Cronywatch: Cullen to lead Tax Working Group

Michael Cullen, famous for spending the thick end of a billion dollars buying back Kiwirail from Toll Holdings, and a gloating comment that “we won, you lost, eat that”, has been appointed as the head of Labour’s tax working group.

Sir Michael Cullen will head the government’s tax working group.

Finance Minister Grant Robertson unveiled the terms of reference for the group, part of the government’s 100-day plan, on Thursday.

Robbo couldn’t work out the tax system by himself, so he’s brought in Cullen to do his heavy lifting for him. I think it is fair to say that this is Labour’s first crony appointment.

While National has labelled the terms of reference underwhelming, Mr Robertson says it aims for a better balanced tax system.

“Individual wage earners, businesses, asset owners, and speculators should pay their fair share of tax,” Mr Robertson said.

“Right now we don’t think that’s happening.”

I don’t think Robbo has been doing much thinking, other than where he can get his lunch in as public a place as possible and take 2 uniformed police officers and 5 DPS officers with him to show off.

The working group will consider a progressive company tax system – Mr Robertson has previously highlighted Australia’s – and a capital gains or land tax, but not on the family home.

It’ll also consider how the tax system can deliver positive environmental outcomes, though not specifically a carbon tax.

“This is an issue that both our coalition partners have asked us to include within the tax working group, it is with an eye to the long term to make sure the tax system supports the environmental outcomes that we have,” he said, adding that the water tax remains off the table.

Mr Robertson said a fiscally neutral outcome was possible.

Changes to GST rates are off the table.

Except they aren’t off the table at all.

But the government will still look at progressing legislation to include online purchases in GST.

It would also be up to the working group whether to consider reducing the scope of GST to remove it from feminine products or fresh fruits and vegetables, he said.

“If the working group choose to go down a path of looking at where GST applies, that will be something for them to look at,” he said.

GST should not be meddled with. Once you start allowing exemptions then all sorts of whingers will be after exemptions for their chosen hobby-horse. Spastics and wankers will want GST free tissues for wiping up dribble. Methadone “patients” will want GST off their “medications”.

An inheritance tax is outside the group’s scope.

Sir Michael, a former Labour finance minister from 1999 to 2008, is the first of the likely eight-member group to be announced, with the rest expected to be hired by Christmas.

“I think his credentials are impeccable in this regard and I think he’s a person that all parts of the political spectrum would respect,” he said.

But while his hiring has not come as a surprise it was not welcomed by the opposition.

“Sir Michael is many things but a politically independent voice on taxation policy he is not,” National’s finance spokesman Steven Joyce said.

He also criticised the working group as an 18-month long rubber stamp.

“Its terms of reference is written so that it will propose one significant thing at the end of it, a capital gains tax,” he said.

The Public Services Association criticised the group for having a narrow scope while it and the Taxpayers’ Union both called for unions to be represented.

Labour has committed that changes proposed by the tax working group could be legislated in this term after public consultation but would not come into effect until after the next election.

It annoys me that a political party lacked the integrity to have a decent and comprehensive tax plan ahead of an election. It is just laziness, the one thing that Robbo excels at.




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