Capital gains tax should be just the start, says Green co-leader Marama Davidson

2019-03-10 06:37:35

Green co-leader Marama Davidson has delivered a full-throated defence of capital gains taxes in a major speech, saying the Government should eventually go further to balance the system.

Speaking at the party's summer policy conference in Wellington, Davidson pushed back on attacks against the CGT from the "wealthy elite" who she said held the political system hostage.

"The resistance to the capital gains tax by the wealthy elite, who often own multiple properties, shows that our political system is still held hostage by the people who benefit from an unregulated housing market," Davidson said.

The Government, which the Green Party support with confidence and supply agreement, is currently working out whether to endorse a CGT proposed by its own tax working group.

The Tax Working Group, chaired by former Labour finance minister Sir Michael Cullen, recommended the Government introduce a new broad-based CGT on rental properties, land, businesses, and shares, paid at the income tax rate. The family home would be excluded.

This would raise roughly $8.3 billion over the next five years, but that could be ploughed back into the hands of taxpayers through a suggested income tax cut, and another tax break for KiwiSaver accounts. This would deliver a tax cut between $420 and $595 a year for almost all taxpayers.

The Government is not expected to officially respond to the group until April, meaning ministers have thus far not been particularly defensive.

But Davidson, who is not a minister, has more freedom to articulate her opinion.

In her speech, she said a CGT should be the start of wider tax reform.

"The capital gains tax should be the beginning of a wide range of reforms to transform our tax system. The Greens have long called for a range of reforms, like increasing the tax rate for the richest 1 per cent and putting a tax on polluting big businesses and housing speculators."

Co-leader James Shaw told Parliament ahead of the working group's report being released that the Government wouldn't deserve to be re-elected if a CGT was not implemented. He has since become more reticent on the issue.

The speech mostly focused on economic issues but tied them to more ecological themes.

Davidson noted under the current economic approach, a Kauri tree only had "value" when it was chopped down

She also used her speech to push back against National leader Simon Bridges' assertion on Saturday that the Green Party were not focused enough on the environment, and his party might become more green than the Greens.

"We understand that fossil fuels are killing the planet so we have ended new oil exploration, and begun work on a just transition for those communities currently reliant on this industry. But Simon Bridges has promised to restart offshore oil prospecting to continue burning our planet. He also says four lane highways are good for the environment."

Bridges has promised to lift the ban on new offshore oil and gas exploration permits if elected in 2020, arguing that the economic pain is not worth it while the world still relies on oil and gas for its power.

He said on Saturday that the Greens were "not making sufficient progress."

"For those who voted for Labour and the Greens because they thought they would get a greener government, well I'm not seeing evidence of that today," Bridges told The Nation.

He also said taxes were not the path to environmental sustainability.

"I don't believe the solution to everything is taxes. We can make sure we're adding more bio-diversity, and dealing with climate change without adding on more taxes. We want New Zealanders to trust as much with the environment as they do with the economy."

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