: they are not ​looking at the proposals individually but as a potential package where they could receive income tax cuts or a boost to their KiwiSavers.”

“In Australia only 4.7 per cent of taxpayers paid capital gains tax in 2015. Over 95 per cent of Australians pay no capital gains tax in any given year,” Ardern said.

Ardern also sought to downplay the impact of the tax in general, saying it would only affect four per cent of the tax base when fully implemented in 10 years.

“It is far from an attack on the Kiwi way of life,” Ardern said.

She said the purpose of her statement was to make sure that the debate was based on facts, and declined again to endorse the actual plan.

Barry Soper’s take: Prime Minister Jacinda Ardern in state of shock at reaction to Capital Gains Tax plan

If you thought the Government (well more correctly the Labour Party) is hell-bent on committing political suicide you’d be wrong.

The Beehive is reeling and sitting in the top office of the ever diminishing building Jacinda Ardern’s in a state of shock at the reaction to the Taxation Working Group’s report.

Tax had been talked about so much they decided to hand it over to the Tax Working Group, led by Sir Michael Cullen, who knew better than to ever suggest a capital gains tax, correctly appreciating the political danger of it.

Ardern must have been having a nap during the two campaigns Labour fought and lost because of it.

Now she’s wide awake to the political damage it’s doing to Labour, spending the first six minutes of her post-Cabinet press conference yesterday giving us a lesson on how to report it accurately.

Ardern was at pains to ensure the students understood her lecture. The debate should be about a fairer and more balanced taxation system and is most certainly not an attack on the Kiwi way of life as some have claimed.

In her setpiece lecture she told us small business and farming are crucial to the economy and she wanted to be clear, she said referring to her notes on the lectern, that the effects on them will be at the top of her mind when the options are assessed.

Surely that, coming from the captain, leaves room for a sigh of relief.

As the lesson was drawing to a close she told us the bleedingly obvious: that the tax would be paid only when a capital gain is realised, or when an asset gets sold, so there won’t be an ongoing impost.

Until you’ve sold your next asset that is – and the capital gain on any asset won’t be assessed until after the law takes effect, most likely in April 2021. So the nest egg you’ve realised up until then won’t attract the captain’s call.

By and large, Ardern declared, the tax system was working well.

Yeah well if it ain’t broke – don’t fix it.

I wonder if Soper has a property nest egg or two he is worried about being taxed on.

It has been claimed that baby boomers will be hit the hardest by a CGT as many have invested in property aas a retirement fund. I have doubts about this.

If Labour get NZ First to agree to support CGT legislation, and if Labour get back into Government later next year, the CGT will only come into force in 2021. If Labour follows TWG advice and don’t make the tax retrospective, only capital gains from 1 April 2021 will be taxed.

So most of the capital gains scored by baby boomer investers, up until then, should be safe from tax. If they sell up soon they will be sweet.

It will be longer term property investors of the future who would pay the bulk of Cullen’s CGT, while baby boomers bask in their gains untaxed.

Tax Working Group, CGT – PR and promises

Through the week there has been a lot written about the released tax Working Group report, in particular about to CGT or not to CGT.

It looks very Labour. The scope of Michael Cuilen’s report was limited by Labour, but includes significant Labour terminology, like fairness and wellbeing.

But I get the impression  that Labour is backing off  introducing a CGT, either because they know they can’t get NZ First support, or they know it is too electorally toxic. Perhaps both.

Or else we are being played.  It proposes a high rate of tax, and includes farms and businesses. This could be an old trick of threatening something more harsh than is intended so the real aim looks acceptable in comparison. There is plenty of scope for  Labour and NZ First to come out with lower tax and a farm and small business exemption and claim they have listened to concerns.

NZ Herald Editorial: Pity if capital gains tax too hot for Labour to handle

If the Labour Party had any illusions about the fight it will face to bring in a capital gains tax, it knows now. Within 24 hours of the public receiving the recommendations of Sir Michael Cullen’s tax working group the hostility was almost drowning out support for the proposal.

The governing parties had the report weeks ago — plenty of time to time to form a response for announcement with the report’s release as often happens. But only the Greens greeted it enthusiastically.

The week before the report was released Green co-leader made a statement (in parliament) – he said that if the Government didn’t introduce a CGT they didn’t deserve to be re-elected. Labour didn’t seem to prepare, and didn’t seem to have a response organised – unless they deliberately left it open to National to attack the proposals.

Heather du Plessis-Allan: Big tax shake-up or big PR job?

It’s been dubbed the biggest tax shake-up in a generation. But it’s all talk. There’s no chance it’s going to happen. At least not to the full extent the Tax Working Group is recommending.

Some of the shake-up will happen. Maybe enough to qualify as a low-level tremor. Maybe it will include capital gains taxes, maybe it won’t. Yup, maybe none at all.

It’s all too early to say. And that’s for three reasons: Winston Peters, us and Labour’s own self-interest.

A CGT was a Labour election promise. It’s all about making the tax system fairer. It’s a Government looking after the poorest Kiwis. Robertson and Ardern have both spent too much time repeating that message to now walk away from their one chance to fix the system.

This is where Peters comes in. If he continues to oppose a capital gains tax, he might be their get-out-of-jail card. They might be able to happily drop a CGT and blame it on him. They could trot out the old you-win-some-you-lose-some argument. They’ve used it before.

It’s of course true that coalition governments require compromise.

But will the Peters excuse be good enough? Ardern and Robertson will have to use all their charm and communications skills to sell that message.

Either this will be the biggest tax shake-up of a generation, or the most convincing PR campaign to explain why it never happened.

We will have to wait a couple of months for the Labour-NZ First decision making and the PR to reveal which way this is going to go.

It’s hard to see how NZ First would support the introduction of a CGT. Winston Peters has condemned it in the past, notably during the last election campaign. The future of his party is at stake, and u-turning on a CGT could be a big nail in NZ Firt’s coffin.

I think Labour have created a dilemma for themselves here.

If they manage to get CGT legislation passed in time for the election they are at major risk of being thrashed by voters.

If they backtrack and pull the plug on CGT they will annoy core left wing support who have bought the promise.

 

Peters the elephant in Labour’s CGT room

Labour told the Tax Working Group what they couldn’t do, and the Tax Working Group final report seems to be largely a Labour prescription. It even uses Labour-like terms such as Future of Work as well as Future of Tax. This isn’t all that surprising given the involvement of Michael Cullen.

But while the Group’s recommendations, especially on Capital Gains Tax, may look like a Labour wish list, the elephant in their room is Winston Peters and NZ First. With National saying they are against the CGT Labour will need NZ First support to get anything done.

Greens have already said that the Government won’t deserve to be re-elected unless they introduce a CGT – see James Shaw slams tax timidity, calls on Labour, NZ First to be bold with CGT.

An exchange in Parliament yesterday after the release of the report gives a good indication of where Peters is at on the CGT.

Question No. 2—Prime Minister

2. Hon PAULA BENNETT (Deputy Leader—National) to the Prime Minister: Does she stand by all her Government’s statements, policies, and actions?

Rt Hon WINSTON PETERS (Deputy Prime Minister) on behalf of the Prime Minister: Yes.

Hon Paula Bennett: Does she agree with comments by the Rt Hon Winston Peters in regards to capital gains tax that, “They won’t work in this country. They won’t work in any other country. They never have worked.”?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, the responsibility of the Prime Minister is for comments made by Ministers when they were Ministers, not beforehand. And, on behalf of the Prime Minister, I should not have to tell that member that.

Hon Paula Bennett: Does she agree with comments by the Rt Hon Winston Peters that, “You can’t possibly go into an election saying, ‘My tax policy will decided by a committee.’ “?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, for the second time now, I am not responsible for comments made by members of Parliament before they held a ministerial warrant under my premiership. That’s the substance of the matter and whether she agrees or not here’s the fine point about a democratic constitutional Government: that is, we’re going to consult with the people of this country in the next two weeks. [Interruption] I tell you what we can trust: somebody that hasn’t got a massive vested interest in this case, somebody that hasn’t got a massive vested interest in property, and is not now thinking about the country but just her narrow, selfish, egotistical self.

SPEAKER: I am going to remind the Deputy Prime Minister that he is speaking as the Prime Minister.

Hon Paula Bennett: No, no, let him go. Does she agree with the comments by the Deputy Prime Minister just yesterday who said, “The farming community, they are in for the long haul and there is no way a capital gains tax would have any effect on them at all.”, when today’s report says it will cost farmers $700 million a year?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, I have read the Deputy Prime Minister’s comments on the farming show. I know that he comes from a seriously agrarian background and understands the long-term ownership aspirations and intergenerational aspirations of farming families around this country, and not one of them who aspires to that will be affected by any capital gains tax.

Hon Gerry Brownlee: That’s not right. That’s not right. Read it.

Rt Hon WINSTON PETERS: No, I’ve done some work in my time, son, not like you.

SPEAKER: Order! The pair of you.

Hon Paula Bennett: If the Prime Minister is correct in her comments, then why on earth would they be saying that it would cost $700 million a year if a capital gains tax is applied to farms?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, there is the rub. Who is saying that and what do they mean by “if”? I mean, the criteria would be whether or not this is an expanded tax, and at this point in time it is not. It’s merely a report with a number of options—all 99—and what I’d like to know on behalf of the Prime Minister is: how come they had only four hours to study this and yet had already put out their views before the report came over their desks?

Hon Paula Bennett: Does she agree with the comments by the Hon James Shaw recently who said, “The only question we should be asking ourselves is: do we deserve to be re-elected if we don’t.” with regards to implementing a capital gains tax?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, that is a fact, and I’m glad about that. This is the first fact I’ve heard thus far in question time—that Mr Shaw said that. Mr Shaw’s a visionary Minister and is looking to the full debate and discussion that’s going to take place over the next eight weeks. Why don’t we all show some patience and be prepared to consult with the public of this country, the businesses of the country, rather than give your own narrow venal views.

Hon Paula Bennett: Can she confirm that any changes as a result of the recommendations in the Tax Working Group’s report will be revenue-neutral?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, it’s very difficult to come to a report—

Hon Paula Bennett: Grant just told you to say that you haven’t made any decisions.

SPEAKER: Order!

Rt Hon WINSTON PETERS: Unlike that member, doesn’t need instructions, able to think for himself, doesn’t need a speech writer, not embarrassed by being shown up every day—no. On behalf of the Prime Minister, the Prime Minister and her colleagues are not going to come to a decision until they have had the full consultation. And I must say, the most interested person in this is the Minister of Finance—the consultation process—and when that consultation is finished, we will share with the public our findings.

Hon Paula Bennett: You got that right.