OTAGO IMAGES/OTAGO DAILY TIMESNational campaign manager Simeon Brown, leading the tax attack on the Labour Party. PHOTO: PETER MCINTOSH Many people find election year a taxing time; all those politicians clamouring for votes and promising the sun, the moon and stars in exchange. This year, if the National Party gets its way, the central issue of this election campaign will be tax. National has been shameless and blatant about it. After the party’s leadership travails it needed a distraction, and its senior MPs have spent all week setting out in exhaustive and exhausting details the alleged new taxes it claims any future Labour-led government might introduce. Some of its claims have been advanced on spurious grounds; a candidate commenting on EV take-up does not automatically equate to the so-called “ute tax’’ rolling down the road again. A senior MP’s lack of clarity when being asked about another party’s tax policy does not equate to Labour endorsing it. Nor does Labour possibly not continuing with the investment boost tax credit in its present form automatically equate to a new tax on business, as National has argued. Other supposed new tax claims have a firmer base. It was embarrassing for Labour, which had ruled out a tax on streaming services, to have National discover a Member’s Bill in the name of Willie Jackson which proposed to introduce just such a tax was still sitting in ballot. The Bill was swiftly withdrawn, but Labour can expect to be hearing about it from now until November 7. Much of National’s attacks are predicated on Labour agreeing to implement the policy pledges of parties it will likely need if they are to govern post-election. The Green Party, Labour’s likely ally in any such endeavour, does indeed have a range of new taxes it would like to introduce. It unabashedly believes that the taxation system should redistribute wealth from the well-off to the less well-off. However, as National’s senior strategists well know, such things are negotiated as part of the coalition formation process. Support parties are seldom in a position to be able to be ultra demanding in such negotiations — it is not as if the Greens are going to suddenly back the blue team — and Labour has all but ruled out the likes of an inheritance tax. Te Pāti Māori has an even more radical tax policy, and likely an even smaller chance of seeing its manifesto being implemented by any Labour-led government. As for Opportunity — which has a tax policy radically different from that being offered by any other party in the House — it still has to actually be elected to the House before it can try to implement reform in this area. And, given the party insists that it could and would work with either of the major parties, there is no guarantee that it will be dealing with Labour post-election, should Opportunity actually poll 5% or more. Claiming that Labour backs Opportunity’s tax policy, as National has, is jumping at shadows. The one tax Labour has said it would introduce if elected, is a capital gains tax. Labour released this policy several months ago and specifically tagged any revenue it might amass to funding free GP visits. It argues that 90% of New Zealanders would never have to pay its capital gains tax, and that it has targeted speculators. To a degree, its argument has some legs. Compared to other countries with a capital gains tax, its proposed impost is very narrow. The family home or farm has been explicitly ruled out, and only profits made after July 1, 2027 would be taxed: a rental property, for example, bought several years before would only be taxed on any increase it its value from this year, not the year of purchase. However, the threat of such a tax runs the risk of disincentivising the proverbial “mum and dad investor’’ from buying a second property as a backstop for their retirement — and thereby providing rental housing in the process. It is more likely that Labour has speculators and property flippers in its sights — people who also provide rental housing, as well as employing tradies, and who also already pay taxes on those properties. Those people should undoubtedly pay their share of tax but, as with all taxes, the risk is that the person paying that tax will not be the speculator, but the person paying a higher price to buy a house because the capital gains tax has been factored into the sale price. Tax is important, and it should be debated in an election year. But many other things are important, too. National’s clamour should not conflate the election campaign to a single issue.
