Tax Justice Aotearoa launches campaign pushing for capital gains tax

Tax Working Group chairman Sir Michael Cullen outlining the details of a proposed capital gains tax in February. Photo / Mark Mitchell

A nationwide campaign pushing for a capital gains tax is being launched today by Tax Justice Aotearoa NZ.

The campaign, which is officially launched at Parliament at 10am, is backed by advertising in major newspapers across the country, and on billboards and in bus shelters in Wellington.

"The campaign will add balance to the current tax debate and give voice to the many people and organisations who believe it's time for a capital gains tax to help reduce inequality in Aotearoa," the group said in a statement.

As well as a capital gains tax, the campaign calls for tax cuts for low to middle income-earners and hikes for the highest paid.

It also suggests reducing GST, pressuring multinationals to pay more tax in New Zealand and taking stronger tax action against polluters.

Campaign supporters include the Public Health Association, New Zealand Council of
Christian Social Services, Council of Trade Unions, Public Service Association, Hui E! Community Aotearoa, Equality Network, Closing the Gap, Poverty Action Waikato, and UCAN (United Community Action Network).

An advertisement in today's New Zealand Herald from the group said tax reform was good for the public good.

"Tax Justice Aotearoa welcomes tax reform. It's well known we have a stubborn gap between rich and poor and we don't have enough money to sustain and grow decent public services."

Tax Justice Aotearoa, which is part of a global network that launched here last August, has also begun a petition - Tell Jacinda we want a capital gains tax. It's time to join the modern world.

By yesterday afternoon, 157 people had signed it.

The Government is still assessing the proposal, put forward by Sir Michael Cullen's Tax Working Group, and will respond by the end of the month.

It has said it is not bound by any of the recommendations of the group and any tax regime changes, including a capital gains tax, would be put to voters as policy in the 2020 election campaign before being introduced.

MYOB's annual business monitor released last week showed small and medium-sized businesses strongly opposed a Capital Gains Tax.

The research said 67 per cent of the 1000 small businesses surveyed were against the proposal.

Around 48 per cent of those surveyed said they were strongly against the proposed introduction of a tax on profits made from the sale of assets including land, shares, investment property, business and intellectual property.

An additional 19 per cent said they were against the proposal.

National leader Simon Bridges said the Government had ignored small businesses.

"Small businesses make up 97 per cent of all businesses but the Government is ignoring them and the damage it would inflict. No wonder the economy is weakening, business confidence is near record lows and the Reserve Bank is considering rate cuts," he said in a statement.

"It may surprise the Government that small businesses are unhappy because it isn't listening. The Tax Working Group didn't even count small businesses when it tried to estimate how much extra revenue the Government would take from a Capital Gains Tax.

"The Tax Working Group report says elements of the tax base including shares in private companies and intangible property such as goodwill 'are not known and so are not costed'. That means it didn't count small businesses or the value of their owners' hard slog.

"A Capital Gains Tax would hit kitchen-table start-ups, those wanting to raise capital and it would clobber business owners who want to sell up and retire. Before then they'd be hit with increased costs such as having to get their business valued," Bridges said.