Monday, 6 May 2019

The Left Wants To Upend Your Pockets

CGT Is Gone, But Govt's Ideology Remains

Mike Hosking
NZ Herald

One of the school holiday highlights was the news of the demise of the capital gains tax. It is wonderfully reassuring to acknowledge that once in a while common sense and good logic win the day.

This is not generally a government for listening. Education and workplace reforms are good examples of ideology winning over logic.  But in the CGT's case, the argument was so profound, the counter-debate from the Government so absent, it was almost dead on arrival out of the $2 million committee, which sits now as a glaring example of just how much of our money this lot are prepared to spend on groups and meetings that potentially go nowhere.

And in that is the clue as to why so much of the reaction to the demise of the CGT might well have been misplaced. Many argued that National was the big loser, that they no longer had the major plank to run on next year, and Ardern, in some sort of stroke of political genius, has whipped the rug out from under them.

I'm not sure whether the media that peddled that line still haven't woken up from the sycophantic spell they've been under for the past year and a half, or that they're just thick.
  But little could be further from the truth. What needs to be remembered is two things. One, a CGT might be off the table, but other tax increases or new taxes aren't. Two, this is a government that likes to spend your money.

Never forget the tax cuts we would have been enjoying right here and right now were cancelled by this lot, and have been handed out to the hundreds of committees and working groups wandering the country coming up with their never ending series of reports.

Every time Shane Jones writes a cheque for the Provincial Growth Fund, that's your money that's not in your back pocket. The Auckland rail loop disaster, that's gone from two, to three, to four, to lord knows how many billion, that's your money. The petrol tax is your money.

And so it goes.

A CGT is gone, but there is any number of other taxes this lot will be very closely considering to make up the difference. Why? Because, one, they're re-distributors. And, two, the CGT was going to raise $8 billion in quick order. That money was needed for all the promises, and they have to find a way to make up the shortfall. Watch out for a new tax bracket for high income earners, for example.

The ideology of this government hasn't changed, even if one of their mechanisms has.  And that is the bit that is to National's advantage. It is the difference between the centre right and the centre left. The right don't want your money as badly, they favour graft and self reliance. The left know best and want to upend your pockets.

That basic philosophy hasn't changed, and therefore the ideological debate is as relevant and alive as it ever was.

So let's see the CGT back down for what it was. A hopeless idea, a hopeless execution, run by amateurs who got out-debated, out-argued, and out-thought from the get go.

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