Zealand would have more capital available for local investment, rather than relying so heavily on foreign-owned banks. That's a lesson the Scandinavians have learned and that our Aussie mates have also got right. We need to get it right as well. Another area in which Labour is streets ahead of National is in the area of capital gains tax. Let me explain this very briefly: many New Zealand businesses have given up investing in useful and productive areas. Why? Because the New Zealand tax system encourages business to invest in the wrong places. That's because many of the richest New Zealanders have grown rich from capital gains. They buy a piece of land for a million and sell it for three million. That's a cool two million dollar profit, much of it tax-free. Regardless of how they earn their income, everyone should pay the same rate of tax. Investing in property for capital gains not only makes home buying unaffordable for many families, it sucks billions away from productive investments. [vii] Worse still, history has shown that what goes up generally comes down, and often with a crash. What a capital gains tax does is encourage all investors to put their money into areas that produce something.  This will have the effect of dampening the current property bubble, while freeing up billions for investment in areas like computer technology or energy production. This is not some freak theory; it's acknowledged internationally. That's why there are only two other developed countries