John Minto: MPs Join Hands In Common Cause With The Wealthy

Buried in the clamour around the budget was at least one story which deserved greater attention.

The latest Register of Pecuniary Interests of our MPs was released last week showing that 71 of our 120 MPs (59%) reported a financial interest in more than one property and 81 (67%) declared an interest in a trust. If you have ever wondered why MPs have been cold on introducing a capital gains tax or closing family trust tax loopholes then look no further than the personal financial interests of our elected representatives.

Most MPs are feeding furiously at the trough. They are part of the problem and a roadblock to progress.

Almost all comparable countries have a capital gains tax and even right-wing business commentators have long recognized the need for New Zealand to do the same. The justification lies in encouraging people to invest in productive economic activity rather than property.

It's no wonder people avoid gambling on the sharemarket or investing in finance companies. Our economy has been brought near collapse by these cowboys who have ruined the lives of so many older New Zealanders.

Investing in property has been a safer bet with not just an unearned income from rents but also the prospect of big unearned capital gains when the property is eventually sold.

The outcome has been high property prices with declining levels of home ownership as houses move further from the reach of most families. Rental prices have likewise increased dramatically so low and middle income families are screwed whichever way they look.

It wasn't surprising to see Act MP Hilary Calvert near the top of the property list. She gave up productive work some time back to manage her extensive 23-property portfolio. It's a wonder she had time to meet Don Brash and give him the nod to purchase the Act leadership on behalf of New Zealand's moneyed elite.

As it stands well over half our elected MPs have a personal vested interest in fighting off a capital gains tax and a similar story applies to family trusts which are most commonly used for tax avoidance. Trusts can be used to disguise real income and high salary earners only need declare a small portion of their actual income for tax purposes. It's no surprise an Inland Revenue Department report last year found a high proportion of New Zealand's highest income earners were not paying the top rate of income tax.

We shouldn't be fooled into thinking these loopholes can't be closed a lot more easily than we are told. MPs have a vested interest in derailing attempts to get them and other high-income earners to pay their fair share of taxation.

It's easy to imagine when these issues come up at caucus how MPs can contrive a myriad of excuses to question the validity of such tax changes. They will call for more reports, more investigation and more smokescreens to delay or derail such proposals.

Instead National votes in GST increases on the poor with Labour saying it will go along with National's increase but give a sop to the poor by removing GST from fresh fruit and vegetables.

The moral callibre of our MPs has never been regarded as high. Too many of our elected representatives are motivated by self-interest and personal greed when it comes to considering tax policy.

A few decades back this was much less the case because MP salaries were more modest in relation to the rest of us. If parliament is to be a genuine reflection of the community then pegging MPs salaries to the median income would be a good start.

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