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The only thing that is sure is Labour will set up a tax working group to investigate if there is a better and fairer balance between the taxation of income and assets, in particular the capital gain associated with property speculation.
Finance spokesman Grant Robertson and revenue spokesman Michael Wood issued a five-page "Labour’s Tax Plan" briefing yesterday, which said no new taxes or levies would be introduced in Labour’s first term of government beyond those already announced.
"To avoid any doubt, no-one will be affected by any tax changes arising from the outcome of the working group until 2021."
However, the media release and the briefing paper did not stipulate what taxes or levies Labour had already announced.
These are likely to be a crack down on housing speculation by extending the brightline test to five years, taxing the sale of properties other than the family home. That policy is part of Labour’s first 100 days of government plan.
So far, Labour has proposed levies and changes to create funding for specific programmes, including a regional fuel tax, a clean water royalty and a tourism and infrastructure fund. Labour has committed $15 billion over 10 years to create a congestion free Auckland. It has proposed a 1c to 2c per 1000 litres water levy and would introduce a $25 levy on tourists.
There has been general confusion about how Labour will introduce a capital gains tax. There is still no detail on the likely rate. However, Messrs Robertson and Wood said the family home and the land around it would never be taxed.
There would also be no inheritance tax, something similar to death duties, which were abolished in 1993.
Labour would not shy away from the hard issues such as fixing the housing crisis and it was determined to know what is right, the MPs said.
"But we also know we must take New Zealanders with us as we do that. We have heard the call from New Zealanders’ voices to be heard."
The public would be involved at every stage of the tax working group, as well as Cabinet and Parliament’s consideration of any changes that arose, the two men said.
The Taxpayers Union said Labour could not have it all ways.
Labour’s manifesto was costed at $23 billion over the next Parliamentary term, second only to New Zealand First, executive director Jordan Williams said.‘‘Labour have done the right thing in committing to put any capital gains or land tax to the vote.
"But without new revenue, and having promised new spending of $13,287 per New Zealand household, Labour needs to explain what spending they’ll cut in order for Grant Robertson to keep to the Party’s debt targets."
Labour could not credibly promise to lift spending, keep to its debt limits, but also say it would not hike taxes, Mr Williams said.
Labour’s fiscal plan showed tax revenue rising between 5% and 6% a year until 2021.
Finance Minister Steven Joyce said Labour kept denying it would put up income taxes, but again said it would legislate to remove the tax threshold changes occurring from April 1.
"This means someone on the average wage would be $1060 a year worse off if Labour becomes the government. They’ve begun the long march back but they’ve got a long way to go."
Mr Joyce speculated Labour had adjusted its tax policy five times in the past month.
"We know Labour desperately want to put a capital gains tax and an inheritance tax on farms, small businesses and the family bach. They have had it in their policy for two elections and have only dropped it this time because they were rumbled by the public."
Labour tax pledges
• No new taxes or levies before 2021, except for ones already announced
• No changes to personal income tax, corporate tax rates or GST
• Reverse $400million of National’s tax cuts
• Family home and land around it will never be taxed
• Establish a working group to look at, among other things, a capital gains tax
• Extend current brightline test to five years
• Regional fuel tax, aimed at reducing congestion in Auckland
• Clean water royalty of 1c to 2c per 1000 litres for farmers and an unspecified rate on water bottlers
• Tourism and infrastructure fund paid for by a $25 tourist levy