More than half of New Zealand does not support CGT

It’s official. Most New Zealanders do not want a capital gains tax (CGT). My article yesterday made the point, raised by Chris Trotter, that New Zealanders operate on a deferred gratification system, where many people work hard all their lives, expecting a tax free capital gain at the end of it. CGT will bring an end to this aspirational system and will damage the economy irreparably.

Now we have confirmation that more than half of New Zealanders do not want a CGT… and that includes many Labour voters. quote.

A Newshub/Reid Research poll shows that 54 per cent of New Zealanders would not support a decision to impose such a tax.

The poll numbers show that just 32 per cent of New Zealanders would support a CGT, with 14 per cent saying they were unsure. end quote.

You can safely bet that a fair chunk of the undecided respondents will come down on the ‘No’ side as well. That means that roughly 60% of New Zealanders are opposed to the tax. quote.

But yesterday, Revenue Minister Stuart Nash said he thought a CGT was about creating “fairness, balance and integrity” in the tax system. end quote.

Taxing the same people over and over is fairness, is it? That is not my definition of the word. quote.

But the poll numbers show that even Labour supporters are divided on the issue, with 44 per cent saying they would back a government decision to implement a CGT.
But 42 per cent said they wouldn’t, with the remaining 14 per cent saying they didn’t know.

A newspaperend quote

Again, if half of the undecided respondents decide against the tax, that is 49% of Labour voters opposed to the tax. quote.

Perhaps unsurprisingly, just under three-quarters of National supporters said they would not support a CGT ? 19 per cent said they would. end quote.

One good question for the government would be for them to show just one country in the world where CGT has done what it was sold to do? which is to arrest declining housing affordability. Australia has had a CGT for years. It took about 15 years before it gathered any significant amount of revenue, and has had no effect on housing affordability whatsoever. This is because, as in New Zealand, the family home is exempt from the tax, meaning that people can sell productive assets which will be subject to the tax and buy bigger and better family homes, which are not.

The above photo shows Jacinda supposedly listening to someone in her audience, but it is clear that she is not listening to voters… not even to her own voters. Capital Gains Tax will destroy the aspirations of hard working New Zealanders. It discourages investment by reducing eventual returns on assets. It also destroys incentives to dispose of businesses at the right time, because of the anticipated tax bills. This means that some businesses will suffer as a result of not being sold, but rather run down because the owners do not want to pay the tax. It is madness, but it will happen.

Jacinda, Grant Robertson and Michael Cullen say that Capital Gains Tax is all about being ‘fair’. I say it is all about destroying aspiration and hard work. A very interesting battle is about to start. The TWG report is to be released to the public today. Watch this space.