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“Yawning tax gap” defended by NZ media

July 7, 2011

Dom joins in with mainstream media gangbashing of “sensible and moderate” capital gains tax

Closing what Sydney Morning Herald economics correspondent Peter Martin calls a “yawning tax gap” has been immediately painted as negative and extreme by New Zealand’s self-serving corporate media.

Following on from a one-sided TV3 “debate” on Labour’s yet-to-be-announced policy on a capital gains tax, today’s Dominion Post lines up the usual list of haters on page two, beside a story that could have been written by English, Crosby or Textor.  Despite it being an upcoming Labour Party policy announcement, the Dom devoted a banner headline plus the first two-thirds of the story to the National Party’s pre-emptive strike.
http://www.stuff.co.nz/dominion-post/news/politics/5246042/Labours-capital-gains-tax-plan-attacked

The Government and their heavily biased mates in the media are trying to paint any move towards a CGT as some radical lefty idea, but it just doesn’t wash.  A CGT is in fact favoured by the ultra-Conservative Tax working group, as well as by the Treasury, the Reserve Bank, the IMF and the OECD.  So why aren’t we getting comment from these groups, alongside the predictable scare-mongering from National, the Real Estate Institute, and various self-interested investers.

CGT’s are common place centre-Right policy in Australia, Europe and the United States, so it’s hardly the Bolshevik revolution that’s being portrayed by New Zealand’s one-eyed Rightwing media or their all-too-cosy mates in the National Party.

But, here’s why I reckon it’s a smart play:
1) It’s essentially ‘fair’.
2) The baby boomers who always made a CGT unelectable in NZ are now: A) outnumbered, and B)B) so dissilusioned by the privatisation disasters of the 1990’s that they’d rather have a CGT than lose state assets and pay higher power bills.
3) The solid core of centrist swinging voters in NZ don’t have investment properties
4) It’s the most economically sound long-term thinking we’ve heard from either of New Zealand’s two major political parties in years.

 The spin coming from National and the media is that this s an attack on property investments. It isn’t; it’s simply an allignment of the conditions of making an income in New Zealand.  Why should someone working a day-job have to pay tax on their income while someone making an income from property investments doesn’t have to contribute a bean.  It’s simply elitist baby-boomer logic, and as Sydney Morning Herald economics correspondent Peter Martin noted on Morning Report today, this “quaint” tax gap has been closed by almost every other country in the western world, including those the Government always make comparisons with when it suits them to do so.

Gordon Campbell brought some much needed balance, moderation and common sense to the debate on scoop.co.nz today, but the mainstream media establishment in New Zealand have once again failed to give our people the real story, preferring instead to represent only their wealthy mates, including and especially the National Party. http://gordoncampbell.scoop.co.nz/2011/07/07/gordon-campbell-on-the-capital-gains-tax-debate/

There is a link to the Morning Report interview with Peter Martin at the bottom of Campbell’s article, and it’s well worth a couple of minutes, just to contrast his comments with the outrageous flat Earth propaganda coming from his New Zealand counterparts.

Ultimately, would New Zealanders be best served by a capital gains tax delivering substantial on-going revenue to the NZ economy for ever and ever, or…sell state assets to get a one-off injection of capital that is less than the equivilent of three months of national debt, while we all pay more to foreign corporations for electricity for ever and ever?  It’s not even a contest.

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One Comment
  1. mike e permalink

    Don, t forget the loss of $800odd million a year revenue from profit from these assets, something Key and English haven,t explained where that loss is going to be made up from as it is far more than the cost of borrowing at 5.5% that about $500million a year they have to find after the fire sale

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