1 00:00:01,040 --> 00:00:03,680 Speaker 1: You're listening to a share these podcast. 2 00:00:04,120 --> 00:00:06,800 Speaker 2: Capital gains tax. For me, I've always felt like it's 3 00:00:06,800 --> 00:00:08,840 Speaker 2: more of a when, not an if. But again it's 4 00:00:08,880 --> 00:00:13,040 Speaker 2: topical and both political parties, business lea, they're speaking about it. 5 00:00:13,080 --> 00:00:15,640 Speaker 2: What's your view on capital gains tax? 6 00:00:16,680 --> 00:00:20,239 Speaker 1: Yeah, I expect it will be introduced at some stage 7 00:00:20,320 --> 00:00:22,799 Speaker 1: in New Zealand. It's a question of what will be 8 00:00:22,840 --> 00:00:26,079 Speaker 1: the context of the debate, and if the debate for 9 00:00:26,160 --> 00:00:32,720 Speaker 1: introducing it is revolving around envy and not wanting people 10 00:00:32,800 --> 00:00:37,240 Speaker 1: to make a capital gain from property and a belief that, oh, 11 00:00:37,320 --> 00:00:39,520 Speaker 1: if people don't invest in property, they're going to invest 12 00:00:39,560 --> 00:00:42,720 Speaker 1: in other productive activities. I don't know if it gets 13 00:00:42,720 --> 00:00:45,120 Speaker 1: across the line from my point of view. To get 14 00:00:45,159 --> 00:00:46,960 Speaker 1: it across the line, it has to be in the 15 00:00:46,960 --> 00:00:50,320 Speaker 1: context of the country needs to generate more tax revenue 16 00:00:50,320 --> 00:00:53,199 Speaker 1: in the future because of the aging population, the increased 17 00:00:53,200 --> 00:00:56,920 Speaker 1: demands on the health system, for instance, just to modernize 18 00:00:56,920 --> 00:00:59,480 Speaker 1: what's already sitting out there, we do need to raise 19 00:00:59,600 --> 00:01:03,120 Speaker 1: raw more revenue. New Zealand has already highly depended upon 20 00:01:03,480 --> 00:01:07,200 Speaker 1: income tax and GST rate is already fifteen percent. Put 21 00:01:07,200 --> 00:01:11,040 Speaker 1: it in that context and I can see myself probably 22 00:01:11,080 --> 00:01:13,440 Speaker 1: voting in favor of it coming in. But as long 23 00:01:13,480 --> 00:01:15,880 Speaker 1: as it is couched in terms of some people have 24 00:01:16,000 --> 00:01:17,920 Speaker 1: made money and we don't think they should have made 25 00:01:17,920 --> 00:01:20,560 Speaker 1: that much money, I would struggle then, I think too 26 00:01:21,560 --> 00:01:23,880 Speaker 1: to go and support it. It has to be part of 27 00:01:23,959 --> 00:01:26,400 Speaker 1: a broader fiscal debate. But it's going to come, but 28 00:01:26,520 --> 00:01:29,399 Speaker 1: I think it's impossible to predict what parliamentary term it's 29 00:01:29,440 --> 00:01:30,039 Speaker 1: going to appear. 30 00:01:30,720 --> 00:01:33,959 Speaker 2: I'll be if someone can nail that story of you know, 31 00:01:34,000 --> 00:01:37,160 Speaker 2: it'll help me more growth over time and stuff. I 32 00:01:37,160 --> 00:01:41,520 Speaker 2: think that would be amazing as well. So for our listeners, 33 00:01:41,560 --> 00:01:44,440 Speaker 2: what should they as investors be thinking or bearing in 34 00:01:44,480 --> 00:01:46,440 Speaker 2: mind over the next six to twelve months. 35 00:01:46,959 --> 00:01:50,600 Speaker 1: Yeah, expect a lot of uncertainty out there. We're at 36 00:01:50,640 --> 00:01:54,320 Speaker 1: a turning point in a number of cycles. And my 37 00:01:54,440 --> 00:01:56,760 Speaker 1: experience of having been in this business back in New 38 00:01:56,840 --> 00:01:59,880 Speaker 1: Zealand since nineteen eighty seven is that we're volatilely kind 39 00:01:59,880 --> 00:02:01,760 Speaker 1: of me. We get hit by shops all the time, 40 00:02:01,800 --> 00:02:06,280 Speaker 1: domestic ones and offshore, and when cycles turn, sometimes they 41 00:02:06,360 --> 00:02:08,520 Speaker 1: don't keep going in the direction that you expect. This 42 00:02:08,600 --> 00:02:11,520 Speaker 1: happened a year ago the housing market was picking up 43 00:02:11,600 --> 00:02:15,440 Speaker 1: quite strongly. Prices on average in New Zealand increased zero 44 00:02:15,520 --> 00:02:18,240 Speaker 1: point nine percent a month for a five month period 45 00:02:18,320 --> 00:02:20,960 Speaker 1: July through to November, and then they started falling away. 46 00:02:21,120 --> 00:02:23,280 Speaker 1: It was a false start. I don't think it's a 47 00:02:23,320 --> 00:02:25,680 Speaker 1: false start this time around in terms of the residential 48 00:02:25,720 --> 00:02:28,680 Speaker 1: property market picking up. But there are a number of 49 00:02:28,680 --> 00:02:31,120 Speaker 1: things out there that are going to occupy people's minds 50 00:02:31,120 --> 00:02:33,359 Speaker 1: and so obviously keep an eye on what's happening in 51 00:02:33,400 --> 00:02:37,200 Speaker 1: the Middle East and the potential for greater discord over 52 00:02:37,240 --> 00:02:39,480 Speaker 1: there that may cause an impact in the oil market. 53 00:02:39,560 --> 00:02:41,639 Speaker 1: It hasn't so far, but that is always a risk 54 00:02:41,680 --> 00:02:45,880 Speaker 1: that's sitting out there. We've got the American presidential election 55 00:02:46,000 --> 00:02:49,080 Speaker 1: in about a month's time coming along, and if mister 56 00:02:49,080 --> 00:02:52,120 Speaker 1: Trump gets back in, then we're looking at higher tariffs 57 00:02:52,160 --> 00:02:54,560 Speaker 1: for the thirteen percent of New Zealand exports that go 58 00:02:54,639 --> 00:02:57,320 Speaker 1: to the United States, and then other countries may be 59 00:02:57,400 --> 00:03:00,240 Speaker 1: looking at putting tariffs in place as well. So that's 60 00:03:00,480 --> 00:03:04,240 Speaker 1: a risk for New Zealand because we're vulnerable to these 61 00:03:04,280 --> 00:03:06,800 Speaker 1: things that we need access overseas. Keep an eye on 62 00:03:06,840 --> 00:03:10,880 Speaker 1: the Chinese economy. At its peak three years ago, thirty 63 00:03:11,000 --> 00:03:14,120 Speaker 1: three percent of our export receipts came from China, including 64 00:03:14,160 --> 00:03:16,720 Speaker 1: Hong Kong. Now we're down to twenty seven point three 65 00:03:16,760 --> 00:03:21,520 Speaker 1: percent and falling away. China's economic outlook is not particularly good, 66 00:03:21,760 --> 00:03:24,680 Speaker 1: and that means still low demand for forestry products and 67 00:03:24,720 --> 00:03:27,200 Speaker 1: it's going to be suppressing prices for the likes of 68 00:03:27,280 --> 00:03:29,079 Speaker 1: red meat, and i'd suggest also a bit on the 69 00:03:29,120 --> 00:03:32,359 Speaker 1: dairy product side as well, So keep an eye on 70 00:03:33,160 --> 00:03:36,480 Speaker 1: that one. And outside of that, it's simply the usual things. 71 00:03:36,800 --> 00:03:39,360 Speaker 1: At some stage we're going to give another decent earthquake, 72 00:03:39,560 --> 00:03:42,640 Speaker 1: a big earthquake. Unfortunately in New Zealand, I don't tend 73 00:03:42,680 --> 00:03:46,000 Speaker 1: to buy into there's another pandemic just around the corner, 74 00:03:46,640 --> 00:03:48,880 Speaker 1: one in every seventy years in terms of you know, 75 00:03:50,040 --> 00:03:52,680 Speaker 1: COVID et cetera. Maybe that's so that is more my 76 00:03:52,840 --> 00:03:56,320 Speaker 1: underlying assumption with that regard. But people need to remember 77 00:03:56,440 --> 00:04:01,760 Speaker 1: diversification in your portfolio and watch for over extrapolation of 78 00:04:02,280 --> 00:04:05,360 Speaker 1: cycles once they start, because I can assure you from 79 00:04:05,680 --> 00:04:07,760 Speaker 1: three and a half or so decades in this business 80 00:04:08,040 --> 00:04:12,200 Speaker 1: there isn't a tendency to over extrapolate the up and 81 00:04:12,440 --> 00:04:16,040 Speaker 1: the down. Things move in cycles, and watch out you 82 00:04:16,040 --> 00:04:18,919 Speaker 1: don't get overly optimistic or pessimistic. The other way around. 83 00:04:19,120 --> 00:04:21,719 Speaker 1: Investing involves the risk you might lose the money you 84 00:04:21,760 --> 00:04:25,040 Speaker 1: start with. We recommend talking to a licensed financial advisor. 85 00:04:25,760 --> 00:04:29,599 Speaker 1: We also recommend reading product disclosure documents before deciding to invest. 86 00:04:29,839 --> 00:04:32,240 Speaker 1: Everything you're about to see and hear is current at 87 00:04:32,240 --> 00:04:33,120 Speaker 1: the time of recording.