Fran O'Sullivan: Andrew Little's grab for territory is weak

Andrew Little's reluctance to toughen up capital gains provisions leaves National room to argue they're tougher on property speculators than Labour. Photo / Getty Images

If Andrew Little was hoping to craft a new Labour playbook, last weekend's sop to the party faithful at their annual conference was remarkably effete.

Little would have had more credibility if his cancellation of Labour's unworkable NZ Power policy had been accompanied with an apology for the gigantic short the party placed under the Government's electricity sector IPOs.

Spooking the sharemarket wiped multi-millions from the revenue that the taxpayer should have netted from the partial privatisations.

It resulted in a massive transfer of wealth to investors that should have accrued to the Crown.

Labour activists have also allowed themselves to be seduced if they believe that parking their 2014 election policies - such as capital gains taxes and hiking the age of eligibility for national superannuation - will be seen as anything more than the misguided grab for power that it is.

Little's inoculations are not acts of policy bravura.

The brute reality is that John Key and Bill English have already imposed a capital gains on residential investment properties and wiped depreciation on commercial buildings and residential properties.

This simple fact must have escaped Little's notice when he told TV3's The Nation that Labour would not introduce a capital gains tax in its first term in office. "We won't introduce any change that significant to the tax system, any material change to the tax system, without going to the people first and getting a mandate to do so."

Sorry, Andrew - New Zealand already has one.

Further Key and English did not seek an electoral mandate before they imposed a capital gains on residential investment properties from October 1. They just got on and did it.

It would be a simple exercise for a future Labour Government to simply extend the bright line test from two years to five, 10 or more years when it comes to realising the capital gains from the sale of residential investment properties. But it seems that Labour is now concerned this might impact on capitalistically-minded New Zealanders who have bought the odd renter or two as a hedge against funding their retirements.

While this is laudable from an investor's perspective, Little has unwittingly handed Key a powerful wedge at the next election to argue that National is tougher on property speculators than Labour is.

Neither did Key and English seek an electoral mandate before introducing the 2010 tax switch by hiking GST to 15 per cent to partially fund personal and company income tax reductions.

Nor did the Key Government ask voters for permission before banning depreciation on commercial properties and residential housing.

It's obvious that National will also whack GST on digital sales well before the next election, thus bringing offshore acquisitions into the tax net.

Instead of knowing what Labour stands for, Little has simply introduced more policy uncertainty.

Even the Future of Work programme, which while worthy and a topic for conversation worldwide in an age where digital disruption and new technologies are cutting a swathe through traditional jobs, will be overtaken next year by more immediate concerns like the anticipated increase of unemployment.

Sure, Little tabled Labour's intention to focus on poverty, homelessness and unemployment.

But in truth all he has done is produce a blank canvas that on current performance Key will write on before he gets his pen out.