Alliance Party agrees with "traditional enemies" Treasury on capital gains tax

Alliance Party media release FOR IMMEDIATE RELEASE Thursday 4 June 2009

The Alliance Party says it agrees with "its traditional enemy" The Treasury on one tax issue: a capital gains tax on property investments is needed.

In a speech this week to the Institute of Directors, Treasury Secretary John Whitehead called for the introduction of a capital gains tax on property investments.

Alliance Party spokesperson Victor Billot says that strange as it may seem, the Alliance Party and the Treasury agreed on this one point.

Mr Billot says it is ridiculous and unfair that a low waged worker had to pay income tax on every dollar they earned, but property investors could walk away with vast profits from speculation that was harming society and the economy.

"The Alliance Party has long argued that a capital gains tax is necessary on all properties except the family home."

He says many people could no longer afford their own houses due to the speculation-driven housing market.

Mr Billot says the Alliance was however opposed to virtually every other suggestion of Treasury when it came to taxation.

He says the rest of the Treasury approach was suited to a Government department that was essentially the "bureaucratic wing of the National Party in drag."

"This is an ideologically driven organization of grey-suited bureaucrats dreaming of a utopia where a tax-free elite rules over the masses who toil around the clock to generate profits for the better type of people."

Mr Billot says Mr Whitehead's comments that reducing marginal tax rates would increase the rewards for effort were the kind of economic thinking that "went out of fashion in the days of Charles Dickens and the poorhouse."

Mr Billot says there appeared to be an assumption that people on lower wages were not making an effort compared to those on higher wages, a view which had no objective basis.

"Any society needs people to do a range of jobs. Is Mr Whitehead saying that only those on high incomes have made an effort?"

Mr Billot says that while the working class have worked harder and longer over the last generation, their share of wealth has been eroded both in wages and conditions, and the "social wage" of collective public services such as health and education.

"If you want to see the kind of world that Treasury officials want to create, just imagine a world that is very comfortable and beneficial to people like Treasury officials."

Mr Billot says the continued whining about high tax rates was a joke.

He says if New Zealanders want a health system, an education system and infrastructure that is available to everyone, then they would have to pay for it, and those who could afford it should contribute more.

"The reality is that countries that have high tax rates that pay for a stable society with strong public services in health, education and housing, such as Scandanavian countries, are far stronger and better for it."

"Do we really want to emulate an American-style free market society where millions are excluded from basic health care?"

ENDS

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