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Speaker 1: Ever, due to see.

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Speaker 2: Alan Chris Hipkins is pushing back at the government and

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Speaker 2: his own potential coalition partners on the issue of the

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Speaker 2: capital gains tax. Government hates it, Greens want Labor to

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Speaker 2: go much further.

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Speaker 1: This is the policy that we are campaigning on and

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Speaker 1: this is the policy that we will implement if we

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Speaker 1: form government after the next election. Because I'm not a

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Speaker 1: complete pushover like Christopher Luxen, I don't think the smaller

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Speaker 1: parties should call all of the shots. I have been

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Speaker 1: very very clear under a Labor government, I will be

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Speaker 1: the Prime Minister. Barbara Edmonds will be the Minister of Finance.

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Speaker 1: That is not up for negotiation.

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Speaker 2: Genetive Trainey is The Herald's Wellington Business editor with us Hallo,

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Speaker 2: Jenay Hi, Heather. Okay, so you have an interesting take

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Speaker 2: on this, which is you don't have a problem with

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Speaker 2: the CGT part. You have a problem with the three

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Speaker 2: free doctors visits part.

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Speaker 3: Why, Yeah, exactly. I think if you read some of

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Speaker 3: the work that Treasury has been putting out there, it's

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Speaker 3: really worried about the costs associated with our aging population.

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Speaker 3: You know, these costs are meant to soar and the

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Speaker 3: tax take is not meant to increase, you know, at

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Speaker 3: the same rate is the expenses. So Treasury illustrates this

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Speaker 3: in a recent report it did. It said that if

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Speaker 3: for the government solely relied on tax to meet the

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Speaker 3: cost pressures that are ahead, the average tax rate on

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Speaker 3: labor income would need to rise from twenty one percent

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Speaker 3: to thirty two percent of GDP. Or if you solely

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Speaker 3: rely on increasing GST to meet the costs, that would

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Speaker 3: need to go up from fifteen to thirty two percent.

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Speaker 3: So the reality is we don't have enough money to

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Speaker 3: meet the costs. So then you think, well, how do

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Speaker 3: you you know, how do you meet these costs? Either

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Speaker 3: you cut services a lot, you increase the age of

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Speaker 3: super or you increase the tax base. So you just

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Speaker 3: instead of taxing people who go to work more, you

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Speaker 3: just diversify who you tax. And a capital gains tax

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Speaker 3: is a widely recognized way of doing that. You know,

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Speaker 3: people do, It's done all around the world. A bunch

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Speaker 3: of business leaders think it's a good idea, IMF so on.

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Speaker 3: So of all the different options, none of them are great,

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Speaker 3: but that one doesn't seem like a bad one.

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Speaker 2: Yeah, So basically the idea is you need more you

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Speaker 2: need more revenue, you don't need to go blowing it

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Speaker 2: on something that people can afford to pay for them.

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Speaker 2: Many people can afford it, and this is arguably the

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Speaker 2: same problem with the Future Fund, isn't it. They bring

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Speaker 2: the money in or they get the money and then

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Speaker 2: just squander it on something we don't need.

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Speaker 3: Well, that's the thing, And you know, I think for

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Speaker 3: a lot of people, they are smart enough they can

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Speaker 3: see the future that we're looking at. And I mean

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Speaker 3: it's not great, but something needs to be done. But

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Speaker 3: the thing that is galling is when labor proposes to

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Speaker 3: spend money in an untargeted way. So, of course I'd

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Speaker 3: like to go to the GP three times a year

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Speaker 3: for free. But I can afford to go to the GP, thankfully,

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Speaker 3: and I do go. So actually to spend money on

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Speaker 3: me going to the GP is a waste of money.

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Speaker 3: I'd rather that be spent on other people who can't

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Speaker 3: afford it. What about not getting top of the finances.

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Speaker 2: What about if you see this from a different perspective,

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Speaker 2: which is this is not actually the thing that's supposed

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Speaker 2: to bring the revenue, and this is the trojan horse, right,

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Speaker 2: it starts them off. They sell it to the public

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Speaker 2: with hey, this is what you get for us introducing

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Speaker 2: a CGT. So it's a nice little bait and switch,

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Speaker 2: and then after that you can start making it more comprehensive.

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Speaker 2: Comprehensive and that is how you pay for everything.

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Speaker 3: Yeah, now, like I mean, that's a good point. What

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Speaker 3: they've proposed here by keeping it just on property, cudent

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Speaker 3: types of property, is that the revenue generation is not

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Speaker 3: going to be huge. It's not going to save New

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Speaker 3: Zealand from this doom and gloom that Treasury talks about.

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Speaker 3: But I don't think we can assume that label would

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Speaker 3: go further with the taxing. You know at the end

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Speaker 3: of the day that there would be an uproar and

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Speaker 3: you can't entirely pull the rug out from beneath people

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Speaker 3: who invest in property. There's nothing wrong with doing that.

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Speaker 3: We need landlords and I would hope that it wouldn't

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Speaker 3: overkill things. And for example, the way it could do

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Speaker 3: that is if it again stopped allowing investors, prevented them

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Speaker 3: from deducting interest as an expenseful tax previously.

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Speaker 2: Do you know what they're doing there.

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Speaker 3: Well, they haven't said, so we asked and and they

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Speaker 3: sort of kept it open. So, you know, it's pretty

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Speaker 3: crucial for investors that they can deduct their interest as

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Speaker 3: an expense. It's a very large expense. It helps with

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Speaker 3: cash flow.

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Speaker 1: You know.

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Speaker 3: It's one thing introducing a capital gains tax. I think

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Speaker 3: that's fine, but removing the ability to deduct interest as

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Speaker 3: an expense would be a step too far. And I

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Speaker 3: don't know why they didn't just stamp that out when

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Speaker 3: they announced the policy. Yeah.

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Speaker 2: Interesting. Hey, thanks very much, Jane. As always, Jane tub Cherani,

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Speaker 2: the Herald's Wellington business editor. Here the labor have a

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Speaker 2: poverty mindset.

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Speaker 1: For more from Heather Duplessy Allen Drive, listen live to

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Speaker 1: news talks that'd be from four pm weekdays, or follow

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