Bennett David: General Debate 
Bennett David: General Debate 
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DAVID BENNETT (National—Hamilton East) 
: 
 I congratulate the previous speaker David Parker on showing that Labour members are wavering on their tax policy. It took them only 24 hours to realise that it was a dog and that people are not going to go for it but we all wait for next week. I congratulate the Green Party as well because the Green Party is now the leader of the left wing in New Zealand. Its policy will determine what the left will campaign on. It is not Labour’s policy; it is Green Party policy being promoted by Labour now. The Green Party always wanted to have a capital gains tax and now Labour is doing it. Good on the Greens for at least standing up for it and poor old Labour has to pick up Green Party policy. 
A capital gains tax is a tax of envy. It is a tax that will not work. It will not work for a number of reasons. First of all house prices are not going up so there will be no return to the Government from this tax in its first few years. This tax will not work because if Labour fully implemented the tax it would have to do it across all assets not just investment properties. If Labour implemented it on investment properties only in 15 years’ time it might get $700 million. That would not be what we need to sustain this economy in the near future—$700 million in 15 years’ time. Labour should tell the people of Christchurch that it will rebuild their city with $700 million in 15 years’ time and see how far it gets. 
This tax will not work because it will be complex. Those people out there who can afford to get around it will try to do so. This tax will not work because it will not mean that there will be no increase in housing prices. We can look at the biggest property bubble going on at the moment which is in Sydney where they have had capital gains taxes. What has happened in Australia? House prices have still gone up. That would not change under this policy. 
If we look at the policy what would Labour members do with their capital gains tax? Would they stick it on the non - family home? Well they may do that. Would they go to beach houses and those kinds of investments? Yeah they probably would do that. Would they go to farms? Well of course they would do that because they do not like farmers. Would they go to other businesses? They would have to. If they are going to the beach house the second home and the farm they would have to go to businesses. Labour members should tell those employers out there—those electricians and plumbers—that they cannot take on apprentices now because they will be taxed on selling their business. There will be no incentive to build their businesses. Then Labour would have to tax other assets like shares and other forms of investment. When would it stop in that process how would it deal with the corporate structures to avoid taxation in those areas and how would it make that fair and equitable? 
A capital gains tax would depress investment in this country and in the productive economy. Labour’s envy tax would have the opposite effect of what it wants it to do. That tax would actually depress economic growth in New Zealand and hurt this economy because Labour would be taxing the productive sector and a tax on the productive sector is the last thing the New Zealand economy needs. 
The second part of Labour’s tax platform is to increase marginal tax rates on those who earn high incomes in New Zealand. Those are skilled people. They are the people we need to retain in New Zealand and attract back to New Zealand. How will Labour keep doctors in New Zealand if it taxes the guts out of them? They will go to Australia where they can earn more money. 
What will the Labour tax policy do? First of all it will hurt businesses it will hurt investment and it will hurt economic growth. Second of all it will tax those people whom we need to be working hard and building this country to be stronger. That tax policy will have a detrimental effect on this economy. It will put us in the decade of recessionary years that Labour planned. It will put us into the situation where we have a decade or two decades of deficits going forward. That tax policy has no economic justification and that is why the Green Party set it up. The Green Party does not understand economics and now this shows that Labour does not understand economics either. 
Let us look at the numbers. The numbers will be the big thing. I hope that Stuart Nash has done his numbers right because next week when he announces this policy everybody will be looking at those numbers. With the way they stack up now the Labour Party has problems because this tax policy will not be effective.