11. Question No. 11—RevenueANDREW BAYLY (National—Port Waikato) to the Minister of RevenueQuestion No. 11—Revenue11. ANDREW BAYLY (National—Port Waikato) to the Minister of Revenue: Does he stand by his statement that arguments against using unrealised gains for calculating effective tax rates are bankrupt and rubbish" and will he rule out introducing legislation for a capital gains tax this year?Hon DAVID PARKER (Minister of Revenue): I do stand by my full statement which further said that the idea that you would exclude all unrealised capital gains in an assessment of the super-rich is absurd. It is widely accepted by New Zealand and international tax experts including the OECD that unrealised gains are economic income. In response to the second part of the question: as the Prime Minister and the Minister of Finance have made clear the Government has made a series of commitments on what we would do and would not do on tax this term and we have honoured those commitments. New Zealanders will know Labour Party tax policy for the next term before the next election as they will for all parties contesting the election.Andrew Bayly: Will he rule out taxing unrealised gains on assets such as New Zealanders' KiwiSaver accounts their bach or their small business and if not why not?Hon DAVID PARKER: We've got no plans to tax those. I would note what I said in the answer to the primary question. I would further note that the group that is in the study has on average $276 million of net assets and structure their affairs so that the vast majority of their income is earned as capital income. The National Party of course is on the side of capital. The Labour Party notes that people who work for a living pay tax on every dollar they earn in their wages and salaries every dollar they earn from a salary increase every dollar they earn from overtime. It is the National Party and the ACT Party that think people who earn virtually all their income from returns on capital should pay tax at less than half the rate of people who earn their living through salary and wages.Andrew Bayly: Is he aware that there's no other developed country that taxes unrealised capital gains and if so why would the introduction of such a policy be good for Kiwis?Hon DAVID PARKER: I'm not suggesting that all unrealised capital gains should ever be taxed. But if you want to find a country that does tax some unrealised capital gains why don't you count Switzerland?Andrew Bayly: Did he express his view to the Prime Minister that arguments against a tax on unrealised capital gains were "bankrupt and rubbish" when the Prime Minister explicitly ruled out a capital gains tax after the release of the IRD report?Hon DAVID PARKER: I've addressed some of those issues in the primary answer. I would also note I don't discuss what is discussed in Cabinet. But I can say that discussions in the Labour Party on taxation are much more economically literate than they are from the other side who would tax labour at twice the rate of capital income.Andrew Bayly: Does he support the introduction of a capital gains tax?Hon DAVID PARKER: I stand by the Labour Party policy which is that we keep our promises to the electorate. We have kept our promise this term. Our tax policy for the next term will be known before the election and I would note that it wasn't the Labour Party who promised not to increase GST and then did it in Government."