After 18 months of waiting and a $2 million tax working group, National’s relentless opposition to a Capital Gains Tax has forced the Government to back down, Leader of the Opposition Simon Bridges says.
“While the Government has backed down on a Capital Gains Tax, there are still a range of taxes on the table. They include a vacant land tax, an agricultural tax and a waste tax.
“Prime Minister Jacinda Ardern says she personally still wants a Capital Gains Tax and that our tax system is unfair. New Zealanders simply can’t trust Labour when it comes to tax.
“The New Zealand economy has suffered while the Government has had a public discussion about a policy they couldn’t agree on. Put simply, this is political and economic mismanagement.
“Investment has completely slowed down while business owners worry what the future looked like. That has made New Zealanders worse off.
“Our economy was growing at four per cent two years ago – it’s rapidly heading down to two per cent. They have no economic plan to speak of at all because the Government has sapped the confidence out of small business owners and mum and dad investors.
“In the Government’s so called year of delivery, they’ve dropped their flagship tax policy.
“The big question remains, what are they doing to encourage the economy to grow?
“Unlike the Government, National has a plan when it comes to the economy. We won’t introduce any new taxes in our first term and we will index tax brackets to inflation. National believes Kiwis deserve to keep more of what they earn.”
National Party Leader Simon Bridges has thanked retiring MP Nuk Korako for his hard work and dedication to the National Party after he announced his retirement today.
“Nuk Korako has been a valuable member of our caucus. He is highly regarded by his local community, his colleagues and Iwi.
“Nuk was instrumental as chair of the National Party Māori Caucus in developing Māori capability within the National Party. He established the regional Kahurangi National Māori Groups and will continue this work.
“As Chair of the Māori Affairs Select Committee Nuk has made a positive difference in the lives of Māori, including 16 Iwi by helping to bring their Treaty Settlements to a conclusion.
“Nuk has been a supportive leader in his community following devastating events like the Port Hills fires and the Christchurch terror attack. He will be missed immensely.
“I am sorry to see him announce his retirement from Parliament but I know he will stay actively involved in his community and the National Party.”
The Government will this week report back on what it will do with a Capital Gain Tax, Leader of the Opposition Simon Bridges understands.
“The Government will take its decision to Cabinet tomorrow for sign off. National’s fierce opposition to additional taxes on New Zealanders has forced the Government to back down on many of Sir Michael Cullen’s recommendations.
“The Government will now only accept the ‘minority report’ which will mean a Capital Gains Tax on rental properties. But let’s not be fooled by this. Just because the Government isn’t kicking people in the leg, it doesn’t mean they should be grateful when it punches them on the arm instead.
“The Capital Gains Tax that Cabinet will sign off tomorrow will still be bad for New Zealanders. A Reid Research poll shows people don’t even support a Capital Gains Tax on property.
“Rents have jumped by $50 a week under this Government and a Capital Gains Tax on rental properties will push rents even higher. The Tax Working Group itself acknowledged that. Under National, the median weekly rent only increased by an average of $12 a year.
“The Government desperately wanted to tax businesses and farmers and is embarrassed to be backing down. No surprise then that it will cynically release the report on Thursday just before Easter, when most Kiwis are more focused on taking a break.
“New Zealanders should be wary and cynical about what the Government is doing. This is a Trojan Horse Tax because we know both Labour and Greens want to go further and they will if they get another term. This Government can’t be trusted on tax.
“National wants New Zealanders to keep more of what they earn. It’s not too late for the Government to drop a Capital Gains Tax completely. If they go ahead with this, we will repeal it.”
The 100+ ‘wellbeing’ indicators released by Stats NZ today are not achievable and will not improve the wellbeing of New Zealand families, Leader of the Opposition Simon Bridges says.
“These include far-reaching, immeasurable and deeply personal indicators such as spiritual health, sense of belonging, ability to be yourself, experienced wellbeing, hope for the future, locus of control and sense of purpose.
“It was easy for the Government to talk about ‘wellbeing’ when they first came into Government because the economy was growing, incomes were rising and there were 10,000 jobs being created every month.
“But the economy has started to weaken under their bad economic management. What will really improve the wellbeing of Kiwis is a strong economy and more money in their back pockets. Kiwis need access to a good education system, healthcare services and housing.
“In the past 12 months economic growth fell to just 2.3 per cent and economic growth per person has been flat for the past six months.
“As the economy slows ‘ability to be yourself’ and ‘locus of control’ won’t help pay the rent, buy the groceries or fill up the car.
“There are also major concerns with the Government entrusting Stats NZ to measure the immeasurable indicators. They’ve recently botched a Census, had to make significant upward revisions to GDP under National, produced volatile migration data and stopped counting how many Kiwis are leaving for Australia.
“The Government needs to stop distracting itself with unachievable wellbeing indicators and focus on what really matters for New Zealanders.”
National can reveal that more than 500,000 small businesses would be hit by the Government’s proposed Capital Gains Tax and no region of New Zealand would escape this damaging new tax, Leader of the Opposition Simon Bridges says.
“In the Waikato, for example, some 56,073 businesses would be at risk from a Capital Gains Tax, based on Stats NZ’s Business Demography figures, hitting everything from biotechnology and agricultural start-ups to packaging, food processing and data analytics firms.
“Some 29,187 Otago businesses would be caught in the extended tax web, ranging from tourism ventures to engineering firms, cancer diagnostics and computer graphics companies. Nationally, 569,907 businesses could be hit.
“Small businesses make up 97 per cent of all businesses but the Government is ignoring them and the damage it would inflict. In MYOB’s latest survey, more than two-thirds of them opposed a Capital Gains Tax. No wonder the economy is weakening, business confidence is near record lows and the Reserve Bank is considering rate cuts.
“It may surprise the Government that small businesses are unhappy because it isn’t listening. The Tax Working Group didn’t even count small businesses when it tried to estimate how much extra revenue the Government would take from a Capital Gains Tax.
“The Tax Working Group report says elements of the tax base including shares in private companies and intangible property such as goodwill ‘are not known and so are not costed’. That means it didn’t count small businesses or the value of their owners’ hard slog.
“Because the TWG did not count small businesses in its revenue projections, it is highly likely that a Capital Gains Tax will raise a lot more revenue than the $8 billion over five years it has projected.
“A Capital Gains Tax would hit kitchen-table start-ups, those wanting to raise capital and it would clobber business owners who want to sell up and retire. Before then they’d be hit with increased costs such as having to get their business valued.
“The message it sends is don’t bother starting a business because the Government will tax your efforts. Instead of discouraging our innovators and entrepreneurs we should be encouraging them to grow and create jobs.
“National believes New Zealanders should keep more of what they earn. We will fight the Government’s proposed tax grab every step of the way. We will repeal a Capital Gains Tax and we will not introduce any new taxes in our first term.”
This tax-happy Government is piling more costs onto New Zealanders like rising rents and it is only going to get worse with a Capital Gains Tax, Leader of the Opposition Simon Bridges says.
“New data out today shows the median monthly rent is up $50 a week under this Government, an annual hike of $2600. The median national rent has climbed to $450 a week from $400 when the Government came to power.
“This Government claims to be about fairness but its track record is anything but fair. A Capital Gains Tax is just its latest scheme for taking more money from the back pockets of Kiwis. This deeply divisive tax is bad for New Zealand families and will further slow our economy down.
“The Tax Working Group concluded that a Capital Gains Tax won’t help with housing affordability or high house prices as the Government had claimed and was likely to result in higher rents.
“A Capital Gains Tax would follow other bad Government policies that have contributed to rent increases including the extension of the bright-line test, ring-fencing of losses, more onerous and expensive regulation and the ban on foreign investment.
“Instead of looking for new ways to tax New Zealanders more the Government should focus on the quality of its spending and cut down on waste. We should be encouraging Kiwis to get stuck in and contribute to our economy, not discouraging them from trying to get ahead.
“National will repeal a Capital Gains Tax and we won’t introduce any new taxes in our first term. National believes New Zealanders should keep more of what they earn and don’t need ever more ways to be parted from their hard-earned dollars.”
Tax officials advised the Government 15 months ago that our small companies, start-ups and innovators were better off without a Capital Gains Tax, Leader of the Opposition Simon Bridges says.
“Even before Sir Michael Cullen and others were named to the Tax Working Group in December 2017, Inland Revenue officials told the Government that the absence of a Capital Gains Tax in New Zealand was ‘potentially advantageous to start-ups’.
“Not having a Capital Gains Tax is ‘advantageous’ to every Kiwi willing to give it a go by starting a small business and creating jobs. People who take risks with smart ideas and build something bigger than themselves shouldn’t be discouraged.
“Governments should encourage innovators because smart people will take us to a better future. We need people who take risks and stretch themselves because the ones who succeed create more jobs.
“The Government was also told that the lack of a Capital Gains Tax ‘indirectly incentivises’ people to put more of their own money into a venture because they have the chance of a better return when they sell. That could be somebody who wants to stop working, sell the business and retire.
“But the Government seems to have other plans. A paper prepared for the Tax Working Group last August shows the Government could use a Capital Gains Tax to claw back some of the cost of the R&D tax credit.
“National opposes the Government’s proposed tax grab. We will repeal a Capital Gains Tax and we will not introduce any new taxes in our first term. National believes New Zealanders should keep more of what they earn.”
14 Dec 2017 – Inland Revenue advice to Minister
Para 13. New Zealand does not have a comprehensive capital gains tax. This indirectly incentivises R&D as when a business ultimately decides to sell its idea, it is not subject to tax.
19 Dec 2017 – Inland Revenue advice to Minister
Para 9: A final point is that there is currently no capital gains tax, which is potentially advantageous to start-ups. This issue, however, is within the terms of reference of the Tax Working Group.
3 Aug 2018 – Advice prepared by Treasury and Inland Revenue to the TWG
Para 99: The proposed introduction of an R&D tax concession will subsidise business R&D that is performed in New Zealand. In this context, an ETCI may help to ensure that the Government shares in the additional returns from R&D as an ETCI would apply to the sale of start-ups or IP that was generated as a result of the R&D subsidy.
The Government can’t afford to be complacent about a slowdown in economic growth which will lead to fewer jobs and opportunities for New Zealanders, Leader of the Opposition Simon Bridges says.
“The Government inherited an economy growing three to four per cent but has squandered that momentum with bad policies, more taxes and wasteful spending. A weaker economy means less money in the back pockets of New Zealanders and less for core services like health and education. This Government’s solution? Yet more taxes.
“Westpac’s employment confidence survey shows workers are less confident, ANZ’s business confidence survey has dropped to -38 per cent and the Reserve Bank now says it may cut interest rates to support an economy that is slowing considerably under this Government.
“This is a real warning sign for the Government, which has been too willing to dismiss evidence that its policies are damaging New Zealand’s economy. It should focus on policies that help New Zealand to prosper but instead, it seems intent on discouraging enterprise and putting roadblocks in the way of our innovators and entrepreneurs.
“The proposed Capital Gains Tax is a case in point. It would tax people saving for their retirement, investors, small business owners, farmers and people living on lifestyle blocks. It adds to costs and hurts economic growth.
“Other anti-growth policies include increasing petrol taxes, banning new oil and gas exploration, banning foreign investment and introducing union-friendly labour reforms.
“National has a proven track record as competent managers of the economy. We believe Kiwis should keep more of what they earn and that Government has a responsibility to spend tax dollars carefully and in a way that delivers results.”
Opposition Leader Simon Bridges says a Royal Commission of Inquiry is needed into our Security and Intelligence Agencies following the Christchurch terror attacks and our security legislation needs to be revisited with some urgency to ensure New Zealanders are kept safe.
“A Royal Commission is the only suitable level of inquiry to ensure this is investigated thoroughly and independently.
“We need to understand whether this could have been prevented. It will need to ask hard questions about whether our security and intelligence agencies had their focus in the right places.
“In 2013 the Government of the day made the decision to abandon Project Speargun which would have scanned internet traffic coming into New Zealand and given an extended degree of protection to all New Zealanders. Similar systems are used in other jurisdictions.
“We currently have Cortex as part of our cyber-security systems, which is much narrower and designed to protect institutions. It’s never easy to balance the rights of privacy against security but where we draw the line must now be reconsidered.
“However, an inquiry cannot be an excuse by the Government not to answer questions in the meantime. Our security risk has now changed and New Zealanders need to be kept safe. The Royal Commission should look at the past, and Parliament should get on with actions for the future.”
Leader of the Opposition Simon Bridges has welcomed the changes proposed by the Government today to reform our firearms legislation.
“The terrorist attack in Christchurch last week has changed us as a nation.
“National has been clear since this devastating attack that we support changes to our regime and that we will work constructively with the Government.
“We agree that the public doesn’t need access to military style semi-automatic weapons. National supports them being banned along with assault rifles.
“We also support the Government’s proposals to limit the access to other high powered semi-automatic weapons and ammunition.
“We remain committed to ensuring the safety of New Zealanders and fighting extremism in all forms.
“National will work constructively with the Government to ensure we get this right.”