Winston Peters: Between rock and hard place

There is nothing surer in life than death and taxes and, in New Zealand, there are almost as many ways of being taxed as there are of dying.
Both are as inevitable as they are unwelcome and, in the next 18 weeks, we're going to hear a lot about taxation. That certainty arises from the challenge to every new political promise, "where is the money coming from?"
It may come as a surprise that we have more taxation law with greater complexity than the world's largest economy, the United States. Our tax laws are so complex that few businessmen or women, no matter how successful, understand them and that incomprehension extends to the accountancy profession and the judiciary.
There are veritable armies of accountants whose working days are dedicated to advising clients on the law while at the same time confronting an Inland Revenue Department which, in recent times, has demonstrated its inability to understand the laws it is charged with enforcing.
The question is how did this arise in a population of four million? The answer lies in the ad hoc nature of New Zealand's tax law over many years. Rather than go back to first principles of simplicity and understanding, Parliament and the department have monotonously tinkered when new untainted law would have served our economy far more effectively.
Perhaps complexity explains why in other countries so many more tax dodgers end up in prison and so many in New Zealand go scot-free. Could this phenomenon explain our reluctance to properly admonish such behaviour and law enforcement authorities taking a light-handed view to offenders?
Whatever the answer, the system needs to explain why so many income earners and companies pay little or no tax in New Zealand. Recently Sam Morgan, founder of Trade Me, to his great credit, publicly lamented this sad state of affairs of which he was a bewildered beneficiary.
When someone like Morgan, bright, innovative, creative, and a trailblazer finds our tax law difficult to understand then surely the system should listen.
This week, the Labour Party announced its policy on a capital gains tax. One more tax bound to give the so-called tax experts lots of future work. Already battalions are lining up for and against but will we be any the wiser on election day?
The devil is in the detail and there is certainly not enough detail here. All but two countries in the OECD have a form of capital gains tax. Turkey does not and New Zealand has only small parts of such a tax. The PIGS: Portugal, Ireland, Greece and Spain have a capital gains tax and it didn't seem to quench their thirst for real estate.
So does Italy and that economy is in serious trouble, with dire consequences for the EU and the rest of us. Internationally a capital gains tax, though regarded as fairer, is complex and unpopular. This is not helped by the debate now swirling around us, sadly aligned to vested interests, political persuasions and, in some quarters, the dream of dealing to their political nemeses. A sort of "he's rich so he must have cheated somebody and probably us".
There lies the problem for the voter. For a capital gains tax is being pitched as the only alternative to asset sales. It's argued that acceptance of this tax will avoid us having to sell key strategic assets. Both propositions in this argument are false.
First, selling the family silver is a band-aid solution with a serious down-side: more profits from New Zealand resources going offshore.
Second, a capital gains tax that is not comprehensive will bring in much less than calculated and over a longer time. It has, therefore, no immediate upside.
Which leaves the New Zealand taxpayer caught between a rock and a hard place. Two unpopular policies framed as alternatives when neither is really the answer. It is not that New Zealanders are not paying enough tax, or working hard enough, or saving enough, or spending money on the wrong consumer choices.
New Zealanders' preoccupation with real estate arose from the sharemarket and finance-house jungle where the law protected directors, not investors. That law has still not been fixed.
Nothing much will change our slide in the ranks of the First World economies until we recognise that nearly every economic, and most social policies, need to be targeted to a much superior economic performance.
We are export dependent and, until our economic and social policies reflect that, we will not realise our potential.
Education, science, the new IT revolution, research and development, immigration, primary production, and taxation policies all need to be shaped towards an export nation power house.
It is only when a New Zealander earns a foreign dollar to spend in New Zealand that the "Family New Zealand" benefits. Exporting has many forms, from the family on the farm to the woman using IT in her office doing business offshore. Australia has 75 mechanisms to help its exporters. New Zealand has virtually none.
Which all points to a brilliant future, if only we could get that through our heads.
Due to the upcoming election, this column could be seen by some as giving unfair political advantage which is why it is my last in this medium.