Cunliffe's tax stumble brings back memories

David Cunliffe
David Cunliffe
Labour leader David Cunliffe stumbled when he could not answer a question during last night's leaders' debate, but later rejected claims the party's capital gains tax would capture 215,000 homes held in family trusts.

The debate was at times heated, as the leaders traversed topics from poverty, tax policy including tax cuts, the Canterbury recovery and Nicky Hager's book Dirty Politics.

The Prime Minister took aim at Labour's tax policy, asking repeatedly: "Tell me this: if I own a house in a trust, do I pay a capital gains tax on it?"

John Key claimed that 300,000 homes in family trusts would be caught by Labour's capital gains tax (CGT), because they were owned by a trust.

In a moment reminiscent of the "show me the money" incident in a leaders' debate before the 2011 election, where then-Labour leader Phil Goff was caught out not knowing policy details, Mr Cunliffe avoided the question and tried to turn attention to Mr Key's position on GST.

After the debate, Mr Key said a CGT on the family home was a "shocking revelation", and said a tax practitioner had told him the 300,000 figure.

Mr Cunliffe said he did not answer the question in the debate because he wanted to check his facts.

"A family home does not incur a capital gains tax, whether it's owned by a trust or not. I thought it better to check that one before answering. John Key got it wrong. The fine legal niceties of a CGT will be worked through by a panel of experts ... but of course those details aren't appropriate for a free-flowing, fast debate like that."

The discussion became tense when it turned to the Canterbury rebuild. At one point Mr Cunliffe called Mr Key a "school-yard larrikin" in response to his repeated interjections of "whatever".

Mr Cunliffe criticised the inquiry into Judith Collins' conduct as being so narrow that it would be a "joke".

Mr Key responded by taking a swipe at the "three or four" staffers in Mr Cunliffe's office that write in the left-wing blogosphere.

"It's a known fact that Jason Ede in my office talked to a blogger. There are people in your office who have written on blogs. It happens on your side and you know it."

Mr Key condemned Whale Oil blogger Cameron Slater for allegedly running a smear campaign against the Serious Fraud Office, and confirmed that the blogger's emails will form part of an inquiry into Judith Collins' conduct.

And he hinted that his plan for tax cuts for low to middle income-earners, to be announced next week, would not be more than $30 a week.

"Even if it's a small amount, we want to reward New Zealanders for working hard, whether it's $10 or $20 or $30 bucks [a week], it adds up to $500 or $1000 for an individual or a couple [a year]."

The leaders also discussed different approaches to lifting people out of poverty. Mr Cunliffe pointed to government assistance, including Labour's Best Start payment for parents, while Mr Key said employment was the best path out of poverty.

Mr Cunliffe retorted: "There are 100,000 children growing up below the poverty line where parents are working. It's not just about work."

Mr Key said the minimum wage promises from Labour and the Greens would cost jobs.

"You want to send 16,500 people to the dole queue, David."

- By Derek Cheng of the New Zealand Herald

Or do you think what might have happened is......

Or do you think what might have happened is Key or his flunkies adjacent to his office pored over the minute detail of Labour's pages upon pages of documents looking for an obscure detail with which might be used to trip Cunliffe up. When Key asked the question he had nothing to lose, on the other hand it was asked in such a way as to give Cunliffe pause to think that there may be a trap.

So the question is, what is it about Cunliffe's hesitancy over the question that is so important that it made it into the headlines of the major TV channels particularly in the light of Key's well known and documented memory lapses which I lament isn't mentioned in this story given the headline?

It's not as though the writer doesn't have easy access to this newspaper's back issues.

I note the headline for this ODT story and lament that it doesn't refer also to Key.

In fairness

Cunliffe should have known his policy as it is his business to know his own policy, especially as it's a plan to take money from people. Key read the policy text and found a flaw which had to be clarified verbally by Labour, so fair enough I say.

Interesting...

Cunliffe isn't sure of the answer so chooses not to make a mistaken answer, whereas John Key ploughs right in and makes a completely erroneous claim, that Labour will tax the gain on family homes held in trusts. This is either a typical 'close enough is good enough' Key statement, or an outright lie. This is then reported as Cunliffe's stumble? No wonder people don't trust the mainstream media to report on politics in an unbiased manner.