Peter Dunne Against Capital Gains Tax
January 28, 2009 New Zealand Taxation
Peter Dunne called the idea of a Capital Gains tax in New Zealand a “hoary old chestnut”, in a press release on the 27th of January.
In response to a New Zealand Manufacturers and Exporters Association (NZMEA) statement calling for the introduction of a Capital Gains Tax, the Minister of Revenue Peter Dunne voiced strong opposition to the idea of introducing a capital gains tax. He claimed that it would be political suicide for any government to even try and introduce it, and that it would not happen with him as Minister of Revenue. Further, the concept was labelled as draconian and backwards looking.
In this case, the Capital Gains Tax refers to gains made by selling a house, although the argument and tax implementation could extend to other investments like securities.
In his statement, Peter Dunne claimed that the introduction of the tax would be inefficient and distortionary. In response, the NZMEA issued further statements stating that in his incoming Treasury recommendation, Peter Dunne was advised to “equalising rates of tax on different forms of investment to improve savings and investment, including reducing the rate of tax on some existing forms of investment income and introducing a tax on capital gains to reduce the diversion of investment into tax-favoured or tax-exempt forms,”. Something that the NZMEA claims the capital gains tax would achieve, along with improving New Zealand housing affordability.