Labour intend to resurrect capital gains tax after they win the election

In an interview with Richard Harman, Phil Twyford indicated the CGT is still in play

There is a critical missing policy in Labour’s suite of housing announcements made over the weekend.

Though the policies would extend the current bright line test to apply income tax on the resale of homes from within two to within five years, it stops short of a full capital gains tax.

However, it is not off the table.

Housing spokesperson Phil Twyford told POLITIK last night that Labour would reconvene the tax working group once it was in Government.

“Grant Robertson’s position has been that he’s not going to rule anything out,” said Mr Twyford.

“All options will be on the table for tax reform.”

So, the cowards intend to set up a “working party” after the election, and then have that magically recommend CGT, at which time Labour will invoke the “thorough consultation” mantra and push it through. 

What’s notable about the policy is what’s not in it — apart from the capital gains tax.

Apart from barring sales to foreign residents, there is no real tool to restrain demand such as those proposed last week by the Reserve Bank; a look at immigration and loan to value ratios.

Indeed Labour’s housing policy package does not mention the Reserve Bank.

So Labour is focusing on supply and on restructuring social housing through the new Ministry of Housing.

Mr Little brushed off questions about the transition costs of this.

But given that 80% of all current state house tenants are on a benefit or superannuation, tenants would still have to deal with the Ministry of Social Development as well as the new Ministry.

However, judging by the approval of the party faithful this was a policy designed for them as much as the tenants.

And Mr Twyford seemed to echo that.

I’m not sure which party faithful Harman refers to, as Labour’s shadow cabinet were completely in the dark that a policy even existed until just recently.

MPs will be similarly nervous that the CGT issue might return. I expect National to pick at that scab leading up to the election. As Labour won’t “rule it out”, it makes for perfect fodder to scare the electorate at the same time as shouting “no new ideas”.

Especially when one of the first things Andrew Little said after he took over was that the CGT policy that contributed to Labour’s largest loss for nearly 80 years was killed; never to return.

 

– Richard Harman, Politik

 


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