Talking point: Kiwis deserve to keep what they earn

What is the Government doing to encourage the economy to grow, asks Tukituki MP Lawrence Yule.

It took 18 months, it caused massive uncertainty for New Zealanders and the working group cost $2 million. National's relentless opposition and massive public resistance to a capital gains tax finally saw the Government back down from a policy that would have hurt New Zealanders.

National knew that a capital gains tax would damage small businesses, hurt mum and dad investors, stop investment in start-ups, and stop research and development. It also had the potential to take $65,000 away from the average person's KiwiSaver over their lifetime.

Immediately after the recent public meeting with Hon Simon Bridges a lovely lady approached me to say she had sold her 11 rental houses due to a possible capital gain tax. That is 11 houses no longer available to the 50 per cent of Kiwis who rent. Certainty and signals absolutely matter.

Labour made the argument that this was about making the tax system "fairer". But fairness isn't raiding someone's retirement fund that they've worked hard their whole life for. Investment has completely slowed down while business owners worry what the future looked like. That has made New Zealanders worse off.

Some say that NZ First should take the credit for stopping this. What nonsense.

If NZ First was serious about putting a stop to a capital gains tax it would have done it in coalition negotiations or said outright 18-months ago when Labour raised it.

Instead – it let New Zealanders live through 18 months of uncertainty while it watched the economy decline before finally deciding New Zealanders wouldn't stand for it. We knew that from the get go.

But don't be fooled that this tax happy Government won't still come for you. The Prime Minister has said she personally believes in a capital gains tax. And there are still a range of taxes on the table. They include a vacant land tax, an agricultural tax and a waste tax. New Zealanders simply can't trust Labour when it comes to tax.

Our economy was growing at 4 per cent two years ago – it's rapidly heading down to 2 per cent. The Government has no economic plan to speak of because it has sapped the confidence out of small business owners and mum and dad investors.

In the Government's so called year of delivery, they've dropped their flagship tax policy, a policy that the Prime Minister made the hallmark of her leadership.

She has finally had to concede what we knew all along – a capital gains tax isn't needed, isn't wanted, and would hurt New Zealanders. Remarkably the Prime Minister didn't even try to sell the concept before she ditched it.

The big question remains though, what is the Government doing to encourage the economy to grow?

Unlike the Government, National has a plan when it comes to the economy. We won't introduce any new taxes in our first term and we will index tax brackets to inflation.

National believes Kiwis deserve to keep more of what they earn.

Lawrence Yule is the National MP for Tukituki