Boscawen John: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
Boscawen John: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 14 July 2011. Volume:674;Page:20111. Text is incorporated into the Bound Volume.] 
3. 
Hon JOHN BOSCAWEN (Leader—ACT) 
 to the  
Minister of Finance 
: How much money would a capital gains tax raise in each year for the next five years? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 A capital gains tax will not raise money for each of the next 5 years because given its complexity it probably cannot start until 1 April 2014. Based on Treasury’s modelling a 15 percent capital gains tax that does not apply to existing assets would raise about $1.3 billion in total over 5 financial years. If the policy is applied to assets people already own it might raise about $2.3 billion in total over 5 financial years—that is by 2019. 
Hon John Boscawen 
: How does the revenue from a capital gains tax compare with the cost of spending promises that have been bandied about such as making the first $5000 of income tax-free removing GST from fresh fruit and vegetables and restoring the research and development tax credit? 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. How does one hypothetical thing compare with something for which the Minister has no responsibility? It cannot possibly be a valid question. 
Mr SPEAKER 
: I was thinking along very similar lines. The only thing that stopped me from interrupting the member is that he did not attribute policies to any particular party and as long as the Minister when answering does not attribute policies to any other party I am prepared to let it go. The Minister has heard what I have said that he is not responsible for any other party’s policies but he can comment on hypothetical situations regarding policies as long as he does attribute them to another political party. 
Hon BILL ENGLISH 
: I understand that a $5000 tax-free threshold would cost about $1.3 billion a year and that is just one of the policies the member listed. But if we stick just to that one a 15 percent capital gains tax would cover the cost of that particular policy by 2024. In the 12 years up until then the capital gains tax would not cover the cost of just that policy let alone the others. 
Hon Trevor Mallard 
: Does he stand by this statement: “The right thing to do would be to have a comprehensive capital gains tax.” which was said by him this week? 
Hon BILL ENGLISH 
: I was referring to the fact that any number of people who are putting forward a theoretically ideal tax position advocate a comprehensive capital gains tax. No one in New Zealand—not even Labour—has indicated that that is what they are going to do. In any case more taxing and more spending will grow the Government but it will be bad for the economy. 
Hon John Boscawen 
: Does he agree that the real problem is politicians promising to spend money they do not have and inventing new taxes to pay for their promises? 
Hon BILL ENGLISH 
: That might be a problem. I think the real issues for the economy are to get our people and our capital into productive investment and the Government has over the last three Budgets taken some very big strides to improve the prospect that New Zealanders can have higher incomes. We have done that by controlling spending and reducing taxes because increasing spending and increasing taxes got us into this trouble in the first place. 
Hon Trevor Mallard 
: When the Minister said: “The right thing to do would be to have a comprehensive capital gains tax.” did he mean that he thinks that that tax should include taxing the family home? 
Hon BILL ENGLISH 
: No. The member is up to his usual tricks. Labour members have quoted the IMF the OECD and Treasury and when those organisations advocate a capital gains tax they mean a comprehensive capital gains tax on all assets. I understand that no one in New Zealand is advocating actually doing that.