Under this government, the economy is strong. We’re investing in regions like the Bay of Plenty. We’ve extended Paid Parental Leave and delivered cheaper doctor’s visits for 600,000 people.
We’ve also received an independent report from the expert Tax Working Group, which I know people are interested in. So I want to take a moment to cut through the hysteria, because we owe it to New Zealanders to have a debate about the facts.
Like we’re doing with climate change and housing, the Waiariki expects this Government to continue tackling the big issues, not leave them for the next generation to deal with. One of those issues is facing up to the challenge of making our tax system fairer.
The Tax Working Group’s report recommended improvements to counter inequality, including making it easier to start a business and measures regarding income made when some assets – excluding the family home – are sold for capital gain.
Right now, those gains aren’t taxed at all, meaning those who work to earn their income pay more to cover the shortfall – and that’s not fair.
Why should the hard-working men and women of Aotearoa pay tax on every dollar, while speculators don't pay a cent?
This inequality should anger our community, like it does me.
Aotearoa already has a partial capital gains tax (CGT) for rentals called the Bright Line Test, brought in by the previous government.
The Tax Working Group suggests broadening a CGT onto other assets like shares and buildings (not on some personal assets or the family home). In practice, this will take nothing from anyone, because it will only be paid once the sale is done and those ‘gains’ are made.
This would give the Government money for billions of dollars of tax cuts, which the Group is confident would leave the vast majority of our whānau better off.
Sadly, while most of us debate the facts, some just gossip.
Simon Bridges claims the report’s recommendations would hit KiwiSaver. A quick fact check shows he’s wrong and the fact he refused to release his calculations shows he knows it. The truth is, KiwiSaver fund Simplicity says if you make $40,000 a year, over 45 years, you would be around $55,000 better off under the Group’s recommendations.
More facts: The Government isn’t bound to accept the recommendations. The recommended CGT wouldn’t come into effect until 2021 and wouldn’t be backdated. It would only apply after the sale of an asset – not while someone owns it.
Ignoring the inequality of our tax system has gone on far too long. We need a fairer New Zealand and we need a courageous Government to finally address this issue. That Government is here.
We’re taking the time to carefully consider how we respond to the report’s recommendations, before announcing our decisions next month. By facing up to the issue of tax fairness, closing loopholes and better sharing the burden of tax, we can provide relief for our whānau.
Please make sure you have your say.