Speaker 1: You're listening to a share these podcast.
Speaker 2: Capital gains tax. For me, I've always felt like it's
Speaker 2: more of a when, not an if. But again it's
Speaker 2: topical and both political parties, business lea, they're speaking about it.
Speaker 2: What's your view on capital gains tax?
Speaker 1: Yeah, I expect it will be introduced at some stage
Speaker 1: in New Zealand. It's a question of what will be
Speaker 1: the context of the debate, and if the debate for
Speaker 1: introducing it is revolving around envy and not wanting people
Speaker 1: to make a capital gain from property and a belief that, oh,
Speaker 1: if people don't invest in property, they're going to invest
Speaker 1: in other productive activities. I don't know if it gets
Speaker 1: across the line from my point of view. To get
Speaker 1: it across the line, it has to be in the
Speaker 1: context of the country needs to generate more tax revenue
Speaker 1: in the future because of the aging population, the increased
Speaker 1: demands on the health system, for instance, just to modernize
Speaker 1: what's already sitting out there, we do need to raise
Speaker 1: raw more revenue. New Zealand has already highly depended upon
Speaker 1: income tax and GST rate is already fifteen percent. Put
Speaker 1: it in that context and I can see myself probably
Speaker 1: voting in favor of it coming in. But as long
Speaker 1: as it is couched in terms of some people have
Speaker 1: made money and we don't think they should have made
Speaker 1: that much money, I would struggle then, I think too
Speaker 1: to go and support it. It has to be part of
Speaker 1: a broader fiscal debate. But it's going to come, but
Speaker 1: I think it's impossible to predict what parliamentary term it's
Speaker 1: going to appear.
Speaker 2: I'll be if someone can nail that story of you know,
Speaker 2: it'll help me more growth over time and stuff. I
Speaker 2: think that would be amazing as well. So for our listeners,
Speaker 2: what should they as investors be thinking or bearing in
Speaker 2: mind over the next six to twelve months.
Speaker 1: Yeah, expect a lot of uncertainty out there. We're at
Speaker 1: a turning point in a number of cycles. And my
Speaker 1: experience of having been in this business back in New
Speaker 1: Zealand since nineteen eighty seven is that we're volatilely kind
Speaker 1: of me. We get hit by shops all the time,
Speaker 1: domestic ones and offshore, and when cycles turn, sometimes they
Speaker 1: don't keep going in the direction that you expect. This
Speaker 1: happened a year ago the housing market was picking up
Speaker 1: quite strongly. Prices on average in New Zealand increased zero
Speaker 1: point nine percent a month for a five month period
Speaker 1: July through to November, and then they started falling away.
Speaker 1: It was a false start. I don't think it's a
Speaker 1: false start this time around in terms of the residential
Speaker 1: property market picking up. But there are a number of
Speaker 1: things out there that are going to occupy people's minds
Speaker 1: and so obviously keep an eye on what's happening in
Speaker 1: the Middle East and the potential for greater discord over
Speaker 1: there that may cause an impact in the oil market.
Speaker 1: It hasn't so far, but that is always a risk
Speaker 1: that's sitting out there. We've got the American presidential election
Speaker 1: in about a month's time coming along, and if mister
Speaker 1: Trump gets back in, then we're looking at higher tariffs
Speaker 1: for the thirteen percent of New Zealand exports that go
Speaker 1: to the United States, and then other countries may be
Speaker 1: looking at putting tariffs in place as well. So that's
Speaker 1: a risk for New Zealand because we're vulnerable to these
Speaker 1: things that we need access overseas. Keep an eye on
Speaker 1: the Chinese economy. At its peak three years ago, thirty
Speaker 1: three percent of our export receipts came from China, including
Speaker 1: Hong Kong. Now we're down to twenty seven point three
Speaker 1: percent and falling away. China's economic outlook is not particularly good,
Speaker 1: and that means still low demand for forestry products and
Speaker 1: it's going to be suppressing prices for the likes of
Speaker 1: red meat, and i'd suggest also a bit on the
Speaker 1: dairy product side as well, So keep an eye on
Speaker 1: that one. And outside of that, it's simply the usual things.
Speaker 1: At some stage we're going to give another decent earthquake,
Speaker 1: a big earthquake. Unfortunately in New Zealand, I don't tend
Speaker 1: to buy into there's another pandemic just around the corner,
Speaker 1: one in every seventy years in terms of you know,
Speaker 1: COVID et cetera. Maybe that's so that is more my
Speaker 1: underlying assumption with that regard. But people need to remember
Speaker 1: diversification in your portfolio and watch for over extrapolation of
Speaker 1: cycles once they start, because I can assure you from
Speaker 1: three and a half or so decades in this business
Speaker 1: there isn't a tendency to over extrapolate the up and
Speaker 1: the down. Things move in cycles, and watch out you
Speaker 1: don't get overly optimistic or pessimistic. The other way around.
Speaker 1: Investing involves the risk you might lose the money you
Speaker 1: start with. We recommend talking to a licensed financial advisor.
Speaker 1: We also recommend reading product disclosure documents before deciding to invest.
Speaker 1: Everything you're about to see and hear is current at
Speaker 1: the time of recording.