Finance Minister Bill English signalled on TVNZ7’s that the government is considering changes to property taxes which may result in some form of capital gains tax.
I have mixed views about that but a bigger concern about the whole debate on how the government’s income can keep up with its expenditure.
Increasing income, whether it’s by taxes, dividends from SOEs or charges for services, is one part of the equation. Reducing expenditure is another.
But the best way to increase public income is to increase private income ie the amount everyone earns.
That requires sorting out the things which are holding individuals and businesses back.
Or is that too simple?
P.S. Adolf was at the filming of the programme and gives his views on it at No Minister.
November 4, 2009 at 10:26 am
I didn’t get the impression that there was any wish to increase the tax take but rather to take out some of the tax driven incentives for speculative investment in houses and farms.
My recollection was that Mr English ruled out a CGT on personal residences but ruled everything else in, at this stage. Of course, this stage is ‘consideration.’
You can view the programme at any time on the TVNZ website at ‘TV on demand.’
November 4, 2009 at 10:42 am
I was happy enough with the programme as far as it went. However, once there’s a clear enough signal that we are through the recession and jobs are stabilising.. we need to get in and bring Govt spending down as a proportion of GDP from close to 40% to close to 30%.
Thats when it gets hard.
JC
November 4, 2009 at 11:06 am
English was always going to be cornered on CGT. Spouted the party line – we will look at it – not as Espiner suggests it is a happening thing.
The issue I take out of it is, like JC says, bringing the spend down. JC is possibly suggesting lift GDP so the spend drops to around 30%.
My take is gut the spend by implementing a proper tax schedule and stop tinkering at the edges with likes of CGT. As one loophole is closed, another will open. CGT is already covered and a rental business is like any other business.
The NATs have no intention of reducing spend, they have said all along tax changes must be fiscally neutral. Therein lies the problem. A worldwide recession opportunity to gut government spending on all fronts has slid through their hands.
November 4, 2009 at 12:12 pm
pmofnz,
“JC is possibly suggesting lift GDP so the spend drops to around 30%.”
Sadly, thats what I do on the rare occasions I do a personal budget
However, a nation can’t really afford to do that.. it has to assume the worst and cut real costs. What we currently have is a steak appetite on a luncheon sausage income.
JC