Taxing taxes

John Key

ACT remind us that National are slowly edging backwards on a fairly solid election promise.

No New Taxes?
National campaigned on no new taxes and will soon have introduced three. It begs the question, why vote for a National party that introduces new taxes like a Labour Government on heat?

Tourist Tax
The tourism industry is furious about the $25 arrival fee applied to visitors. It was sold as a user charge but the Government has never shown how it covers cost created by the user. That’s a tax.

Capital Gains Tax
If you buy and sell a property other than your primary residence within two years you automatically pay tax under National’s new bright-line test. The only difference between this and what most countries regard as a capital gains tax is the time period, which the opposition are already promising to extend.

Land Tax
As Rodney Hide writes, John Key’s land tax is political genius. It won’t actually affect house prices, it taxes ‘foreigners’ rather than New Zealanders, it shows the PM ‘doing something’ and it partially steals another idea off the left (why do National win power to implement their opponents’ ideas?). Best of all, he’s only proposed it, so he can still back out.

Acorn Taxes
The Capital Gains and Land Taxes would seem to make more sense if extended. The bright line test will catch almost nobody at two years, but at ten years it would bite. Commentators are already saying the land tax would be a good idea if extended to all property owners. Half-hearted taxes are a time bomb.

And this is the real concern. It isn’t the fact that these new taxes are essentially toothless tigers. It’s that left government of the future don’t have the hurdle of introducing a new tax; all they’ll do is adjust the conditions “a little”.

Conditions which, I can assure you, will not favour National voters.

On that basis, we can’t be too relaxed about this, and let’s hope the Land Tax dies a quick death before it becomes another plaything of future governments.


– Free Press, ACT


THANK YOU for being a subscriber. Because of you Whaleoil is going from strength to strength. It is a little known fact that Whaleoil subscribers are better in bed, good looking and highly intelligent. Sometimes all at once! Please Click Here Now to subscribe to an ad-free Whaleoil.

  • R&BAvenger

    ACT can complain all they like. The government has to govern. A CGT on the practice of flipping is fair, hitting those who are clearly speculating on the Auckland property market is also fair.
    Hitting up the Auckland Council on the housing issues in their backyard would be more like it.

    • Muffin

      That doesn’t require a new tax or law, just needs the ird to enforce the existing tax laws.

      • Gladwin

        Agreed. I reckon IRD should pursue the extreme house traders who obviously are buying with the intention of selling.

        • Muffin

          They also aren’t required to prove their accusations, the ird can say they believe it’s trading and its up to the taxpayers to prove they weren’t. In terms of $ return on investment the ird should be elbow deep in it.

          • phronesis

            The lack of IRD action on this is one of life’s great mysteries. Hard to believe there isn’t a political angle to their apparent incompetence.

          • Muffin

            The return they get from investigating land transactions is very good, like $10 for every $1 spent, somthing in that order or higher. I figured it would be an easy cash flow for them.

  • JC

    The best land tax of all would be to draw a big new boundary around Auckland that included all land that should be needed for proper urban development over the next twenty years and rate it as if it was already fully developed.

    That would wipe out the land bankers, half the poofters in the National Party who are in Len Brown’s ears and break up the coterie of crony capitalists and profiteers that get drawn to corrupt urban authorities.


    • rua kenana

      That suggestion is closer to Stalinist/Jong Un type socialist enforcement than anything I’ve ever seen in NZ.
      The Aucklanders, and in fact all NZers, should resist it with all the means at their disposal.
      There’s an excellent means already available of resolving any alleged Auckland problems. It’s called the price system. A useful suggestion would be to actually try using it, instead of even more socialist enforcement.

      • JC

        The above *is* a pricing system and it has been used in the past by councils to control land banking. Unfortunately the Auckland situation has been allowed to develop for too long and remedies will accordingly need to be draconian to fix it.


  • KGB

    Did JK not say “if records show that foreign buyers are a problem” he would look at land tax? “But it could also catch Kiwis living overseas.”
    His 2nd sentence told me he already knew the result and when we learn the percentage of foreign purchases, Kiwis will sigh relief because it isn’t the crisis claimed. Little Johnny living in London Will not be taxed on his Auckland investment.
    I have stronger criticism for Government allowing Len to continue to create this mess.

  • Keanne Lawrence

    This is the sort of ranting from ACT that help keep them in the .05 – 1% range as well as helping them continue to be a peripheral part only of the political scene. Apart from the odd flash of clear thinking they seem to be too influenced by what the Media party are pushing.