More confusion over Labour’s tax plans

Labour has sown more confusion over its position on another tax after leader Jacinda Ardern was forced to backtrack on comments over a potential land tax.

The party's position has been the family home would be exempted from any capital gains tax that may be recommended by a working group of experts if it's elected to government.

But when asked about the party's position on a land tax – an annual levy based on the value of the land the house is on – Ms Ardern wouldn't rule it out as an option to be considered by the working group.

“There are many complications with the way a land tax works. The simplest way I can convey this is our target is not the family home," she told media.

When pressed she left the door open for the group to consider a tax on the land the family home was on.

“The rest is for the working group to work through.”

But just hours later, she was forced to clarify her position.

In an interview with RNZ, the Labour leader said any tax – including a land tax – that would fall on the family home was “completely off the table."

She said she would direct the tax working group to stay away from any policies that would affect the home or the land on which it is built.

“My message will be very clear to them – do not bring me any recommendation that includes the family home or the land that a family home sits on.”

A land tax is not completely ruled out though, she says, as long as the family home is exempted.

Staples Rodway tax director Andrew Dickeson says Labour’s changing position on these important tax issues is creating a lot of confusion for voters.

He says unanswered questions about the tax working group itself is the “big elephant in the room” for tax experts and their clients.

“As an advisor, it’s impossible to advise because there are no parameters around the scope as such – it’s so lacking in detail.”

He says even some of the fundamentals, such as who the group will comprise of, when will it meet, and when and to what extent their recommendations be adopted, are still unclear.

This is not the first time a senior Labour party MP has been forced to backtrack on comments made about tax.

Deputy leader Kelvin Davis was pulled into line by Ms Ardern last week after getting details wrong about when Labour would campaign on a capital gains tax.

Mr Davis was asked on the AM Show if Labour planned to put the outcomes of its tax working group to the country at the following election.

He initially said he “can’t answer that” but after being pressed said it was his “understanding we’ll be campaigning on it in the next election.”

Labour’s position is the party could adopt the recommendations of the working group during its first term.

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