CTU Media Release

7 July 2011

Capital Gains Tax - the Time has Come

The Council of Trade Unions says a broad-based capital gains tax excluding the family home will be a useful addition to our tax system.

Peter Conway, CTU Secretary, says, the time has come for a capital gains tax in New Zealand.

Peter Conway, who participated in the Tax Working Group, said that the OECD has consistently pointed out the gap in our tax system due to the absence of a capital gains tax, and there was a real head of steam behind such a move in the Tax Working Group.

"It is fairer to develop a tax framework where every dollar of income earned, from whatever source, is taxed."

Peter Conway said that a capital gains tax is not a miracle cure for the economy and would take time to have an effect but would result in higher revenue for Government, a fairer tax system, the removal of a relative tax disadvantage for productive investment, and make housing more affordable.

"It is interesting to see the hysterical reaction from the Prime Minister and other Government Ministers. The Government should reflect on the failure of their tax switch. It did not stimulate the economy, is not revenue neutral, and increased the take home pay gap between someone on $30,000 a year and someone on $150,000 a year by a massive $135 per week."

"What we really need in New Zealand is a set of initiatives to improve productivity and wages, and then a complementary set of initiatives to improve savings, encourage them in to productive investment, greater levels of domestic equity in our companies and less reliance on private debt to overseas lenders. A capital gains tax is part of such a policy framework," said Peter Conway.

ENDS

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