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Speaker 1: Addressing the newsmakers to get the real story. It's Heather

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Speaker 1: duper clan drive with one New Zealand to coverage like

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Speaker 1: no one else newsg ZB, Good afternoon.

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Speaker 2: Labor has announced it we'll introduce a twenty eight percent

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Speaker 2: capital gains tax if it wins the election next year.

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Speaker 2: It's been forced to announce the tax today after it

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Speaker 2: was leaked to media. The tax will apply to residential properties,

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Speaker 2: residential rental properties, commercial properties, second homes, the family home, farms,

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Speaker 2: shares and inheritances will all be exempt. Labour says it

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Speaker 2: will use the money to pay for everyone to have

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Speaker 2: three free GP visits a year, and the Labor Party

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Speaker 2: leader Chris Hipkins is with us now, hichib.

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Speaker 3: God I Heather, do you know who elect it? No?

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Speaker 3: I don't and I'm not going to get into that

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Speaker 3: speculation game. I think what New Zealanders need to hear

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Speaker 3: from all of this is that they will be able

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Speaker 3: to go and visit the doctor for free, and that

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Speaker 3: we will pay for that through the introduction of a

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Speaker 3: very simple capital gainstory.

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Speaker 2: When were you planning to announce it?

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Speaker 3: We had it down to be announced this week.

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Speaker 2: Anyway, Okay, do you think it was a militia sleek

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Speaker 2: or somebody just getting excited.

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Speaker 3: I just don't know how the information came to be

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Speaker 3: in the public domain. But if it was a malicious

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Speaker 3: leak and we find out who did it, then that

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Speaker 3: person will no longer be a member of the labor paty.

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Speaker 2: Okay, now do you how sure are you that the

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Speaker 2: CGT is going to pay for the doctor's visits?

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Speaker 3: We're pretty confident on the numbers we've worked, We've had

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Speaker 3: them checked by others. We've done them based on the

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Speaker 3: Text Working Group, the Independent Tax Working Group that was

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Speaker 3: set up when we were asked in government, and so

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Speaker 3: that's the modeling that we've used in coming up with

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Speaker 3: the costings for this one.

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Speaker 2: Okay, this is for the CGT.

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Speaker 3: Yeah, that's correct.

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Speaker 2: Yeah, what about the doctor's visits, because it looks to

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Speaker 2: me like you might have got a bit short there.

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Speaker 2: I mean, if you've got four hundred and ninety million

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Speaker 2: set aside, how many doctor's visits is that a year

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Speaker 2: for us?

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Speaker 3: So we don't fund individual doctor's visits. Now, we do

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Speaker 3: subsidize doctor's visits, and we do that through a thing

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Speaker 3: called capitation funding, which means your doctor when you're enroll

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Speaker 3: in your doctor's practice. They get given bulk funding every

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Speaker 3: year for the number of people that they have enrolled.

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Speaker 3: We've agreed that we will increase that amount in exchange

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Speaker 3: for them not asking for a co payment for your

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Speaker 3: three free doctors visits each year.

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Speaker 2: Oh so, if I'm paying fifty bucks to go to

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Speaker 2: the doctor, you're not going to You're not going to

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Speaker 2: spring for the full fifty You're going to spring for

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Speaker 2: a smaller amount.

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Speaker 3: The deal basically is that in order to get their

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Speaker 3: increased funding, doctors will not be able to charge you

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Speaker 3: a copayment.

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Speaker 2: There which you go to.

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Speaker 3: You're going to have to bring doctors visits.

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Speaker 2: Aren't you going to have to give them the fifty

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Speaker 2: I'm giving them.

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Speaker 3: No, because the way the way the system works, the

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Speaker 3: way the capitation funding works. At the moment, they get

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Speaker 3: a set amount per patient but enrolled patient each year,

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Speaker 3: regardless of whether you visit the doctor or not, and

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Speaker 3: that will continue. But the amount that they get will

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Speaker 3: be increased. How much well there'll be that that will depend,

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Speaker 3: of course on a range of different factors. So it's

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Speaker 3: an increase to their existing funding, their existing fund.

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Speaker 2: You've got enough here, chippy. Have you got enough because

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Speaker 2: you sound like you're a bit shaky on it.

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Speaker 3: No, absolutely not. I mean I didn't do the costings myself.

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Speaker 3: We had those done separately, and they're based on what

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Speaker 3: people are paying now, based on what GP practice as

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Speaker 3: are collecting in co payments at the moment.

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Speaker 2: And then what happens in the first two years Because

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Speaker 2: you don't have enough money coming in for the first

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Speaker 2: two years of the free doctor's visits, you're just going

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Speaker 2: to put that on the credit card.

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Speaker 3: No, the way the Treasury always does, Treasury deals in

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Speaker 3: four year funding allocations. They've looked so we have looked

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Speaker 3: at the amount of revenue that the capital gains tax

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Speaker 3: will generate over four years, and then we've looked at

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Speaker 3: the cost of the GP visits over four years, and

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Speaker 3: that's less than the capital gains tax generates during that Okay, So.

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Speaker 2: The average over four years is lest Okay. Now, what

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Speaker 2: do we do for valuation day?

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Speaker 3: Right?

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Speaker 2: Because we start the clock on the first of July

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Speaker 2: in twenty twenty seven, do we have to get valuis

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Speaker 2: in to look at every single batch and every single

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Speaker 2: second property and every single commercial property.

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Speaker 3: So most commercial properties will have a valuation now because

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Speaker 3: they are commercial properties and so they'll have a valuation

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Speaker 3: already for residential properties. There are a range of options

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Speaker 3: that the Tax working Groups set out around how valuation

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Speaker 3: could work, but for most people it will probably be

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Speaker 3: that they'll get a commercial valuation.

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Speaker 2: On the day. Do we have enough valuers.

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Speaker 3: And there's a period of time in which you have

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Speaker 3: to get the valuation done by it'll be over, you know,

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Speaker 3: there will be a reasonable period of time to do that.

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Speaker 3: The only people who will need to get it done immediately,

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Speaker 3: you know, straight away with the people who are selling.

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Speaker 2: Have we got enough values? I'm going to want it

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Speaker 2: to be like as up to the last minute as possible, right, So,

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Speaker 2: have we got enough values to come in on the

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Speaker 2: first of July twenty twenty seven and value the whole country?

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Speaker 3: Yeah? The Text Working Group were confident that this would

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Speaker 3: not be a reason, that this is not something that

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Speaker 3: would be a prayer. The Text Working Group had a

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Speaker 3: whole chapter in their report around the hel I'm not

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Speaker 3: going to read it.

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Speaker 2: You've read it, it's your policy.

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Speaker 3: Tell me, well again, there are a range of different

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Speaker 3: options that people can use for their valuations, like what well,

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Speaker 3: one of them of course, is getting a commercial valuer

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Speaker 3: and to give you evaluation.

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Speaker 2: Which is what everybody's going to want to do. And

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Speaker 2: so if you can't, then what do you do?

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Speaker 3: Well, if you want to sell the property immediately, then

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Speaker 3: will be able to get a conventional valuation.

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Speaker 2: I don't want to sell the property immediately to be

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Speaker 2: I want the value because that's the starting of the

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Speaker 2: value clock. So what's the alternative.

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Speaker 3: Well, if you're not going to sell the property immediately,

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Speaker 3: then there presumably isn't a panic and you need to

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Speaker 3: get an evaluation immediately, is it?

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Speaker 2: Well, when when am I going to get the valuation?

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Speaker 3: Then well then that's something that you can figure out

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Speaker 3: with that.

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Speaker 2: Jimmy, you do understand why I'm trying to get a

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Speaker 2: valuation on the day, right, It's to reduce my eventual

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Speaker 2: tax bill. So everybody's going to want to have evaluation

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Speaker 2: on the day.

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Speaker 3: Yeah, and value as I'm sure will be able to

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Speaker 3: tell you what the valuation, even if it's some months afterwards,

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Speaker 3: I'm sure they'll be able to tell you what the

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Speaker 3: valuation would be on valuation day.

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Speaker 2: If I put a pool in and I spend one

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Speaker 2: hundred and fifty two hundred thousand dollars doing that, do

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Speaker 2: I get that off? My final tack is that added

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Speaker 2: to the cost that I paid for.

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Speaker 3: The house improvements. So renovations improvements can be deducted from

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Speaker 3: the you know, the capital gain that you have made. Okay?

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Speaker 2: Is their role over relief?

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Speaker 3: It depends on the circumstances. So if in the case

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Speaker 3: of an inheritance, for example, then there is no rollover

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Speaker 3: relief because any tax burden that would be otherwise payable

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Speaker 3: is extinguished on the person passing away, so there is

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Speaker 3: no rollover relief there. In the case of say a

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Speaker 3: couple separating, where you have the property jointly between the

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Speaker 3: two of you and one couple at one half of

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Speaker 3: the couple ends up taking on the property and continuing

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Speaker 3: with it, then yes, there is a rollover relief in those.

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Speaker 2: And in the cases of a purchasing of a commercial building,

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Speaker 2: you're selling your old when you're buying a new one,

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Speaker 2: is there rollover relief?

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Speaker 3: That's something. Yes, there is an ability basically to recycle

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Speaker 3: your capital.

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Speaker 2: Okay, is it inflation adjusted?

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Speaker 3: What do you mean? Is it inflation adjusted?

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Speaker 2: Well, if you buy a house, Let's say you buy

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Speaker 2: a house today, right, and it's two million dollars two

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Speaker 2: million if it's not inflation adjusted. For let me give

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Speaker 2: you a really here's an example that was seen to

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Speaker 2: move I think is the best example. So let's say

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Speaker 2: you buy an asset in two thousand for ten million dollars, right,

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Speaker 2: and then you sell it today for twenty million dollars.

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Speaker 2: On paper, you've made ten million dollars. So you should

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Speaker 2: be taxed on the ten million dollars.

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Speaker 3: Yes, I see what you're saying, But the ten.

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Speaker 2: Million dollars in two thousand is now actually eighteen and

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Speaker 2: a half million dollars twenty years later, so you'd only

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Speaker 2: be taxed on the one and a half million dollars

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Speaker 2: between the eighteen and a half to the twenty that

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Speaker 2: you sold it at.

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Speaker 3: Yeah, no, it is not inflation.

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Speaker 2: Should it be inflation adjusted?

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Speaker 3: That is not in our policy? Why not? Well, basically

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Speaker 3: because we keept it as simple as possible. It's a

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Speaker 3: very simply designed TEX system. I think everybody can understand

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Speaker 3: the system that we've come up here.

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Speaker 2: But I mean, can you see how unfair that is

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Speaker 2: should be? Because let's say that today a house in

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Speaker 2: Auckland is two million dollars, but you know, let's say,

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Speaker 2: for the purposes of this, you go back fifty years

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Speaker 2: and you paid two hundred thousand dollars on it, You're

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Speaker 2: going to get a whopping big tax bill because it's

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Speaker 2: not inflation adjusted.

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Speaker 3: Remember, we've kept it very simple, Heather, I'm not. It

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Speaker 3: only applies to future capital gains, so it doesn't apply retrospectively,

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Speaker 3: only on the gains that you're making the from the

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Speaker 3: first of July twenty twenty seven. So give any capital

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Speaker 3: countries collect experience.

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Speaker 2: But given the country's collective experience with inflation eating away

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Speaker 2: your wealth, do you not think this should be inflation adjusted.

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Speaker 3: I think we're keeping it very simple so that everybody

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Speaker 3: understands how it's going to work. Is a valuable to people.

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Speaker 2: Hey, go on, then tell me, do you really think

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Speaker 2: that most people want a capital gains tax?

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Speaker 3: I think New Zealanders understand that we can't keep going

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Speaker 3: the way we go, and we can't keep plowing all

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Speaker 3: of our savings into residential rental properties and not invest

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Speaker 3: in productive businesses and.

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Speaker 2: Generations, so much harder than election by their own home,

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Speaker 2: haven't you.

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Speaker 3: No, I don't agree here that I think that New

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Speaker 3: Zealanders want to see us keeping our talent here in

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Speaker 3: New Zealand and not forcing young New Zealanders overseas.

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Speaker 2: All right, Hey, thanks very much for your time. Chris

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Speaker 2: Hopkins Labor Party Leadership.

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