Cullen defends CGT

The debate around Capital Gains Tax (CGT) is fierce, and rightly so. As time goes on, the anomalies are becoming obvious and concerning. No one denies that the government should take time to consider the report and then come up with its own proposals, but it is also reasonable to expect the opposition and the media to highlight the discrepancies that the tax would bring about. It is supposed to all be about ‘fairness’ after all.

Michael Cullen, as chairman of the TWG, should have presented his report and then retired out of the limelight to allow the government to deal with the politics of the report’s recommendations. Cullen of course, is quite incapable of doing that and has made the very grave mistake of wading into the political arguments on the subject; thus demonstrating his own considerable political bias which is appalling for the head of a government working group… as if we didn’t already know his position. quote.

The Tax Working Group has now disbanded, its final meeting held and the group’s report passed to the Government, which is sitting, like a possum in headlights, working out what it will do.

Finance Minister Grant Robertson, Revenue Minister Stuart Nash and Prime Minister Jacinda Ardern have assiduously battled to say nothing of consequence about tax policy as debate on the topic rages.

This has raised questions of whether the Government is willing, or even able, to debate the proposals.
But Cullen, who is not quite a decade out of politics, remains in the game. end quote.

No he doesn’t and he should keep quiet. His job is done. quote.

Opposition leader Simon Bridges claimed on Friday that: “A capital gains tax would reduce retirement savings for an average earner’s KiwiSaver by $64,000 over the course of their working life”.

Cullen responded by insisting that the National Party had “failed to take into account the important TWG recommendations which would actually reduce (his emphasis) tax on most KiwiSaver accounts”. end quote.

Michael Cullen is wrong. The Kiwisaver accounts of people who earn less than $48,000 will be protected from losing value by the application of tax concessions, but if account holders earn more then $70,000, they will definitely lose out. quote.

These too are presented quite out of context. One of Cullen’s “recommendations” would be so expensive to the Treasury’s coffers (around $5 billion over five years) that the chances that they would be adopted by the Government are almost certainly zero.

Between politicians, this would simply be the fog of war. Either side is entitled to choose the details which back their case.

end quote.

Which is what Simon Bridges is doing. Michael Cullen, however, should not be doing anything. quote.

But, in this context at least, Cullen is not a politician. He is the chairman of a report which the Government now holds and can take it or leave it.

Was he right to intervene in the debate in this way?

On Tuesday, the former Finance Minister claimed the reason he responded to Bridges’ was that the Opposition leaders’ claims were “inaccurate and potentially misleading” and that unlike other commentators, Bridges’ statements were likely to be more widely reported. end quote.

He is adding nothing to the debate, and Bridges has the right to raise important issues. quote.

Cullen bristled at what he claimed was the suggestion that because a statement was made by National that he could not refute it.
“One is not castrated at the point of leaving Parliament.” end quote.

More’s the pity. quote.

But the fact is, Cullen is only commenting on the statements made by National. Although he was happy to name examples of stories on the impact of CGT as “silly”, Cullen’s only official response to any commentary on the report has been to attack a claim made by the Opposition leader, with a response which is also questionable.

The Government is free to adopt the strategy of sitting on the sidelines of the CGT debate until the coalition is ready to make its response.
But the sidelines are exactly that. Cullen’s intervention looks highly political.

If the Government is not ready to make the case for change, Labour’s grandees – especially those who hold official positions – should not be doing the political work for them.

Stuff. end quote.

Like Helen Clark, Cullen simply cannot help himself. Will these two socialist troglodytes ever head off into the sunset, as we all so desperately want them to?