CTG complicated, complex and costly

September 3, 2014

Prime Minister John Key floored David Cunliffe last night when he couldn’t answer whether or not Labour’s capital gains tax would apply to homes owned by trusts.

After the debate he said it wouldn’t but that’s no what the policy says:

David Cunliffe’s inability to answer the most basic questions about Labour’s proposed capital gains tax underlines key problems identified by successive tax reviews, National Party Finance Spokesman Bill English says.

“David Cunliffe’s failure to explain how he would implement a new capital gains tax, which has now been Labour policy for more than three years, will leave many thousands of New Zealanders confused and uncertain,” Mr English says.

“Nowhere in Labour’s capital gains tax policy does it exclude family homes owned by trusts. In fact, Labour actually says: ‘We will ensure trusts are not used as a means of avoiding a CGT’. David Cunliffe cannot have it both ways.

“And now Labour is trying to say the test for whether a capital gains tax applies is not whether a trust owns the property, but who lives in it. That would require Inland Revenue to confirm the living arrangements of householders in deciding whether the tax would apply.

What if there are adult children paying rent?

What if there is a boarder?

What if the boarder is a relative, for example an elderly parent?

Would it make a difference if the relative lived in a granny flat?

Would it make a difference if someone living in the granny flat wasn’t a relative?

What if there’s more than one family in the house?

“This latest confusion follows Labour previously making contradictory claims about whether the KiwiSaver accounts of 2.3 million New Zealanders would be exempt from their new tax. They now claim they would be exempt, but this is not reflected in their policy or their costings.”

Mr English says Labour’s proposed capital gains tax was already full of holes, applying only to only a quarter of the housing market, but to every New Zealand business and farm.

“All of this underlines what tax experts and independent reviews have said over the past 20 years. Implementing an extra capital gains tax would be much more complicated and confusing in practice than it appears in theory.

“By contrast, National’s clear economic plan is successfully supporting higher wages and more jobs. It is steering New Zealand back to surplus this year and ensuring government spending is invested wisely to deliver better results.

“The five new taxes promised by Labour and the Greens would stall the New Zealand economy and cost thousands of jobs.”

People who trade in property or shares already pay taxes on the capital gains.

Introducing Labour’s CTG would add cost  and complexity to the tax system which wouldn’t be justified by the money raised.

Labour wants to introduce a CTG and  four more taxes for the worst reason – so it can spend more.

The best way to increase the tax take is through economic growth which enables businesses to make bigger profits, increase jobs and wages.

The worst way is to increase tax rates and add new taxes which add complications, complexity and costs and put a hand brake on economic growth.


National working for and in the south # 19

September 3, 2014

Fantastic Fact # 19:


Best places to be born

September 3, 2014

Where is it best to be born?

A QUARTER of a century ago, The World in 1988 light-heartedly ranked 50 countries according to where would be the best place to be born. Then, America came top (see chart on left). Now the Economist Intelligence Unit has more earnestly calculated where would be best to be born in 2013. Its quality-of-life index links the results of subjective life-satisfaction surveys—how happy people say they are—to objective determinants of the quality of life across countries. Being rich helps more than anything else, but it is not all that counts—things like crime and trust in public institutions matter too. In all, the index takes 11 indicators into account. Some are fixed, such as geography; others change only very slowly over time (demography, social and cultural characteristics). . .

New Zealand is 7th.

Being rich isn’t all that counts but it helps more than most.

This is why National puts such strong emphasis on the economy – not as an end in itself but as the means to better economic, social and environmental outcomes for New Zealand and New Zealanders.

 


Of course it’s the economy

September 3, 2014

The latest Roy Morgan poll identifies economic issues as the most important in New Zealand:

 Just three weeks before NZ heads to a National Election, Economic issues (41%, down 3% since May 2014) are still clearly the most important problems facing New Zealand however the biggest problems facing the World today are War & Terrorism issues (35%, up a huge 15% since May) now ahead of Economic Issues for the first time ever according to the latest Roy Morgan Research conducted in July and August 2014.

New Zealand views on Problems facing New Zealand
When asked about the most important problem facing New Zealand, 41% of New Zealanders mention some kind of Economic issue. This is down 3% since May 2014 but still well ahead of Social issues (24%, up 3%), Government/ Public policy/ Human rights issues (19%, up 1%) and Environmental issues (6%, down 2%). . . .

Of course it’s the economy and economic issues that matter.

Only if the economy is growing can we afford the first world social services and infrastructure we need and the only way to make funding for these sustainable is with sustainable economic growth.

National’s policies are sustainable, Labour/Green/New Zealand First/ Internet Mana ones aren’t.

 

 


Five more taxes

September 3, 2014

Three years ago John Key asked then-Labour leader Phil Goff to show him the money and he couldn’t.

Last night the Prime Minister asked Labour’s current leader David Cunliffe if people who’s home is in a trust would have to pay a capital gains tax and he wouldn’t answer.

If it would it would hit more than 200,000 families.

There is no tax advantage for having a home in a trust but people use trusts for other reasons.

Even if homes in trusts wouldn’t be hit, farms and businesses would be. That would impose extra costs and reduce profitability.

The PM asked Cunliffe if New Zealand already has a CTG, he said no.

The PM responded that he knows the tax code and we do.

He also pointed out that a Labour/Green government would add five more taxes.

That’s a big point of difference.

National will continue to manage public spending well and let people keep more of their own money; Labour and the Green Party would tax more so they can spend more.

 

We're with John. #teamkey #keyvcunliffe


Line of the night

September 2, 2014

From The Press leaders’ debate:
John Key is wiping the floor in tonight's Leaders' Debate. We can't afford a Labour Greens coalition.


Press leaders’ debate

September 2, 2014

The Press leaders’ debate will be live streamed here from 7pm tonight.

It's #KeyvCunliffe. Tonight. 7pm. Live streaming at stuff.co.nz

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