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Labour invents another non-existent document

If the Labour Party wants its economic policies to be taken seriously it needs to stop making up stuff.

The trouble is, its front bench MPs are starting to believe their own bullshi*t.

This week Labour finance spokesman David Parker tried to table in Parliament a document which does not exist.

Coming as it did within 10 days of his leader, David Shearer, making a big fuss over a tape of Prime Minister John Key which turned out to have similarly ectoplasmic characteristics, this seems to be a trend in Labour political tactics.

The effort came amid a testy exchange over economic policy.

The usually mild-mannered Mr Parker sought leave to table a series of documents which he says support New Zealand adopting what he called “Labour’s pro-growth capital gains tax”.

These included reports “from the OECD, the IMF, Treasury, and the Reserve Bank”, he claimed.

Not the first time

Mr Parker is not the first Labour MP to claim the Reserve Bank supports a capital gains tax: Mr Shearer and former finance spokesman David Cunliffe regularly make similar claims.

It’s not true. What is more they know it is not true, which is why they are usually careful to trot out this claim in front of audiences who do not know any better.

Mr Parker realised his mistake and backtracked. When asked by Speaker Lockwood Smith to name the reports, he said he could not put a date on the Reserve Bank document “so I will not pursue it”.

Labour’s proposed capital gains tax would be imposed on the country’s businesses and, while it excludes owner-occupied housing, it includes any part of the family home which is used as a home office or similar premises used for business.

It would also not be paid until a property is sold. And it would also catch the family home if it is not sold before the owners die. A family home which is inherited by offspring and then sold by them would be hit by the tax.

The only time the Reserve Bank has specifically addressed such a tax it has rejected it. This was in a submission to the Productivity Commission late last year on housing affordability.

Has never taken a stance

In a particularly pointed comment aimed squarely at Labour’s tendency to just make up stuff, the Reserve Bank said it has "never taken a stance on the general merits or otherwise of capital gains taxes".

But the mix advocated by Labour – which the Reserve Bank carefully did not specifically mention by name – would create more rather than fewer distortions and would not do the job Labour politicians claim it will.

"In practice, capital gains taxes are only levied on realised gains (rather than accruals), which creates additional distortions ... capital gains taxes usually largely exclude owner-occupied houses, even though unleveraged owner-occupied housing is the most lightly taxed component of the housing stock."

Any new capital gains tax "should only tax real capital gains and needs to treat gains and losses relatively symmetrically”.

"Tax regimes can be shown to influence both the level and volatility of house prices ... especially when supply responses are sluggish. But countries with a variety of tax regimes experienced similar housing booms in the mid to late 2000s.

"Moreover, it is not clear that, in aggregate, housing is more tax favoured in New Zealand than in other countries. For example, householders in the US can deduct owner-occupier interest payments for tax purposes and in most cases face no capital gains tax.

"In addition, relatively high local government rates in New Zealand, compared to other countries, act as a tax on property ownership."

High degree of duplicity

Mr Parker’s claim about Treasury does not have quite the same level of shameless make-believe, but there is still a high degree of duplicity.

Treasury has been advocating a capital gains tax for at least 20 years. However, it does not advocate the same one Labour is proposing – to avoid the kind of distortions the Reserve Bank talks about.

A capital gains tax should go on all assets, including the family home, Treasury says, and it should be on an accrual basis – that is, paid with other tax each year according to the change in value of an asset.

This includes a tax rebate if the value of an asset falls, which is something Labour’s proposals lack.

Treasury also notes any new tax on capital gains should be offset by lower personal income taxes, whereas Labour is advocating higher personal taxes.

Calling Labour’s line on this “double-talk” is putting it politely.  

But it shows how far Mr Parker and his colleages have started believing their own duplicity when they start citing documents which do not exist outside their own spin. 

More by Rob Hosking

Comments and questions

A desultory bunch of desperate drongos, trying to get noticed. No different to a solitary patron in a cinema, yelling out - Fire!

…and this is just another example of why Labour have zero credibility… and why it’s so easy for the Watermelons to eat into Labour’s polling.

Couple their make-believe stories and fabricated bullsh*t with all manner of other instances also – like Auntie’s $840K pledge card they expected the public to pay for, Labour’s so-called “fact sheets” that had anything but, their corrupt MP’s and toxic aspect of their party called the unions…. And fabricating stories to lend their fabricated “crisis’s” a small form of legitimacy, is just the beginning of how things work in the Nasty Party.

Then there’s Shearer’s Mr. Roofus Painter, “rising star” MP’s causing naked, intoxicated male teenagers to flee naked from the deputy leaders house at 3am, wanker MP’s selling passports for $15K political donations (whilst Interpol strenuously oppose and warn against these actions)

Then there’s Labour’s propensity to front the deliberate lies and propaganda spouted by the unions… like how they push the teaching unions agenda’s (along with TV3’s shriller at 7pm John Campbell) simply because the unions oppose any form of attempting to achieve greater outcomes for students – because it would then mean unions can no longer shelter teachers who under perform… Why would any political party in NZ oppose students trying to achieve greater outcomes?

Then there’s Labour’s main funder’s – the unions – and how some have lost millions and millions and aren’t filing minimum legal annual reporting requirements. They’ve been operate illegally for years – and are Labour’s bully boys and main funders. The unions operate only slightly more legally than mafia…

NZ is tired of a political party so corrupt, bereft of any alternatives to offer – even credible alternatives and all of Labour’s made-up nastiness attempting to make their opponents “bad” through on-going smear campaigns, so they can appear to be “good”

Yep – come next election, Labour will be the minor coalition party to the watermelons… simply because as flakey as the watermelons are – at least they don’t continually bullsh*t – unless it’s about more AGW bull sh*t that helps support their greenwashing propaganda.

Congrats - undoubtedly your most prejudiced contribution to date. You are now not just blinkered but blind to the applicability of all of your general accusations to National (and probably most of the other parties as well)!

Thank you Anony – yep – it quite possible is. It’s also completely factual based on exact examples demonstrated by the Labour Party over the last few years…

So my reply to you is don’t blame the messenger if you don’t like the message.

But I totally agree with you – Labour have demonstrated themselves to be no where near credible enough to run a kindergarten – let alone our country and economy.

Dear oh dear - your idea of facts versus opinion and allegations clearly disqualifies you from any form of rational discussion. And it is the lack of rational discussion about options that is stifling New Zealand's economic growth. I don't pretend to know the answers. but I sure as heck would prefer to hear some proper discussion about things that doesn't get bogged down into emotion or blind ideology

"doesn't get bogged down into emotion or blind ideology"

Well - please do tell where my examples of behaviour and events demonstrated by the Labour Party and their corrupt MP's is not fact?

There's numerous examples - each one backed up by examples and facts - so it seems the only one blinded by ideology is yourself...

Remember - when you point a finger at someone - you have 3 pointed back at yourself...

Yup you have convinced yourself brilliantly.

The only possible Labour Candidate capable to toppling John KEY is Jacinda it now to have any chance of winning in 2014.

If Jacinda ARDERN is Labour's best hope, better start reading the last rites, now.

Reading blindly on only part of the story....Wise readers are not only good at reading and also good judges as well. All Genuine Labour Supporters, wake up before it too late to realise that the only possible Labour Candidate capable to toppling John KEY is Jacinda really have to do it now to have any chance of winning in 2014.

If Jacinda Ardern is the answer, it must have been an especially inane question!

You can always judge either a dog or a cat, but any other human being. Wonder whether you have actually and successfully predicted the previous PMs as

Hosking i understand more clearly now why u write for the NATIONAL business review. Always interesting 2 to drop in for a read about the latest dellusions govt supporters are feeding each other. Bring on a capital gains tax and the quantative easing thats helped stimulate the worlds largest economy and benefits more than just the greedy.

Sounds like typical Labour party dribble. You obviously stand to gain some how from this proposed tax while the rest of the county loses. The last thing New Zealand needs is more taxes and most of all the Labour party. A Labour government all ways ends in recession because of stupid polices the country can't afford and far to many civil servants.

The only losers within a carefully positioned cgt are nzs current bevy of tax dodgers. A financial transaction tax will mop up the rest of the cheating bludgers.

Anonymous, the laughable thing about your comment is that the "current bevy of tax dodgers" is made up mostly of middle and lower class earners!
And, there is no such thing as a carefuly positioned CGT. Perhaps if you researched say, Australias, you would see the pitfalls. Oh, and on Australia's CGT, it hasnt done much to reduce prices in Sydney.

So it's Treasury that support the idea of a CPT...."A capital gains tax should go on all assets, including the family home, Treasury says, and it should be on an accrual basis – that is, paid with other tax each year according to the change in value of an asset...."

That would be great as criminals that amass assets through illegal activity would get taxed out of existence...or at least out of NZ. Would also stop house prices doubling every 7 years on average as they do now. I understand same system works well the Netherlands and house prices their remain static.

Looking across the pond it's pretty easy to that financial inequality has come like a plague to the U.S. As much as free marketeers prattle on about letting the market decide, much of the market is socially engineered by manufacturers, corporations and a would be oligarchy. Reciprocity and redistribution are economic mechanisms that have a history far more stable over longer periods of time than the so-called self regulating market. Capital gains tax is one of many methods of dealing with unnaturally large disparities in wealth. And, yes, I did say unnatural. I quite agree that government social engineering has not been altogether entirely successful, but there are plenty of people in the U.S., Europe, and soon to be Australasia, that won't mind intervention by governments for the benefit of the common good, over the interests of private gain. The simple fact is that 'natural socialism' cannot be extinguished, whereas the oxymoron of 'natural capitalism' can be neutralized quite effectively.

This columnist seems as least as delusional as those he accuses. He clealry has no idea.

This appears to be a fabricated article by an apparent national shill. I personally think it has no credibility. This 'writer' seems to be simply an inflammatory troll working as part of the media component of the national party, 'embedded' as it were. BTW, the biggest bludgers in NZ IMHO are the PPP bosses that get huge remunerations for 'staying on' and huge golden handshakes when they decide not to. Also, the fact is that the left-right political dichotomy is a fraud, only a smokescreen designed to distract the public from the real problem, which is billionaire bankers, who are the ones who own the political systems and multinational corporations across the globe and who wage wars for profit.

Glad I don't follow the NBR. Seems to be loaded by small minded, greedy, mean spirited people. I know that there are smart, successful business people that do have compassion and are not greedy B's.

Its all about fairness phil. How many material possessions does it take for a person to feel valued and content? Especially when others are so clearly suffering. Excessive consumption is an obscenity. Share. Its good.

It never ceases to amaze me the number of people who comment in favour of organisations, in this case Labour, who continue to spout nonsense, lies and twists of truth in order to gain political momentum. This is highlighted by both the article above and some of the comments made in relation to it.
In the case of capital gains tax, take a good look at the costs imposed upon New Zealanders at present and then ask yourself whether anyone (other than the Labour team) would really benefit from the sort of capital gains tax proposal Labour is suggesting. Before 'voting' for a gains tax, as some commenters have suggested, I'd be doing my research somewhat more thoroughly first - or many may well find unnecessary costs imposed on them greater than they expected.

Gee whiz, who would possibly want to ensure the large capital profits you make are actually taxed so that we all share the tax burden fairly?

Shearer will release me when it is time folks...Be patient....