Rob Hosking on Labour’s capital gains tax gamble

by Cameron Slater on August 24, 2017 at 9:30am

Labour’s new willingness to talk about capital gains tax shows how confident the party is getting that it can win on September 23.

Capital gains taxes have always been regarded as a “third rail” of New Zealand politics – touch it and you fry, politically.

Labour had a capital gains tax in its 2011 and 2014 election manifestos. It was regarded as one reason the party lost those elections, although there were myriad factors contributing to those defeats.

Former leader Andrew Little certainly believed it was a big factor: There were too many would-be Labour supporters with an investment property as part of their retirement savings plan who did not feel they should pay tax on the capital gain from that investment.

Nothing reveals just how much weight Labour is putting on “the Jacinda Effect” than its willingness to talk about a capital gains tax again.

It believes Ms Ardern’s appeal can overcome public resistance, in much the same way former Prime Minister John Key’s appeal overcame public resistance to selling shares in state owned enterprises, or to rises in GST.

Labour’s front bench has gone from refusing to discuss the idea, saying it would leave all that detail to a working group, and then putting it to New Zealanders in 2020, only a week ago, to now saying it will bring in a capital gains tax in its first term.

There isn’t any detail. Labour says it will leave all that stuff to a tax working group but will accept that working group’s recommendations.

Labour are refusing to talk detail on anything.  They remind me of the stereotypical consultant that tells you how good it’s all going to be, but once the sale is closed, he disappears and bunch of incompetent workers move in with the impossible task of delivering on promises they never made.

Labour are distracting the media with different non-essential angles on a daily basis.  A republic, for crying out loud…  thing is, while the media is reporting on Jacinda’s Brain Fart du jour, they’re not actually digging deeper into what was proposed or promised days ago.

And when it comes to policy detail, that will all come after the election.   Once the anonymous and amorphous ‘working group’ have decided what is good for NZ.

We really seem to be electing a working group, but we’re not allowed to know who they are, what their qualifications are, what their history is, or that they aren’t just Labour people in the first place.

It will be interesting to see who Labour points to being in that working group: You can probably bet that anyone on previous working groups on the issue will be given a big miss.

You never put a working group together that won’t deliver the answer you wanted in the first place.

All this working group is right now is an excuse for Labour not to get tripped up on policy detail.   As you will recall, most policies over the last 6 years haven’t survived for more than 48 hours, frequently failing on basic maths alone.