BNZ’s top banker says NZ’s tax system isn’t fair and we need Capital Gains Tax

A capital gains tax won’t affect housing affordability but could make the New Zealand tax system fairer, BNZ’s chief executive says.

Anthony Healy told The Nation he supported the idea of a broad-based CGT but it should not be held up as a solution for high house prices.

All the evidence points to the fact that having a capital gains tax doesn’t address housing affordability. There’s a whole bunch of issues that come into that question. And if you look at, say, Australia, for example, they have capital gains tax, and they still have housing affordability issues. It’s really about equity in the tax system.”

He said New Zealand had a skew towards taxing equities and incentives in the system that pushed people to invest in property.

“I think to try and build the productive sector in the economy, we have to get a much more balanced approach to tax.”

A broad-based capital gains tax would give New Zealand the ability to address other things in the tax system, such as income tax rates for lower-income people.

“I think where we really need to address tax is at the lower end of the taxation system. If you were to apply a capital gains tax where you see a lot of wealth accumulation as opposed to income, then you have room to move, and you can look at the lower income tax rate, particularly for those who are struggling to make ends meet,” he said.

Healy said he would like to see an adjustment of the tax brackets up to $100,000 to give those earners a break.

“I think you can also look at with the revenue that you’d raise, addressing things in the welfare system that might need more funding.”

He said New Zealand had a “fair society” and people would feel that it was appropriate that as they accumulated wealth and sold assets there was distribution of that through the tax system.

How exactly is accumulating wealth through buying the right kind of asset “unfair”?  Everything has risk associated with it.

 

– The Nation, via Stuff

 


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