Tax is emerging as the battleground heading into the last two
weeks before the election with National seizing on Labour
leader David Cunliffe's stumble over the details of his
flagship capital gains tax policy.
While National will next week set its tax cut plans against
Labour's capital gains tax, Labour claims its plan to post
bigger surpluses gives it more room for tax cuts if it wins
this election and a second term.
Mr Cunliffe was unable to parry Prime Minister John Key's
claim that the capital gains tax would apply to family homes
held in trusts during Tuesday night's debate.
While Labour was quickly able to prove its policy always
included an exemption for family homes in trust, Mr
Cunliffe's inability to respond on a crucial detail gave
National an opportunity to attack the plan.
"Labour's been working on this policy for five years and
David Cunliffe was the finance spokesman when it was
developed so it's a bit worrying for his supporters and
everyone who's expected to pay for it that he just doesn't
know how the policy works," Mr Key said yesterday.
Economic Development Minister Steven Joyce said while Labour
had clarified the trust issue yesterday, Mr Cunliffe's
stumble "has been helpful because we've got into it and
discovered that this is a very complex tax proposal which a
lot of people would have a lot of difficulty working out
where they sit, and plenty of people would have the
opportunity to avoid it".
Mr Joyce said National's campaign advertising will shortly
begin promoting its tax policy, including plans for tax cuts,
over what Prime Minster John Key says are the Labour-Greens
bloc's five new taxes.
But Mr Cunliffe said Labour could win that debate.
"New Zealanders know that we're being fiscally responsible,
we'll run surpluses and pay down national debt and that with
Labour leading the government they'll have what they expect
from a strong public education system, a great health system
and a civil society where everybody gets to be the best they
Labour finance spokesman David Parker said Labour's plan to
run larger surpluses meant "in the second term the prospect
of income tax cuts as capital gains tax revenue rises become
more real under us than it is under National". He has
previously said tax cuts are "likely" in a second term but
"they wouldn't be weighted towards the wealthy".
Defending the capital gains tax, Mr Parker said it would
"At the moment middle income New Zealanders pay higher rates
of tax on overall income than wealthier New Zealanders when
you factor in capital gain income and GST."
- By Adam Bennett of the New Zealand Herald