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Speaker 1: In a way, I guess you've got to admire. And

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Speaker 1: Chris Hipkins has begun won the long road back to

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Speaker 1: power by two. Talking about taxing is more trouble, as

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Speaker 1: he sees it, because more of us are getting old.

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Speaker 1: You can't say to people over the age of sixty

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Speaker 1: five that they can have everything that we gave to

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Speaker 1: people when there were fourteen percent of them, When there's

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Speaker 1: twenty one percent and not increased government spending.

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Speaker 2: The numbers just simply won't add up.

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Speaker 1: So the Labor Party trying to work out what sort

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Speaker 1: of tax policy they take to the campaign of twenty six,

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Speaker 1: Denton's Kensington Swan partner and tax expert Bruce Binaki is, well,

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Speaker 1: there's Bruce, very good morning to you.

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Speaker 2: Good morning.

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Speaker 1: Is there a case can you make a cogent, cohesive

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Speaker 1: case to take more money from me?

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Speaker 2: Oh? Look, I think there is a case there that

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Speaker 2: Hipkins has raised that in ten years time, we're going

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Speaker 2: to have three workers for every retired person compared to

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Speaker 2: four today, and in forty years time we'll have only

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Speaker 2: two working age people for every one retired person. So

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Speaker 2: there is a case for looking at our tax system

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Speaker 2: and trying to raise more revenue to pay for that,

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Speaker 2: because in our current settings it is unaffordable. But I

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Speaker 2: think what Hipkins has disingenuously not talked about is the

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Speaker 2: fundamentals of the underlying system. The fact, you know, we've

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Speaker 2: got a relatively low entitlement age now by world standards

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Speaker 2: at sixty five, and the fact it's not means tested.

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Speaker 2: So he's wanting to tax us more without looking at

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Speaker 2: the overall design of the system.

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Speaker 1: Right, So there are plenty of ways to skinnicata, is

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Speaker 1: what you're suggesting.

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Speaker 2: Yeah, Look, I think when you think about this, there's

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Speaker 2: probably six levres a government can poll, right, so you know,

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Speaker 2: it can tax us more. You can borrow more, which

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Speaker 2: is what Hipkins has faulted to. You can raise the

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Speaker 2: entitlement aids, which both labor you know, labor has been

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Speaker 2: in favor of in the past, and that's actually did

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Speaker 2: in twenty seventeen legislated that and then it got unwhelmed.

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Speaker 2: You can you know, means test, You could reintroduce the

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Speaker 2: third tax that we had back in the eighties. You

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Speaker 2: can raise the immigration levels bring in a lot more

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Speaker 2: working age people to support the tax base, or you

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Speaker 2: can you know hard but you can try and you know,

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Speaker 2: governments can try and do something to increase birth rates.

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Speaker 2: So it's not just a tax and borrow discussion. It's like,

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Speaker 2: let's have a look at the overall design of the

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Speaker 2: system and how we're going to afford it. Yeah.

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Speaker 1: See, I'd been favored of growing stuff and making more

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Speaker 1: and just keeping tax the way it is because and

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Speaker 1: we don't seem to talk about that enough. But that's

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Speaker 1: as doable as grabbing money off of the small the

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Speaker 1: smaller piece of pie, so to speak, isn't it.

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Speaker 2: Yeah, absolutely it is. And you know the projections going

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Speaker 2: forward that over the next ten years, the cost of

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Speaker 2: superannuation is a percentage of the tax take will go

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Speaker 2: from seventeen percent to twenty one percent. And that's what

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Speaker 2: the cost of super doubling over that period. But assuming

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Speaker 2: an increase in the size of the tax take, Now,

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Speaker 2: if you can actually make this country a more business

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Speaker 2: friendly place to do business, get more activity, grow the

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Speaker 2: tax base, and that will also, as you say, become

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Speaker 2: more affordable.

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Speaker 1: So the politics of it all then comes into it,

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Speaker 1: doesn't it. I mean the idea that I mean, it's

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Speaker 1: the selling of the idea, not the mathematical mechanics of it,

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Speaker 1: isn't it really? I mean, that's the crux of it.

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Speaker 2: And as I said, I think our politicians have done

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Speaker 2: us a disservice in this regard. I mean everyone now

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Speaker 2: seems too too scared to face into this issue, to

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Speaker 2: start talking about raising the entitlement age again, to look

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Speaker 2: at means testing, and to have an honest discussion maybe

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Speaker 2: about things like capital gains tax. You know, we've had

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Speaker 2: a full review of the tax system we did back

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Speaker 2: in twenty nineteen where the Tax Working Group recommended a

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Speaker 2: capital gains tax. We've got offshore organizations IMFOECD saying we're

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Speaker 2: an outlier and not having a capital gains tax. I

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Speaker 2: think we need to have an honest discussion as a

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Speaker 2: country about how we're going to afford this and making

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Speaker 2: sure people have dignity and retirement while not strangling the

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Speaker 2: life out of the economy.

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Speaker 1: Isn't there a sort of some cute dos to be

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Speaker 1: gained by being an outlier just because somebody's got a

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Speaker 1: whole bunch of taxes. Why do you automatically want to

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Speaker 1: join that club?

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Speaker 2: Well, because I think it shows it's effective, and personally

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Speaker 2: I would be far more in favor of us having

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Speaker 2: a capital gains tax, which has proven worldwide that it works,

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Speaker 2: as opposed to going down the rabbit holes of wealth

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Speaker 2: hat taxes and inheritance taxes and messing with the GST

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Speaker 2: system and all these other weird and wonderful ideas that

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Speaker 2: cropped up at the last election, and you know, continue

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Speaker 2: to pop up. I think a capital gains tax works

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Speaker 2: and are shown to be works, and it'd be far more,

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Speaker 2: far less disruptive and potentially economically damaging than a wealth tax.

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Speaker 1: This could be one of those things that you know,

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Speaker 1: when they talk about infrastructure and getting cross party support.

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Speaker 1: This is a cross party support type discussion. So you

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Speaker 1: send it off to a bunch of experts to have

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Speaker 1: a look at it. They make a recommendation two main

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Speaker 1: parties go actually in the you know, for the benefit

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Speaker 1: of this country overall. This is the bit we agree on,

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Speaker 1: because that's the only way you're going to get across

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Speaker 1: the line, isn't it.

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Speaker 2: I think so. And as I said, this has been

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Speaker 2: a political football for too long. I have vague recollections

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Speaker 2: of the superinnuation of the card back in the early

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Speaker 2: nineties and Bolder and war and getting together and it's like, well,

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Speaker 2: it's obviously all fallen apart. We need something like that.

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Speaker 2: We need some settings that are there for the long

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Speaker 2: term and are taken out of politics. And you know,

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Speaker 2: people can disagree about the specifics of the tax system

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Speaker 2: and how we pay for it, but terms of things

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Speaker 2: like means testing, entitlement ages and basic design settings, we

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Speaker 2: need bipartisan support on that good stuff.

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Speaker 1: Bruce, appreciate your expertise, Bruce Bernaki, who's Denton's Kensington Swan

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Speaker 1: partner and tax expert.

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