PEC calls Parliament to front up on Capital Gains Tax.

As the revelations continue, we realise that it's not the voters of New Zealand that have been holding back on implementing Capital Gains Tax (CGT) but rather a very small yet influential group of New Zealanders well connected to the political machinery of office," says Selwyn Pellett, spokesman for the Productive Economy Council.

"We had no idea of the number of politicians on both sides of the house that are compromised by their own investment choices," says Pellett.

It is difficult to get exact data on the number of property speculators in New Zealand but the PEC's estimates put it at around two hundred thousand. The reality is that those two hundred thousand people who participate in property speculation typically lower their own PAYE and that lowers the tax take for the government. Those that don't engage in property speculation must therefore by definition have a higher tax burden or the short fall between tax take and operating expenses must be borrowed by government.

"We have just halved Kiwi Saver on the basis that we won't borrow to fund savings, but here we are borrowing to fund an activity that is detrimental to the greater good of the country and which only benefits 200,000 people," says Pellett.

"We now know that property speculation (with the support of tax laws) has fuelled our way to a massive national debt of 150% of GDP, reduced productive investment, high-jacked the Kiwi dollar, is destroying our export sector and made the OCR an impotent tool to control inflation both at the peak of demand and at the bottom" he says.

"In short we urgently need laws to restrain this activity and implementing Capital Gains Tax on secondary properties is a crucial step. This positively affects more than 90% of the population but as we have seen in the last few days it negatively affects a few and some of those are our politicians who, using Bill English's own words, 'are using this as part of their superannuation fund'," says Pellett.

"One has to ask, when Treasury, the Governor of the Reserve Bank, the New Zealand Exporters and Manufacturers Association, BERL, and the PEC are all calling for a better balanced tax system that would end the tax haven around capital gains on property and bring a better balance to the economy, can we afford to sit back and allow our hugely conflicted politicians to entrench the status quo that is so damaging to our broader national interest?"

"This change is both necessary and timely with our current deficient budgeting and will benefit most New Zealanders in the short term and all New Zealanders in the long term. So it's time to remind our politicians that they are elected to represent the people, not their retirement funds and should bring CGT to the top of their proposed tax reforms" says Pellett.

ends

© Scoop Media