Business Scoop

Social media spanks Bill English on gains tax

Article – BusinessDesk

by Pattrick Smellie July 8 (BusinessDesk) – Finance Minister and Facebook page-owner Bill English didn’t get the presumably intended answer when he asked visitors to the page whether they supported the Labour Party’s proposal for a capital gains …

Social media spanks Bill English on gains tax

by Pattrick Smellie

July 8 (BusinessDesk) – Finance Minister and Facebook page-owner Bill English didn’t get the presumably intended answer when he asked visitors to the page whether they supported the Labour Party’s proposal for a capital gains tax.

When BusinessDesk last looked, at 4.15 p.m., 314 people had voted 88% in favour of a capital gains tax.

Only 40, or 13%, of those had voted against it.This may indicate unexpected support among economic rationalist National Party supporters for the proposal to slap a 15% tax on all appreciating capital assets other than the family home.

More likely, the poll is going viral in Labour and Green Party social media networks.English posed the question on his site: Do you support a capital gains tax?

The issue has arisen because it is a central plank of the Opposition Labour Party’s election manifesto, leaked to the media though not officially to be announced until next Thursday, by Labour leader Phil Goff.

The Green Party has consistently advocated a capital gains tax, but such a change by Labour represents a monumental political shift. A prevailing nostrum in New Zealand politics says proposing a capital gains tax is political suicide.

That was before the housing bubble.Supporters of the tax have also made their thoughts known on English’s Facebook page. One of them, Leonard Bloksberg, said New Zealand “desperately need a tax change to drive investment toward the productive sector and out of real estate.”

“If you don’t like Goff’s plan, please write your own version but our economy desperately needs a tax on property speculation,” Bloksberg says.The National government has poured scorn on Goff’s tax plan, with Transport Minister Steven Joyce calling it economic vandalism.

English told Parliament the idea would be a complex tax that “struggles to raise revenue at all”, especially as the market for residential property investment was demonstrably dead as a result of the last three years’ national deleveraging.

(BusinessDesk) 16:25:51

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  1. RW, 8. July 2011, 17:44

    “More likely, the poll is going viral in Labour and Green Party social media networks.” – seems likely. Number 1 rule of politics… don’t run polls on your website unless you want to be embarrassed!

  2. paul, 8. July 2011, 20:18

    as for joyce’s comment of economic vandalism, selling energy generating companies at a time of rapidly rising energy costs is one of the stupidest most short sighted ideas since telecom was flicked at the dawn of the internet.

  3. Carl, 9. July 2011, 9:16

    Tax on property speculation, for the smaller players who haven’t resructured, tax on financial speculation was a better election platform.
    A complex robust tax with a fruity loophole.
    I think CGT in Oz dropped property prices by 17%.

  4. donna, 9. July 2011, 9:57

    I presume the Stephen Joyce who has described Labour’s plans as “economic vandalism” is the same Stephen Joyce championing the so-called roads of national significance? The roads that will suck up $!0 billion in road taxes along with supplements from the consolidated fund over the next few years? The roads that will, like Think Big before them, stand as a stark reminder of central government’s talent for economic and environmental vandalism?
    Thought so.
    Suppose a CGT results in house prices dropping 17% in NZ: isn’t that a good thing? Isn’t that the aim? Just because property investors exit the market doesn’t mean the houses disappear.

  5. Leon Henderson, 10. July 2011, 11:26

    An enormous amount of (rental) real-estate is owned by foreign “absentee” landlords, who overwhelmingly Are Americans of the filthy-rich Ruling Class of the USA. The Greens spent years trying to make the Labour Party (when Labour was in government) cough up the foreign-ownership figures for land / real-estate in NZ but the infuriated Michael Cullen kept stonewalling them with this devious reply: “The New Zealand government does not keep records of foreign property ownership”. The words “does not keep” are the ones to note! A real-estate agent in Gisborne a few years ago said that he knew personally of an American multibillionairre who owned nearly eight-hundred rental properties in this country, and two other American multibillionairres who owned nearly five-hundred each. None of them had even bothered to obtain NZ citizenship (very few of these foreign economic tapeworms do bother). How much money is being sucked out of this country by these wealthy leeches is not known (to the Greens and us) but it is certainly a massive amount,and hence the adamant refusal by the Labour and National parties to release the information. Landlordism is a curse on society (they should be outlawed, along with the Userers) and at the absolute least, before they are hopefully ultimately eradicated, they should be very heavily taxed (a large-scale State-Housing construction programme should be commenced in conjunction with the imposition of a hefty Capital Gains Tax, on everything except the family home. This is Green Policy. But as well as this, landlords and all capitalists should have a powerful price-control system regulated onto them: they have been getting away with absolute murder and it is way past time these greedy, opportunistic, bandits and extortionists were violently stopped in their thieving tracks: look at the price in this country of bread, meat, and milk, in a place that exports NINETY-SEVEN-PERCENT of the food that is produced here by the big farm-owning capitalists; and hasten to add it is their miserably paid workers who all tend to be on, and stay on, the Minimum wage, who do all the actual work and all the producing) and if they will not obey the new laws then the New Zealand capitalists can be stripped of their New Zealand Citizenship, put on a filthy rustbucket South-Korean boat, and which vessel would be ordered to remove them from New Zealand Territorial waters, and told to take them to the United States because New Zealand capitalists grovel in starry-eyed adoration and worship of that place. Which is bankrupt. Because of free-market-capitalism, which has always made it a sitting-duck for the evil Gang who rule The London Business District and Wall Street, as was gorily proven in 2008 where the USA, Pommyland, European Union, and many other places were economically slaughtered by them. All New Zealand Working-Class people should pay very, very close attention to what has been happening in Greece! If the National Party get back in, in November, that is what New Zealand is going to end up like! After more than twenty-seven years of rabid free-market-capitalist “Reforms” it is nearly there now!!!

  6. Pete Fowler, 10. July 2011, 14:38

    Even the US has a capital gains tax. Here, the harder you work for your money the more tax you pay on it.

  7. Leon Henderson, 10. July 2011, 15:01

    The poll, and the poll results appear to have abruptly vanished from Mr. English’s appalling website: for God’s sake, how much is the New Zealand taxpayer forking out for Crosby Textor to include amongst his interminable Treasury/Business Roundtable-written diatribes an interminable succession of photographs of Mr. English as well?

  8. Robert Miles, 10. July 2011, 20:36

    Economist opinion is often no wiser than that of sociologists and specialists. A Capital Gains tax of 15% on rental property, housing sales and shareholdings would be a disaster. I wait with interest to see if Brash will support it. If he does, Act will lose Epsom. Professional and business salaries are low enough in NZ without a massive cut to the income of doctors. lawyers, architects, computer professionals and engineers. There is little potential for manufacturing in NZ. The area of potential expansion is in tourism and service industry. The barrier is restrictive licensing and zoning laws. It is the social planners who hold aotearoa back.
    Bill English is such a socialist anyway that he probably thinking of joining Goff. Its a clever, appallingly cynical move by Labour- which may prove very divisive for the right.

  9. Robert M, 11. July 2011, 19:45

    Surely professional salaries of Doctors, architects, headmasters, lawyers, computer programmers,etc are already too low in NZ, without a furthur Capital Gains tax on wealth. There is no cf with Australia where the wealth of the top 1% and even the 25% middle class is far higher. The potential for great GNp gains from extra investment in agriculture of manufacturing in NZ are very modest. Much more attractive would be to boost service and tourism industries which requie changes to licensing, zoning and law. It is not tax but social planning that is the enemy of growth here.

  10. The Anti-Leftie, 15. July 2011, 14:03

    If property prices drop by 17% in New Zealand, there will be a large number of first home buyers who will be trapped in their homes. They will have negative equity, as they are most likely have purchased their dreams with a 5 – 10% deposit.
    Then all it will take for a full blown housing/economic crisis is for these people to lose their jobs as the next wave of the recession hits (due to the introduction of the CGT on businesses & shares). They won’t be able to cover the mortgage as they have no job, and they won’t be able to sell, as they’d lose their original deposit… Labour would have to put the top tax rate up again (to 60%) so that they could afford to bail out their supporters.
    Well done, Phil, Well done.

  11. Zippy the Pinhead, 15. July 2011, 14:18

    @Leon – Take a chill-pill, dude or perhaps in your case, increase the dose! I’m going to resist the temptation to reply to the contents of your RANT & just reply to your second post.
    If a guy can’t update his own webpage without getting people upset… the country is in a worse shape than I thought.

  12. Carl, 16. July 2011, 16:10

    Anti leftie ,Australia is not NZ (I was mentioning the 17% property price drop for another reason).
    The recession, and the job losses, are more of a concern for first homebuyers -its completely unrelated to a CGT.
    You cannot propose a lame scenario without economic reality just to try to mock Labour’s middle class election lollipopCGT.
    Rob If society is the enemy of growth( which i is not), then how easy is it for a wealth growth obessionist to turn into a selfish lonely individual.