Q+A – new poll plus Colmar Brunton interview

Q+A this morning will have the first Colmar brunton polls results since the election, plus an interview on Colmar’ Brunton’s changed methodology (which may make poll comparisons difficult):

We’ll have the results of our Colmar Brunton political poll – which political party will get an early Christmas present?

Jessica Mutch will also interview Jason Shoebridge – the CEO of Kantar Insights, the parent company of Colmar Brunton. He’ll talk about why Colmar Brunton has changed its methodology for its TVNZ political polling.

Colmar Brunton are now polling 50% mobile phones.

The poll with have some curiosity value.

  • National 46% (election 44.4%)
  • Labour 39% (election 36.9%)
  • NZ First 5% (election 7.2%)
  • Greens 7% (election 6.3%)
  • TOP 1% (election 2.4%)
  • Maori Party 1% (election 1.2%)
  • ACT NR (election 0.5%)

So an unusual situation where the leading party in Government remains the second most popular party by a clear margin.

NZ First should be concerned to see their support slipping.

They are rounded to the nearest % (more detailed results are usually published a few days later), hence no result for ACT here.

Is New Zealand heading in the right direction?

  • Right direction 51%
  • Wrong direction 26%
  • Don’t know 27%

Preferred Prime Minister:

  • Jacinda Ardern 37%
  • Bill English 28%
  • Winston Peters 5%

Not surprising to see Ardern ahead there. She was already doing well, and has been getting more media coverage.

Ardern on The Nation

Jacinda Ardern featured in an interview on The Nation this morning. She has successfully stepped up another notch or two in her leadership role, however like most politicians is adept at avoiding answering questions she doesn’t want to answer.

Notably Ardern indicated that the Labour policy on reducing immigration stands, meaning Winston Peters hasn’t got the major reductions he sought votes from.

From @TheNationNZ:

She says it will be an “active” government that won’t leave things to chance.

“There is synergy between those agreements” of the agreements with NZF and the Greens.

“I’m ambitious that we eradicate child poverty” expects families pkg will lift 10,000s of children out of poverty.

“You will see change in that area” on the minimum wage, raise to $16.50 as a first step.

“We need to get started pretty quickly” on Kiwibuild.

Where is the sweet spot on immigration? “Labour’s policy remains absolutely unchanged” by the negotiations.

Ardern says Labour wants to cease ongoing investment in irrigation scheme…

…but will leave existing irrigation arrangements in place.

Ardern says there will be a Climate Commission to guide the government, but not to bind them.

The climate change minister will not be in cabinet, but says it doesn’t devalue the position.

This will obviously be James Shaw.

“It’s for the Greens to explain why confidence and supply works for them” says Ardern.

Ardern says she’ll be reviewing petroleum block offers – it’s not where the future lies.

More when the interview and transcript is available.

Economist warning on global financial markets

ANZ economist Sharon Zollner was interviewed on Q+A on Sunday.

A stark warning came from ANZ Economist Sharon Zollner.

“I think it’s fair to say that some things are starting to smell a bit like 2007 out there in global financial market land”, she said.

Whilst she acknowledges there are “still plenty of tailwinds” to the so called ‘rock star economy’, she says, “a number of those tailwinds seem to be running out of puff.”

“Our major vulnerability, I’d say, is Auckland house prices – how stretched they are. And also consumer debt, mostly mortgage debt, is now at a record high relative to income.”

Video: Q + A – Food exports

Corin Dann and Sharon Zollner from ANZ discuss current exporters’ success in overseas markets

Transcript:

CORIN Statistics New Zealand released its latest stats this week showing that food prices had increased 3% in the year to September. That follows a 2.3% increase in the year to August. The main culprits? Dairy exports, butter, fresh milk, cheese and yoghurt, were all more expensive, which isn’t great for your household budget, but it is a sign of the good prices our food exporters are getting in their overseas markets. How long will that last?

It’s a good question for my next guest – Sharon Zollner, a senior economist at ANZ Bank.

That is one bright spot, isn’t it, for the economy – that our export prices have held up pretty well recently, haven’t they?

SHARON Yes, that is true, and they’ve held up better than hard commodity prices, for example. So the price of our main dairy export, whole milk powder, is holding up better than iron ore, for example – Australia’s main single commodity export. So that’s been showing up in our cross rate.

CORIN In saying that, though, what’s the outlook for the next government, as they come in and they’re confronted with their first briefing from Treasury on the state of the economy. It is looking a little softer going forward, isn’t it?

SHARON I think that’s probably fair. Yes, the summary would probably say the economy’s doing rather well and that’s still plenty of tailwinds, and that is true. But a number of those tailwinds seem to be running out of puff a little bit at the same time – not in terms of necessarily falling, but in terms of their growth flattening out a little bit.

CORIN So, that’s your– Obviously, strong immigration, tourism, construction – the big three. They all– Is the outlook for them all coming off a little bit?

SHARON A little. It’s flattening off. The housing market is another one I would add to that list. Obviously, it’s tied in with construction. House prices are actually falling in Auckland at the moment.

At the moment, we’re seeing consumers remaining remarkably resilient, at least when you survey them about how they’re feeling, how they’re– about their own finances, about the economy as a whole. They sound very confident, but what we’ve actually seen is some weakness in actual spending, so maybe they’re not putting their money where their mouth is.

CORIN Talk to me about housing markets. So, there will be some people at home, and I know they will be thinking, “Oh, it’s the election. It’s the uncertainty of an election, and it’s all going to bounce back into life. We’ll get its late-Spring bounce.” Is that going to happen?

SHARON I’m sceptical. Auckland house prices are very, very high relative to incomes. I mean, they’re world-beating on a metric you don’t really want to be leading the world in, and that’s a real risk for the economy, and I think the LVR restrictions, the restrictions on high loan to value ratio lending for investors have really made a big difference.

We’ve seen investor lending pull back sharply. At the same time, the banks are also pulling back on that lending, and it’s not clear that that’s all going to free up any time soon.

CORIN So why are the banks–? I notice two- and three-year fixed mortgage rates are coming down. Is there a bit of a mortgage war starting up in that space? What’s going on there?

SHARON I think things have eased up a little bit. It’s very clear the Reserve Bank is on an extended holiday. We’ve pencilled in an OCR hike in the second half of next year, but it’s in a 6B pencil. It’s really with an eraser on the end. It’s not a strong-conviction view. So, you’ve got monetary policy on hold.

You’ve got global funding costs have stabilised. And now I think banks are starting to compete a little bit more for some of that mortgage lending.

CORIN I wonder if the next government – it’s going to be New Zealand First flavoured regardless of what shade it is. But there is going to be some spending promises, and it would imply that we might see some more spending from a government – let’s call it ‘a government’. How is the economy likely to respond to that? Is that actually going to be, perhaps, welcomed? When you look at the Reserve Bank governor, he’s probably looking for a bit of inflation, isn’t he?

SHARON Yes, but what we’ve seen in recent years is that more activity hasn’t necessarily flowed in to more inflation. So that whole model that the inflation targeting is based on, that’s stronger than sustainable activity leads to stronger inflation, and you can kill two birds with one stone by raising interest rates – that model seems to have broken. It’s not just in New Zealand. It’s around the whole world.

And that’s a conundrum from monetary policy everywhere. But it is certainly true that if some of the other drivers of activity are coming off, then that’s not bad timing for a little bit of a fiscal boost, perhaps.

CORIN Do we need…? Is there, sort of, an amount that we need? Or is it just… Will the economy roll with it?

SHARON Yeah, the economy does its own thing to a large extent. I think there’s a bit of a tendency for people to give the government more credit and more blame than it perhaps deserves for the business cycle, which is more driven by exchange rates, interest rates, commodity prices, more than actual fiscal policy.

Of course, government policy is very important for the long-run, in terms of education and productivity and competitiveness, and all those sorts of things that determine your long-run trend, sustainable growth rate. But in terms of the business cycle, it’s really not an easy thing to try to steer.

CORIN Are markets, foreign investors, businesses, whatever, going to be freaked out if there is radical change to our monetary policy settings? Personally, I don’t think there will be radical change, but, I mean, is that a risk?

SHARON If we did see radical change, then, yes, I think there is a risk that markets could do a bit of a double-take. I think, in some sense, there’s a bit of an expectation that New Zealand is no longer the rock star, that we might be coming off that particular pedestal, so any negative news might have a larger impact than otherwise. I think perhaps people are looking for a reason to sell the New Zealand dollar, rather than buy it at the moment, just because the rest of the globe is doing better, and consistently so.

The range of growth rates around the countries in the world is very narrow at the moment – unusually narrow. And it’s looking like New Zealand, just as we led into the upswing, may be the first to peak in terms of growth rates as well.

CORIN Let’s talk about some potential shocks that this new government could face. We’ve obviously got– There’s always a risk around China and its debt, and, I guess, the US stock market, including our stock markets, have had a huge run. Are there some sort of, you know, scary risks out there that we need to think about?

SHARON Certainly, there are. I think it’s fair to say that some things are starting to smell a bit like 2007 out there in global financial market land. ‘There’s been a bull market in everything,’ as the Economist called it.

And that’s completely understandable, because the price of borrowing money has been at record lows for a very long time, and so the price of anything you could borrow money to buy has been pushed up, whether that’s equities, commercial property, residential property, collector cars, fine art – you name it, it has all benefited from this extreme monetary policy stimulus.

CORIN Just not wages?

SHARON Just not wages, not inflation. It’s been a bizarre time, but it is probably fair to say that the quality of the growth that we’ve seen since 2008 has not been great. It’s been fuelled by debt and by leverage. And at some point, that debt has to be paid back.

CORIN Well, the question then is – how well prepared is New Zealand for that?

SHARON That’s an interesting question. In some ways, we’re in better state than we were in 2007. In particular, our current account is very contained. We haven’t got–

CORIN Our debt to the world, if you like?

SHARON In a way, yeah. The cumulative addition to the debt in our debt to the world. Our net foreign debt is low. It’s lower than Australia. It’s much lower than it was in 2007. But our major vulnerability, I’d say, is Auckland house prices – how stretched they are. And also consumer debt, mostly mortgage debt, is now at a record high relative to income.

So the best-case scenario is that that dampens growth going forward in a very smooth, even fashion. The worst-case scenario is that everybody’s tomorrow arrives all at the same time and consumers go into something of a panic about their mortgage payments.

CORIN So, we need Auckland house prices– Or the next government would quite like Auckland house prices just to sit flat and for wages to catch up – that’s the best-case scenario?

SHARON It is. It’s not historically what tended to happen, but that is certainly–

CORIN So what’s historically tended…?

SHARON Well, real house prices, at least, tend to– Well, they go up, and they go down.

CORIN What are you forecasting for the Auckland housing market, then?

SHARON Well, we don’t forecast Auckland house prices specifically, but I guess, unless you get some sort of negative shock, then, yes, they should hold up OK; unless we get migration dropping sharply or a big outflow of people to Australia.

But what’s happening there with the Australian government making it increasingly uncomfortable for New Zealanders living over there, would suggest that we may see a change in the historical drain that we’ve had to Australia, because, for example, parents with children who are approaching university age may not be able to afford to stay there.

CORIN That’s interesting, because that means that even if a new government was to put curbs on immigration, they can’t stop New Zealanders or Australians coming back here, can they? Won’t affect that flow.

SHARON No, that is true. It is very difficult, actually, to target any kind of net migration number, because New Zealand passports come and go as they wish, and there’s a lot of New Zealand passports in Australia, for example.

CORIN So, the government’s in reasonably good position, obviously, with its debt to deal with any potential crisis, They’re in reasonable– That’s right, isn’t it? Not too bad, are they, in terms of government debt?

SHARON Yeah.

CORIN But the Reserve Bank doesn’t have a lot of room to move this time around if we were to get in to a lot of trouble, does it?

SHARON No, and our official cash rate is at record lows. It’s lower than it was at the absolute trough of the recession following the global financial crisis, which is quite a remarkable statistic, but in that kind of situation, but that doesn’t, unfortunately, mean that our situation is any better.

It just means we’re all in the same boat, but last time, when the GFC hit, the OCR was over eight, and we cut it down to two. So we cut it by 600 basis points. Now we could cut it maybe 100. And I don’t think we could do the kind of money printing, quantitative easing…

CORIN Can’t go below zero.

SHARON …that¬– No. I think we’d be laughed out of town as a small, very risky– well, nation that is seen as risky, because we’re a small commodity exporter. We’re not the nation’s default asset like the US Treasury bond market. We don’t have that kind of power.

 

 

Is MMP working?

Q+A is asking ‘is MMP working?’

Of course MMP is working – it just doesn’t work as well as some want it to work, and not as well as opponents of the system want.

First Past the Post worked, but quite poorly in some ways. The people were obviously unhappy with some of the results and practices, and voted for change.

We have now had seven  MMP elections, all with varying results.

There is no doubt we have a more representative Parliament, with more female MPs and much more ethnic diversity.

The grumbling has arisen right now because we have government in limbo, waiting for the final election results. This is the third time (out of seven) that we have had to wait weeks for things to be worked out.

In the meantime the country keeps ticking over successfully under a caretaker government. There’s no reason why we couldn’t operate reasonably well under a caretaker government for years. Voters don’t want governments that keep making major changes.

There’s certainly changes that could be made that would improve MMP, in some ways, but introducing different risks.

The critical thing is that our form of democracy works without too many problems, and no major problems. It’s not broken, but could be tweaked.

Q+A: Ardern, English, Shaw & Peters interviews

A good chance to see how the leaders of the four largest parties are shaping up and holding up as the campaign heads into it’s last week.

Which party will form New Zealand’s next Government?

Political Editor Corin Dann interviews the leaders of the four biggest parties: National leader Bill English, Labour leader Jacinda Ardern, Green party leader James Shaw and New Zealand First leader Winston Peters.

Host Greg Boyd is joined on our panel by Dr Claire Robinson, Robert Reid and Fran O’Sullivan.

Why do they keep including obviously biased people in their panel?

I hope they give disclosure about Reid. He is general Secretary of First Union, and has openly supported Labour policy – Press Release: First Union

Labour’s employment policy gives working peope something to vote for

The 27,000-strong FIRST Union has described Labour’s newly Employment Policy as giving its members something to vote for.

“FIRST Union represents a large number of low paid and vulnerable workers,” said Robert Reid, General Secretary of FIRST Union.

“The current employment relations laws are stacked against low paid workers and their unions meaning many working people are unable to make ends meet from one week to the next.

“It is pleasing to see the Labour Party putting forward policies that will reverse all of the anti-worker changes made to the Employment Relations Act by the National Government over the last 9 years, as well as promoting longer term policies that will prevent the race to the bottom on wages.

“Together with Labour’s health, housing and education policies this employment relations policy shows a stark difference to the policies of the current government that have failed working people over the last 9 years,” said Reid.

English started under pressure but became more assured as the interview progressed.

Ardern look far less confident than before, perhaps a hard campaign is catching up on her.

James Shaw throws a CGT spanner in Labour’s works:

Interestingly no poverty in his priorities.

And a twist from Winston:

Q+A – environment debate

All of Q+A this morning will be a debate on the environment.

The way we care for our environment has emerged as a key election issue – especially the state of some of our polluted waterways. Q+A has an hour long environment debate with 7 candidates on Sunday. Which party wins your environment vote?

Scheduled to take part:

  • David Parker (Labour Party) – Spokesperson for Environment, Water
  • Scott Simpson (National Party) – Minister for the Environment
  • James Shaw (Green Party) – Spokesperson for Climate Change
  • Marama Fox (Maori Party)
  • David Seymour (ACT Party)
  • Damian Light (United Future Party)
  • Winston Peters (NZ First Party) – Spokesperson for everything

Denis O’Rourke is the NZ First spokesperson for climate change and also for the Environment but has been shunted down to 13 on their party list. Peters has chosen to take part in a debate for a change.

Q+A: health debate – Coleman & Clark

On Q+A this morning: Who has the best policies for our health system?
Watch our health debate – Political Editor Corin Dann with Labour’s Dr David Clark and National’s Dr Jonathan Coleman.

Image may contain: 2 people, people smiling, glasses

Coleman and Clark also featured on The Nation yesterday (repeated this morning at 10:00 am).

Labour on health:

Health

Additional $8 billion investment in health over four years

See the details in our fiscal plan here.

Cut GP fees by $10 a visit with $8 GP visits for Community Services Card holders

From 1 July 2018, Labour will lower the cost of GP visits by $10 through:

  • Lowering the VLCA fee cap by $10 to $8 for adults and $2 for teens (under 13s are already free), with a funding increase to VLCA practices to cover this
  • Increasing government funding for all practices that lower their fees by $10, low (show all)

Continue reading →

National responded to Labour’s $8b:

Labour’s mythical $8b extra health spend

The Labour Party has been trying to pull the wool over everyone’s eyes with its mythical $8 billion extra health spend, National Party Health spokesman Dr Jonathan Coleman says.

“The ‘$8 billion more’ health spending argument is smoke and mirrors. They are simply rolling out normal baseline increases and comparing them with a mythical situation of an alternative government that apparently doesn’t add a single dollar to health expenditure for four years. That’s laughable and has simply never happened,” Dr Coleman says.

“The Labour massive extra spending myth also shows up in the amount of new budget money they propose to add each year. Labour is planning to add less in health for each year in the next four years than the National Government has added in the last budget alone.

National new budget operating spend (actual):

  • 2017/18        $879 million

Labour proposed new budget operating spend:

  • 2018/19        $847 million
  • 2019/20        $689 million
  • 2020/21        $826 million
  • 2021/22        $795 million

“The reality is every government makes big increases to the health budget. Of course it’s all about what you do with the money rather than the money itself. And the National Government has an absolute focus on lifting results from the health investments we make.

“The irony is that whether you measure by our respective history of results or just the dollars, when you compare Labour’s proposed plan with National’s track record New Zealanders would receive less from the health sector under Labour.”


Q+A: education debate – Kaye & Hipkins

This morning on Q+A: Who has the best policies for our students and schools?
Watch our education debate – Political Editor Corin Dann with National’s Nikki Kaye and Labour’s Chris Hipkins.


Q+A – Adams v Twford on housing

 

Housing is a major issue for this election. Q+A has another debate between Amy Adams and Phil Twyford.

 

This rehashed the same old housing issues and I doubt whether it changed much in the debate.

Adams tried to emphasise things that are being done by the Government to alleviate a serious housing issue, and tried to divert from the problems that National were too slow to react to.

Twyford repeated his usual one lines, a number of which are blatantly misleading, and lacked in details about how Labour would deal with it. He said the problem was ‘simple’, which is nonsense.

Labour’s capital gains tax plans

Labour’s campaign plans for a Capital Gains Tax seems to be to say how bad a lack of a CGT is, but not admit the intention to introduce one once they are leading government.

Housing spokesperson Phil Twyford on The Nation:

Lisa Owen: So is it Labour’s goal to get it down to that – about four times?

Phil Twyford: We want to stabilise the housing market and stop these ridiculous, year on year, capital gains that have made housing unaffordable for a whole generation of young Kiwis.

Lisa Owen: But in essence, you’re going to drop the value of houses, if you want them to be four times the price of the average income.

Phil Twyford: Well, we’re going to build through KiwiBuild. We’re going to 100,000 affordable homes.

Lisa Owen: I want to come to KiwiBuild in a moment. I just want to talk to you about the price.

Phil Twyford: That will make housing affordable for young Kiwi families. That’s our policy.

Lisa Owen: Well, do you need a capital gains tax to get that threshold down to where you would want it to be?

Phil Twyford: Well, we are going to shift the goalposts by taxing speculators. So under our plan, if a speculator sells within five years—

Lisa Owen: Yeah, that’s the bright-line. I am asking you about capital gains – a bit of a sensitive issue for Labour.

Phil Twyford: Not a sensitive issue at all.

Lisa Owen: So do you think we need a capital gains—?

Phil Twyford: If a speculator sells a rental property within five years, they will pay income tax on the capital gain.

Twyford keeps referring to taxing speculators. He must know that speculators and property developers who by and sell property with the intention of making a capital gain are taxed now.

From Inland Revenue “If you’re selling a residential property and one of your intentions when you bought the property was to sell it, then you’ll have tax to pay on any profit you make from its resale.” – http://www.ird.govt.nz/property/property-selling/selling-property.html

The bright line test (currently two years, Labour say they will increase it to five years) just makes it easier for IRD to enforce taxing capital gains.

Lisa Owen: Yeah, we know about the bright-line. What we don’t know about is a capital gains tax. So do you think that you need a capital gains tax to get house prices down to the ratios that you think are right?

Phil Twyford: Well, we think comprehensive tax reform is overdue in this country, not only to tilt the playing field away from real estate speculation

Lisa Owen: Last chance – capital gains tax?

Amy Adams: Answer the question, Phil.

Phil Twyford: In the first three years, we’re going to do a tax working group that will redesign the entire tax system.

So Labour are campaigning on “redesign the entire tax system” but generally avoid saying whether their intention is to include a more comprehensive capital gains tax.

The lack of pre-election clarity on Labour’s CGT intentions continued on Q+A yesterday. Grant Robertson repeated how ‘transparent’ Labour has been, and said Labour “won’t shy away from hard decisions”, but refused to be transparent about their intended decisions on a CGT.

Grant Robertson: It’s also about cracking down on speculators. We have to make sure that if someone’s flipping their third or fourth property within five years of of buying it then they’ll pay tax on that.

I would be very surprised if that example wasn’t already covered by current tax law and  IRD now. See Property tax decision tree – Is your property sale taxable? “To work out if the property you are buying or selling is taxable”.

Grant Robertson: “We’re saying that we’ve got to take some action both in terms of cracking down on speculators, building more affordable homes, and we will get better balance in our housing market.

Corin Dann: A capital gains tax. You need to clear up for us what exactly is the position here, because it’s, what’s going? Is there going to be a capital gains tax within side the next three years if you’re elected.

Grant Robertson: So we’ve been absolutely clear. We’re going to this election with a policy that says that if you sell off an investment property, not your family home, within five years, you will pay tax on that. That’s building on a form of capital gains tax that Steven’s government’s introduced.

What we’ve then said, and I’ve been saying since 2015, is that we will have a working group that will look at getting a better balance into our tax system, between how we tax assets, and how we tax income.

Labour wants ‘a better balance’ – that is, a change.

Corin Dann: Would you seek a mandate for that capital gains tax?

Grant Robertson: Just as the working group that Steven had in 2010, didn’t go back to the election and then increased GST, which he’d campaigned against, we will look at the outcomes of that.

It seems clear that Labour has intentions to introduce a more comprehensive CGT if elected (if the working group they appoint recommends it), before the 2020 election.

Corin Dann: That’s a change from Andrew Little.

Grant Robertson: It is a change from Andrew Little.

A significant change. In 2015 Little told The Nation: “Well, we won’t introduce it in our first term, and we won’t introduce any change that significant to the tax system, any material change to the tax system, without going to the people first and getting a mandate to do so.”

Grant Robertson: Let me be absolutely clear about this. We have a housing crisis. We’re not going to sit on our hands for years, the first term of government and not do anything about that. I want the experts to talk to us about that.

Steven, is it right at the moment that someone who goes to work every day, pays tax on every cent of their income, that someone who flips a property after owning it for three years doesn’t tax on that property?

Steven Joyce: Well actually…that’s actually taxed now. So there’s the news for you Grant, if someone actually buys a house, gets an income…

Grant Robertson: Why did you put a bright line test on it then?

See Govt to tighten tax on capital gains (RNZ)  on the budget announced in May- “Capital gains on residential properties bought and sold within two years will soon be taxed by the Government. Unlike the current regime, the new test will not rely on proving a seller’s intent to make a capital gain.”

Steven Joyce: That’s the absolute minimum, under the New Zealand law right now if you’re buying and selling houses for profit you must pay tax.

You know that’s not happening…

Steven Joyce: Well actually it is happening now, that’s the truth, if you go and have a look at Inland Revenue that’s the case.

But coming back to your point. So you’re saying a capital gains tax, is that on unearned capital gains? So when the value of somebody’s business goes up, or somebody’s farm goes up, this us why you don’t want to talk about it…

Grant Robertson: This is why we’re doing a working group.

Steven Joyce: I get that. So that’s why you don’t want to talk about it.

Grant Robertson: This is why…because we’re not going to shy away from the tough challenges.

Steven Joyce: So it could be on the business.

Grant Robertson: We’ve been absolutely clear. If we ever put a capital gains tax on it would not apply to the family home, but right around the world people do this to stop speculators in the housing market.

Turning to Joyce.

Corin Dann: Is it an equity issue, is it a fairness issue? People have made an enormous amount on capital, and income earners, the vast bulk of the population who are earning wages are not seeing anywhere near the gains of capital.

Steven Joyce: In terms of capital gains tax the answer to that question is it depends on what it is. If it’s an unearned capital gain, which is actually what a comprehensive capital gains tax is, ie if your house price goes up in value the tax man sends you a bill, or if it’s your business goes up in value the Tax man sends you a bill, or if your farm goes up in value the tax man sends you, that’s what a capital gains tax is about, that you get taxed on capital gains.

Corin Dann: So how is it that the OECD, the IMF, Treasury, the Reserve Bank, just about every mainstream economic organisation you can think of says New Zealand has needed a capital gains tax for years.

Steven Joyce: Yeah but they want it on the family home. That’s what they want.These are the theoreticians saying tax the family home, and tax them on the unearned capital gain every year, so you should get a bill at the end of the year, if your house has gone up a hundred thousand dollars you should get a bill for thirty thousand dollars or whatever your tax rate is for that unearned capital gain.

That’s never going to fly, Grant’s acknowledged that, but what he isn’t telling people…

Grant Robertson: exactly because we’re not proposing that.

Even if Labour’s working group recommends it.

Steven Joyce: …he’s not telling people whether it would go on their business or on their farm or on their second house…

Corin Dann: Well lets clear that up because it will come up.

Grant Robertson: What we want to do is to address the fact that we’ve got a huge imbalance in our tax system between hardworking people who go to work every day and pay their taxes and people who are speculating in the property market who don’t. We’re going to get the experts in. We’ve been transparent about this…

Steven Joyce: Have you ruled out small businesses?

Steven Joyce: Are you going to rule out small businesses?

Grant Robertson: …we’ve been transparent about this from the very beginning. In 2015 I announced that we were going to be having this working group. What we’re not prepared to do is shy away from hard issues, and that’s what Steven and his Government have done for nine years.

Steven Joyce: Are you saying that you won’t be taxing small businesses on their capital gains?

Grant Robertson: We are focussed on the speculation in the housing market.

Steven Joyce: Is that saying you won’t…

Grant Robertson: We’re focussed…because I actually want to listen to the experts

Steven Joyce: …so you won’t do farms?

Grant Robertson: I don’t want to shy away from these tough issues…

Steven Joyce: …will you do capital gains on farms?

Grant Robertson: This is about speculation in the housing market.

Steven Joyce: No I don’t think it is, because he’s refusing to rule it out.

 

 

Robertson keeps pushing for tax on property speculation, which is already taxable, but keeps refusing to say whether they will widen tax to capital gains on businesses.

Despite Roberton’s assertions that Labour is being transparent and won’t shy away from ‘the hard issues they are very shy about saying what sort of capital gains tax they want to introduce next term if they are in government.

I expect this to keep coming up through the campaign. Jacinda Ardern will need to be well prepared on this or Bill English will hammer her and Labour on CGT.