Tax. It was only a matter of time before the subject became the main topic of discussion in the election campaign. And here we are.
If only it could all be dealt with in one day. Alas, no. Now that it’s here in actual, rather than speculative form, tax policy will be part of the election noise right up to October 14 and probably beyond the vote count.
Labour put out its tax policy a couple of weeks ago and now that National has released theirs, the numbers game has begun in earnest.
Labour copped a lot of flak for its proposal to take gst off fruit and vegetables. A laudable attempt at tackling inflation and the cost of living crisis, but it went stale rather quickly.
National is proposing to put some money in your back pocket, through a tax cut. It is hardly a new approach to gain favour, but it can be a vote-winner, provided the public believe, or more importantly understands, the shuffling of financial ins and outs to make such a cut viable.
Most of the so-called minor parties have also provided details of their respective tax policies and it seems all have stayed within their tax category. Unless there’s a hidden variation that has yet to be spotted in the fine print. And that prospect should not be discounted.
Quicker than an accountant spots a write-off, the critics came out swinging.
Labour’s Grant Roberston went for a pointed adjective, describing National’s plan as “dodgy”. That’s not a word one wants associated with your tax plans.
His calculations have National demanding 8 per cent cuts in many government agencies, which will translate to a drop in frontline services. He also maintains that National have overestimated revenue from a number of sources.
Robertson’s first barb was quickly followed by another angled adjective.
“National is laying out some voodoo costings … with their claim to be able to grab $740 million per year from foreign buyers,” the Finance Minister said.
So that’s dodgy and voodoo. I see a pattern developing.
You may recall that it was Chinese buyers [or at least those with Chinese-sounding names] who were infamously highlighted by Labour in 2015 because they may or may not have been the main drivers of a foreign-buyer-fueled property boom.
In summary, National believes a Foreign Buyer Tax would bring in about $700 million a year. It says it will keep the foreign buyer ban for homes worth less than $2m. Homes worth more than $2m could be sold to foreign buyers, but these would be taxed at 15 per cent.
Whatever the objective or accusation, in 2015 or now, China is currently grappling with a massive property investment downturn, so I seriously doubt many speculators there will look to the market here for an answer. For that matter, economies the world over are in a deep slump, just like ours.
The assertion that tax cuts are not inflationary seems hypothetical, at best. Who could possibly predict with any confidence what people will do should they have a few more dollars in their back pocket?
Trying to find an answer to that question is far too taxing.
