Anyone tuning into Q+A yesterday in the hope of finding a good reason to vote for Labour would do would have been disappointed after listening to David Shearer.
” Well, what we had been saying before is a whole programme of economic development, capital gains tax, and in the short term-
. . . Well, what I’m saying is that what we need to do is to grow the economy in a way that it’s not growing at the moment, and we’ll be talking about Tiwai Point in a little while…one of the big problems about – no, no, let me finish – one of the biggest problems about that is that the exchange rate is so low that we’re seeing many of our businesses actually going out of business because they’re not being able to succeed. We’re not putting our money in the profitable sector; it’s going into the property market because we don’t have a capital gains tax that will help us direct money into those areas. And if you’re wanting to raise money, then at least put money into businesses- invest in businesses through the incentives of capital gains, and that brings, obviously, money into the government as well.
The low exchange rate was a slip of the tongue. The capital gains tax wasn’t and increasing tax is not going to help economic growth.
Wood’s final question was was what Labour would do for a 26 year-old woman living in Auckland earning $65,000 a year, paying off a student loan and renting.
To which he replied:
Well, two things – first of all, we would have a healthy home guarantee to make sure that where she’s living, in the rental accommodation that she’s living in, is actually up to scratch; it’s both heated and it’s insulated. The second thing that we would do is we’re building 10,000 houses, affordable homes, a year, and that would enable her to have an opportunity to get on to the housing ladder. So there are two specific things that I believe that would help that case.
That’s at best underwhelming and would be even less attractive with a capital gains tax which has done nothing to stop house prices rising steeply anywhere else.