CGT Reactionary, Ruinous, Retrograde and Wrong - Brash

It's a sad day when the Labour Party retrieves and brandishes rusty old bludgeons from nasty old socialist dungeons, says ACT New Zealand Leader Dr Don Brash.

Responding to Labour's proposals for a Capital Gains Tax of 15 per cent and increased personal tax rates on incomes above $150,000 announced today, Dr Brash says Labour has blown an opportunity to re-establish itself as a forward-looking party that is economically as well as socially liberal, as the Lange-Douglas Government was. It has addressed a real crisis with an unrealistic, unimaginative and unwieldy solution, fraught with exceptions and exemptions.

"What we need right now is to grow the economy, not the government," says Dr Brash. "This is not a time to be introducing new taxes and raising existing ones. Labour's CGT is quite simply a proposal to punish success. It is politics and economics as if envy mattered.

"A Capital Gains Tax means you are clobbered twice: once when you create or earn wealth, the second time when you dispose of it. The fact that we already have it in some form is no excuse for extending it.

"Yes, our fiscal situation is serious. But the main reason for that is the on-going failure of successive governments to bring their own spending under control. And the main reason for that is burgeoning monolithic government that would have even Michael Joseph Savage, Peter Fraser and Walter Nash rolling in their graves.

"These champions of the common man and woman would be ashamed of what Phil Goff is advocating. Imagine their reaction to taxing profits on the sale of family baches!

"Under Michael Joseph Savage in the late thirties, government spending was about 20% of GDP. Under Michael Cullen, in 2005, it was 29%. It is now around 36%.

"ACT proposes in the short term to reduce it to Michael Cullen's level. Long term, we advocate a serious assault on both spending and taxes, with the former capped and the latter low and flat. We want an ethos where entrepreneurialism is celebrated and success rewarded. I'll be announcing detailed policy in due course.

"Phil Goff has gambled that pushing the envy button will return Labour to the treasury benches. Every indication thus far is that he's underestimated the intelligence and common decency of the electorate with this retrograde and unseemly policy," Dr Brash concludes.

ENDS

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