Jacinda just won the 2020 election

Jacinda Ardern has ruled out the introduction of a capital gains tax in New Zealand. She claimed that, even though the Tax Working Group had recommended it, the government could not reach a consensus on the issue. As we know that both Labour and the Greens desperately wanted it, there is only one conclusion that we can come to. The tax was stopped by Winston.

You all know I am no Winston fan, but I will say it nonetheless. Well done Winston. We are in your debt.

I genuinely believe there are inequities in our tax system that a capital gains tax in some form could have helped to resolve. That?s an argument Labour has made as a party since 2011.

However after almost a decade campaigning on it, and after forming a government that represented the majority of New Zealanders, we have been unable to build a mandate for a capital gains tax. While I have believed in a CGT, it?s clear many New Zealanders do not. That is why I am also ruling out a capital gains tax under my leadership in the future.

          Jacinda Ardern

Tax reform is dead. Yes, there is talk about tightening rules around land speculation and land banking, but there is nothing new here. Nor is there anything exciting about trying to make multinational companies pay more tax. It is all old hat. The tax reforms of this transformative government are dust.

The problem, if there is a problem at all with this, is that it leaves the opposition completely empty-handed. The CGT discussion would have gone on from now until the election next year, giving National a wonderful platform with which to beat the government. Now, it has nothing. Judith Collins can continue to beat up Phil Twyford over Kiwibuild, but there is nothing new in that either. National just lost the cornerstone of its 2020 election campaign.

If Simon Bridges was not finished as leader before this happened, he most certainly is history now.

New Zealand First Leader Winston Peters has welcomed Cabinet?s decision not to implement an extension of capital gains taxation, following the Prime Minister?s statement in response to the Tax Working Group Report. ?This decision provides certainty to taxpayers and businesses. We in New Zealand First wanted first and foremost for New Zealanders to have time to discuss and debate the contents of the report,? stated Mr Peters. ?During that time we have listened very carefully to the public. There is already an effective capital gains tax through the Bright Line test brought in by the last National Government and New Zealand First?s view is that there is neither a compelling rationale nor mandate to institute a comprehensive capital gains tax regime,? said Mr Peters.

Well, we can speculate about what an incredible waste of money this whole shambles turned out to be, but one thing is for sure. Jacinda did this because she did not want to lose next year’s election. If the debate and rhetoric had been strong after the TWG’s report came out, you can imagine what it would have been like once the government announced it was implementing CGT. The government and  Jacinda with it would have been crucified.

Personally, I am very glad this tax is not going ahead. It would mostly have been a tax on inflation, and that is never a good thing. People would have been poorer as a result and there really is no evidence to suggest that the poor would get richer because of CGT.

There is one glimmer of hope out of all of this though. Do you remember how James Shaw said the government did not deserve to be re-elected if it did not implement a CGT? Does this mean that the Greens will cease to be a part of the government, and go back to the opposition benches and campaign from there?

Of course not. The supposedly principled ones have no such principles. But for now, we have been delivered a double-edged sword. We will have no CGT in New Zealand and we will have a Labour government at least until 2023.