This is edition 2025/195 of the Ten@10 newsletter.
Hi all,
This is the Ten@10, where I collate and summarise ten news items you generally won't see in the mainstream media.
Enjoy!
1. Labour offers Kiwis about $4.27 a week in exchange for CGT
Ani O'Brien
- 🏛️ Labour's CGT Announcement: Chris Hipkins introduces a narrow Capital Gains Tax (CGT) targeting profits from investment and commercial properties sold after July 2027. The proceeds will fund three free GP visits per year.
- 💡 Tax Issues: Excludes family homes, farms, small businesses, and KiwiSaver, making the CGT less impactful. Critics argue these exclusions undermine the policy’s purpose.
- 💬 Economic Concerns: Economist Tony Burton points out that taxing family homes and farms is key for a successful CGT. Without that, the policy's economic benefits are minimal, with significant revenue increases expected only after 5-10 years.
- 💰 Medicard's Symbolic Benefit: The promise of free GP visits is mostly symbolic, as under-18s already receive them. The financial saving for individuals is small—up to $222 per year, or about $4.27 per week.
- 🏥 Implementation Costs: The cost of setting up the Medicard system (IT, eligibility checks, bureaucracy) may outweigh the benefits, making it a costly initiative with limited returns.
- 📉 Fiscal Challenges Ignored: Economist Eric Crampton argues the real issue is the looming fiscal challenges due to an aging population and health spending. Labour’s tax doesn’t address these structural problems and just promotes short-term spending.
- ⚖️ Call for Reform: Critics suggest Labour should propose a broad-based CGT and focus on strengthening the health system, rather than offering superficial solutions like Medicard. The policy lacks real reform and doesn’t address New Zealand's long-term fiscal issues.
