John Key MP National Party Finance Spokesman

09 November 2005

Cullen prepares ground for new tax

National Party Finance spokesman John Key says Michael Cullen appears to be preparing the ground to impose a capital gains tax on investment property.

Dr Cullen has confirmed that he has asked Treasury to consider what options are available to slow down the economy.

"From the noises he's making, it's clear he wants to pour cold water on the Kiwi love affair with home ownership.

"As Dr Cullen pointed out yesterday, 'they are not necessarily terribly attractive policy options'.

"Where there's smoke there's fire. The Finance Minister does not make those sorts of comments without something in mind.

"Dr Cullen has already shown his appetite for capital gains taxes with his current proposal to slap a new tax on foreign-held shares owned by New Zealand residents.

"A capital gains tax on investment property is a natural extension of that thought process.

"The last time Dr Cullen said he was not without options we saw the introduction of his totally ineffective currency intervention programme.

"Since that initiative failed, he's been busy searching around in the dark grasping at other straws."

Meanwhile, Mr Key says Dr Cullen continues to contradict himself.

"While adamantly opposed to personal tax reductions, this Government is about to embark on a huge increase in spending. At the same time they're saying there's no plan to trim spending.

"If that's so, what is the razor gang going to be doing - other than a public relations exercise?"

ENDS

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