Dom Post on Labour’s own goal

October 2nd, 2013 at 11:00 am by David Farrar

The Dom Post editorial:

The immensity of the task facing new leader David Cunliffe is starkly illustrated by his party’s bungled attempt to embarrass the Government over new minimum house deposit rates.

Mr Cunliffe has talked about putting Labour on a war footing. This week’s events show it is not on a war footing. It is in a deep slumber. …

It is six weeks since the bank announced a minimum deposit level of 20 per cent for most home buyers. You’d think in that time Labour would have been able to come up with a young family who’d been saving for several years and had had the dream of home ownership snatched from their grasp at the last minute. Instead the best the party could manage was a 23-year-old IT consultant who was not even sure he would live in a house, if he bought it. “If it’s good enough I could live in it, otherwise it could be an investment property,” said Kanik Mongia.

No criticism of Mr Mongia. Good on him for saving enough for a 10 per cent deposit on a $400,000 to $500,000 home.

But does Labour really want to portray itself as the party of upwardly mobile young property investors? And is it really prepared to undermine the integrity of monetary policy to give Yuppies a leg up?

It was a staggering own goal. They propose destroying the independence of the Reserve Bank so a 23 year old can get a bank to fund a $500,000 investment property for him. It would be difficult to find a more unsympathetic case to highlight.

Not only did they fail to find someone better, they had their leader railing against property investors in the same story as they are promoting one.

I’m reluctant to blame parliamentary staff for the failings of a party, but in this case the bungle should ring warning bells. I have to assume that Cunliffe wasn’t told that the photo op he was doing involved an aspiring 23 year old property investor. Surely he would have said no if he was told.

So this suggests that his leader’s office didn’t do due diligence on the person. They should have had a conversation with him and found out that he was thinking of using the house as an investment property.

At this early stage you can get away with errors like that, but going into the election you can’t afford to have such fuck ups.

Labour’s failure to find a more suitable “victim” for its campaign indicates that it is either out of touch with the issues or not well connected to the community it purports to represent.

However, the party’s fortunes will not be transformed simply by the leader performing better. The party must also do its bit. On this week’s evidence it has a long way to go.

Normally it is the Government that is happy when there is a recess as it means no question time. I’d say Labour should be very happy there is no Parliament this week, because they’d be getting a massive mocking in it, if there was.

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58 Responses to “Dom Post on Labour’s own goal”

  1. WineOh (547 comments) says:

    They’ll go back to the “safe” option like the Greens, using their own party members and stooges as examples where they can be assured of getting the perfect (often false or at least extremely misleading) case study.

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  2. burt (7,797 comments) says:

    Labour policy from 1999-2008 was a boom for property investors – and that was while they were claiming to be the voice for the struggling … Who is stupid enough to think the next Labour government won’t also suffer massively from the unintended consequences of intervention and social engineering policies.

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  3. Tom Jackson (2,458 comments) says:

    Hidden due to low comment rating. Click here to see.

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  4. woodburner (27 comments) says:

    Also according to the guy’s Facebook page, he is from India originally and presumably moved here to study. Is he a resident? Does that start to get into the foreign speculator territory which labour are opposed to also?

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  5. Harriet (4,504 comments) says:

    I don’t want to give back the economic management of this country to the people who were on the bridge when the ship ran aground.

    People gain the opportunity of housing themselves with an expanding private sector – not an expanding ‘economy’ – a eupherism for ‘an expanding government’.

    A 47% increase in liabilities of government is a fucken iceberg to those who were awake, and as they know, what actually shrinks is the private sector.

    Labour were members of the Titanic school of economic management and they presided over the most disastrous economic and social shipwreck of the last 50 years – entire extended families are now broken and renting.

    And women have near worthless degrees and jobs in government departments where they earn the ‘living wage’ ‘paying back’ student ‘loans’. Tokenism to useful idiots.

    ‘Liberated women’ are right back at square one – with no chance of a mortage!

    the Conservatives will downsize government to liberate these women from the daily grind of being ‘wage slaves’ to ‘progressive government’.

    The private sector will give them their long awaited dignity!

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  6. iMP (2,232 comments) says:

    And here’s another own goal, a full page Labour ad, advertising Under-Age sex groomer Paul Findlay in The Press. So, is under-age sex with strangers now Labour policy?

    http://conzervative.wordpress.com/2013/10/02/labour-still-publicly-backing-under-age-sex-groomer/

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  7. Adolf Fiinkensein (2,790 comments) says:

    I wonder if the white anting from within has started already.

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  8. Peter (1,578 comments) says:

    This sort of “subtle nuance” is lost on many of the Labour faithful. All they hear is “that nice man wants to give me a cheap house, and that mean Mr Key doesn’t!”.

    If they were concerned about facts and reason, would they be voting Labour in the first place?

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  9. Tom Jackson (2,458 comments) says:

    Reading the actual article, it’s just silly. He said he didn’t know whether he was going to live in it, but he might.

    I know several young people who bought a house and rented it out as a means of building up sufficient capital to afford a house they could live in. If anything, this story shows how difficult it is to afford a decent house in Auckland.

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  10. Roflcopter (422 comments) says:

    DPF, you’re assuming it’s a bungle by staff… it could just as easily be a big FU DC.

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  11. Cato (1,094 comments) says:

    Nice piece of misdirection, Tom. Avoid talking about David Cunliffe’s political tin ear.

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  12. bhudson (4,734 comments) says:

    No Tom, it shows that David Cunliffe thinks that the Reserve Bank should not limit the availability of low equity loans to property speculators.

    But then we’ve always known that the man speaks out of both sides of his mouth.

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  13. Harriet (4,504 comments) says:

    Tom Jackson#

    “….I know several young people who bought a house and rented it out as a means of building up sufficient capital to afford a house they could live in…..”

    Well arn’t they lucky…..the next ones will be fucked by your Capital Gains Tax!

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  14. Tom Jackson (2,458 comments) says:

    Whine on about this all you like.

    Cunliffe left this issue behind days ago. He’ll be on the box explaining his policy to people who want to hear it while a minority of right wingers derp on about this and his CV.

    People care that the price of housing in NZ is shutting out first time buyers in favour of baby boomers and National’s mates. They’re the people who are going to fuck you in the next election.

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  15. Tom Jackson (2,458 comments) says:

    Well arn’t they lucky…..the next ones will be fucked by your Capital Gains Tax!

    Not if the housing market is under control.

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  16. bhudson (4,734 comments) says:

    Tom, please don’t do anything rash when Cunliffe fails to grasp the imagination of the nation.

    The fall is so much harder and faster when you have invested so much belief into someone being “the one.”

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  17. Adolf Fiinkensein (2,790 comments) says:

    Tom Jackson, the only thing Cunliffe left behind days ago was his brain.

    Take a deep breath, old chap, for it won’t be long before he next ventures into fairyland.

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  18. greenjacket (416 comments) says:

    Don’t under-estimate the damage this has done Labour. Cunliffe saying that he wants to give support for young immigrants to buy $500K investment properties has gone down like a bucket of cold sick with guys I work with who have families and mortgages (and who blame young immigrants like that guy Cunliffe was with for heating up the property market).

    It is such a huge political misstep that I wonder if Cunliffe was set up?

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  19. NK (1,066 comments) says:

    Here’s another one. In 2001, when Helen Clark was PM, Clark and John Howard, who was then Australian PM agreed to a new arrangement in respect of social security arrangements for Kiwis living in Australia. It severely disadvantaged Kiwis, but not so for Australians living over here: http://www.underarmbowling.com/humanrights/pressconference.html.

    Today, David Cunliffe tried to blame John Key for the debacle and said if he was PM he would get a “fair suck of the sav” for Kiwis living in Australia.

    Is there not anyone reminding him of what happened in 2001? Or was he too busy filling in BCG timesheets to notice?

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  20. scrubone (3,044 comments) says:

    Nice piece of misdirection. Avoid talking about the policy and talk about the presentation instead….You’re on the run.

    Wait, you’re saying the Dom Post is on the run?

    How does that work exactly?

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  21. Sir Cullen's Sidekick (785 comments) says:

    Check the latest NZ Herald opinion poll to check who is winning.

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  22. swan (659 comments) says:

    “So this suggests that his leader’s office didn’t do due diligence on the person. They should have had a conversation with him and found out that he was thinking of using the house as an investment property.”

    Maybe they did speak to him beforehand – and he knew exactly what he was doing… In which case – well done that man!

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  23. davidp (3,540 comments) says:

    >So this suggests that his leader’s office didn’t do due diligence on the person.

    Not necessarily. It is very hard to find anyone genuinely in poverty in NZ, as opposed to people who have made terrible life decisions or are bad parents. Labour are reduced to either:

    1. Pretending that their own electoral candidates or party staff are the “man in the street”.
    2. Hoping that people won’t notice that a person in “poverty” has Sky TV and hundreds of bucks of alcohol in the house.
    3. Hoping that the media won’t uncover relevant facts that completely change a story. Like a person who can’t afford food is actually receiving hundreds of bucks of WFF benefits.
    4. Complaining that privacy has been breached when the real facts about the person in option 3 are revealed.
    5. Making up stuff about supposedly real people. Like Rufus Painter.

    So Cunliffe has just invented a new option:

    6. Go in to bat for a young well-off property speculator. Pretend that he is a struggling family of four. Hope that no one notices. When everyone notices, have your minions declare that Cunliffe moved on a couple of days ago and there is nothing to see here.

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  24. Harriet (4,504 comments) says:

    People should go easy on poor ‘ol Tom Jackson:

    The Standard gave out the ABC order 2 weeks ago:

    All Behind Cunliffe.

    And that clearly includes Tom……..he’s no longer allowed to think for himself……if he ever did! :cool:

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  25. georgebolwing (602 comments) says:

    Labour has largely become the party of upwardly mobile, university-educated, professional, middle class, urban liberals. People like DC himself. So I think that rather than being an own-goal, this is talking directly to Labour’s activist base.

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  26. Zapper (925 comments) says:

    Cunliffe moved on days ago…now where was this standard for criticising our leaders when it was the other way round?

    Partial asset sales? John Key moved on years ago (you know, when he won an election in which his opponents made it the biggest issue), yet people are still using taxpayer money to collect signatures? Move on.

    GCSB? John Key moved on when he tore apart John Campbell and made him look like the far left uninformed idiot that he is. Was everyone happy to move on?

    Tom, you’re a stinking hypocrite. Cunliffe made a monumental error, largely ignored by the Labour friendly media, and because he’s trying to pretend it never happened you think we should too?

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  27. Harriet (4,504 comments) says:

    “……party of upwardly mobile, university-educated, professional, middle class, urban liberals. People like DC himself……. So I think that rather than being an own-goal, this is talking directly to Labour’s activist base….”

    Captive to their own captive audience. Out of touch. Unrealistic. Overlords.

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  28. RRM (9,435 comments) says:

    Captive to their own captive audience. Out of touch. Unrealistic. Overlords.

    For a minute there I thought you were talking about the CCCP!

    Then I realised you are :-P

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  29. peterwn (3,148 comments) says:

    Question Time – a chance for National to showcase its stuff and show up the opposition – for 11 / 12 of the questions.

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  30. Richard Hurst (754 comments) says:

    The 20% deposit limit imposed here was a direct result of the insanity of reckless lending seen in the US banking sector which helped create the last bust. NZ does not want to go down that path. I am amazed that labour would have a problem with that. oh wait it’s a National policy therefore since there is no real policy from labour on the issue they revert to the default setting of oppose because its not ours.

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  31. unaha-closp (1,111 comments) says:

    Cunliffe must be promising bail outs for bankers

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  32. Cunningham (811 comments) says:

    Richard Hurst (651) Says:

    “The 20% deposit limit imposed here was a direct result of the insanity of reckless lending seen in the US banking sector which helped create the last bust. NZ does not want to go down that path. I am amazed that labour would have a problem with that. oh wait it’s a National policy therefore since there is no real policy from labour on the issue they revert to the default setting of oppose because its not ours.”

    I agree, how is getting into mountains of debt good for the ecomomy? I have sympathy for people who struggle to save but allowing them to get into massive amounts of debt is not a good thing.

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  33. Paulus (2,496 comments) says:

    Is Cunliffe already being set up within his own staff, in the same way Shearer was.
    ABC still remains as “Anybody but Cunliffe” – it has not gone away.

    Wait until the November Labour Party conference when Helen Kelly, left wingers, and other Unionists, tell him what he is to do to implement their policy. That is why they elected him so they will call the tune.

    In the Standard, the left wing blog, they are in serious discussion of the remits that are to be presented in November – wow, some hairy ones for Cunliffe are already making waves.

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  34. burt (7,797 comments) says:

    Tom Jackson

    Whine on about this all you like.

    Cunliffe left this issue behind days ago….

    The old Clarkism – Move on ….

    Just never admit a mistake Tom … It’s not the Clarksocialist way !!!!

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  35. RRM (9,435 comments) says:

    I’m reluctant to blame parliamentary staff for the failings of a party, but in this case the bungle should ring warning bells. I have to assume that Cunliffe wasn’t told that the photo op he was doing involved an aspiring 23 year old property investor. Surely he would have said no if he was told.

    So this suggests that his leader’s office didn’t do due diligence on the person. They should have had a conversation with him and found out that he was thinking of using the house as an investment property.

    “Never attribute to malice, that which can adequately be explained by incompetence”…?

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  36. alwyn (380 comments) says:

    I don’t understand this discussion at all.
    What is this mistake that The Beloved David Cunliffe supposed to have made?
    I haven’t heard of any, he is the infallible reincarnation of Michael Joseph Savage as far as I can see.
    Perhaps, of course, it is because I have been getting all my news from Radio New Zealand, whether it be Morning Report, Midday Report or Evening Report. They have certainly never hinted in any way that Cunnliffe is anything other that infallible.
    I wonder why?

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  37. bhudson (4,734 comments) says:

    I am amazed that labour would have a problem with that.

    They’re not. Both Cunliffe and Twyford are on recrod as saying that LVR would be part of any toolkit available to RBNZ under Labour.

    It’s a real “four legs good, two legs better” moment for them.

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  38. RightNow (6,647 comments) says:

    Tom Jackson (1,275) Says:
    October 2nd, 2013 at 11:50 am
    Whine on about this all you like.

    Cunliffe left this issue behind days ago.

    Of course… for The Cunliffe has the ability to time travel. The story only appeared on Monday.

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  39. burt (7,797 comments) says:

    RightNow

    You need to read ‘Defending the indefensible 101′ – Pretty much any challenge to your dear leader is to be responded to with “Move on” !

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  40. hj (6,347 comments) says:

    Discussing housing policy without immigration policy will be like speaking in a vacuum.
    http://www.stuff.co.nz/business/money/4622459/Government-policies-blamed-for-house-prices
    http://www.tvhe.co.nz/2010/08/24/savings-working-group/

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  41. SPC (5,356 comments) says:

    The Dom Post editorial is running the line from DPF’s post a day earlier.

    Yet the most affordable first step into the property market is to buy a rental and use tenants to pay most of the mortgage and use the job income surplus to cover the rest. There are advantages to this rather than living in their first property and trying to pay the mortgage off wage income alone. The owner living in the property with the tenants or another rental or with parents.

    Smith and Collins and a number of other MP’s explained how in the late 70′s and 80′s they all did the same thing.

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  42. bhudson (4,734 comments) says:

    There are advantages to this rather than living in their first property and trying to pay the mortgage off wage income alone.

    Yet Labour claim they are opposed to the “speculative economy” of property investment.

    The reality is they don’t actually know what they stand for – other than buying votes with grandiose promises, of course.

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  43. backster (2,076 comments) says:

    First Goff used an Indian honeypot to entrap and old fool, then another shonky Indian was produced to fake scores of votes for Len Brown and now we have a foreign Indian housing speculator flying under false colours for Cunliffe. I think I will withdraw my custom from the Four Square down the road.

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  44. SPC (5,356 comments) says:

    bhudson – are you saying living with tenants in a property you own is speculation? That taking in boarders turns home ownership into an act of property speculation? Or that owning one property and maximising the rent (while single and yet to start a family) by renting it out and living with parents is speculation.

    On that basis any property ownership is speculation.

    I think owning a single property is only speculation when there is quick buying and selling – doing a place up to flick it on (this is a form of economic activity to earn non taxable income and is rarely declared). Whereas basic ownership of one property and renting it out is just a way of developing equity in property before moving into ones own home (most of the equity gain derived from topping up rent with wage income to pay down the mortgage). Its common sense in an expensive market. Its just a step to home ownership and is not really speculative.

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  45. RRM (9,435 comments) says:

    Labour’s pledge (card) to you –
    WE WILL DELIVER:

    :arrow: Corporate welfare for rich pricks

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  46. bhudson (4,734 comments) says:

    SPC,

    Labour claim that property investment is part of the “speculative economy”, so that should give you the lens with which to answer your questions.

    This was a huge fail for Cunliffe. And to think that Fonterra relied upon his expertise in their formation…

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  47. SPC (5,356 comments) says:

    I don’t see the equivalence between buying as a step to afford a home to live in and investing to make an untaxed CG.

    No party is proposing to include a first property within the orbit of a CGT and the purpose is to tax speculation.

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  48. bhudson (4,734 comments) says:

    I don’t see the equivalence between buying as a step to afford a home to live in and investing to make an untaxed CG.

    Labour do. They see the property investors bidding up house prices and locking first home owners out of the market.

    Their CGT policy will actually favour those real speculators who buy a home, live in it while doing it up and then flicking it on for a profit. Those speculators will not have to pay CGT.

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  49. nickb (3,659 comments) says:

    I am voting Labour at the next election even though my politics are well to the right of ACT.

    Why?

    I support a CGT (on the basis there is no end in sight to our enormous government spending and so we need huge taxes to fund it). It will re-balance the tax system and remove enormous amounts of inequity in the taxation of residential property.

    That said, it will have zero effect on house prices and IMO may even increase them.

    All this talk of “speculators” is a load of shit and a fraction of 1% of homes purchased would be purchased by people selling them on for a short-term profit.

    I also subscribe to the Redbaiter school of thought that we may as well have Labour in power if National are just Labour with blue ties.

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  50. swan (659 comments) says:

    “It will re-balance the tax system and remove enormous amounts of inequity in the taxation of residential property.”

    Do you think residential property is currently over-taxed? Because the CGT as proposed by Labour will apply to:

    100% of the sharemarket
    100% of private equity in businesses
    100% of commercial property
    100% of agricultural property
    100% of industrial property, and
    about 33% of residential property.

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  51. bhudson (4,734 comments) says:

    And:

    0% of art collections
    0% of jewelry collections

    So the chardonnay socialists won’t have to pay.

    Oh and 100% of homes in estates [death duty by stealth]

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  52. SPC (5,356 comments) says:

    bhudson, it is existing tax policy to regard investing to upgrade and flick on as something that should be taxed. Labour’s proposed CGT would not change that just because it exempts the residential home (and a first property – there is only one first property) from investment property status.

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  53. nickb (3,659 comments) says:

    More moaning slumlords I see. Viking will be along soon.

    I am an investment property owner too but support a CGT because unlike the posters above I vote out of common, not self, interest.

    I just posted this over at WO.

    Now things brings my to the really important point, I mean the absolutely critical point of why a CGT is needed to make the tax system fairer. We have established above that capital gains are not taxed on the sale of rental properties by mums and dads generally. This is notwithstanding that their main reason for purchasing may well have been to make capital gains.

    However, these people are able to gain tax deductions on interest on money borrowed to buy a rental, to improve a rental, to carry out repairs and maintenance, and so on. So, residential landlords are currently getting tax deductions on expenditure used to produce income that is not taxed. This causes a huge hole in New Zealand’s tax base especially when you consider the hundreds of millions of dollars worth of tax losses produced by the residential rental sector that investors can offset against salary and wages and other personal income, thereby getting tax refunds.

    If you don’t support a CGT, then at the least property investment losses should be ringfenced and not offset against salary.

    If you argue any other position you are simply taking the piss. Residential rental owners get by far the easiest ride out of anyone in the NZ tax system. They simply get double cake and get to eat it too.

    A CGT is not ideal in the sense that Labour won’t decrease other taxes to compensate in all likelihood. But I bet the posters above cheered at John Key’s heroic raising of GST for the greater good and the ridiculous labelling of it as “fiscally neutral” when benefits and super had to be raised to compensate.

    Jesus wept

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  54. OneTrack (2,581 comments) says:

    Nickb and SPC – the question is not really even if a CGT is a good idea. It is more a question of what would a CGT authored by the Chardonnay socialists in Labour look like. I don’t see practicality is going to be high on their list. Then you have the likely input of their coalition partners -even less practical and more utu. Didn’t look good and following the faux pas over the last few days, looks even less desirable.

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  55. nickb (3,659 comments) says:

    Agreed Onetrack, which is why it is so tragic that John Key has stuck his head in the sand about it like just about every other golden elephant he railed against in opposition – interest free student loans, raising the age of super, communism by stealth etc.

    A CGT designed by the Nats would likely be better designed which is why its a shame it has been left to the motley bunch of petty thugs led by the second coming of Christ.

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  56. bhudson (4,734 comments) says:

    @SPC,

    The current taxable position for an owner-occupied resident is readily worked around. The owner merely has to occupy for long enough not to attract the attention of IR (a couple of years or so. Far more if their occupation is property development.)

    So under Labour’s CGT they could do the house up over, say, 2 years then flick it on. Not assessed as taxable income and not caught under CGT as it is their residence.

    In fact this is one of the points the critics made over Labour’s poorly defined CGT policy in ’11 – that people would simply invest in doing up their own residences and flick them on for a capital gain that wouldn’t be taxed.

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  57. Anthony (766 comments) says:

    Nickb don’t you think an annual land tax (maybe creditable against income tax) would be a better idea as the initial appeal of property for the ‘get rich quick’ sorts is the immediate tax losses.

    A 15% CGT on quick speculation is not much but for longer term investors, 10 or 15 years down the track, a lot of the gain is inflation and 15% of that would be quite harsh particularly if the property was situated somewhere that has had little real capital gain.

    So once again Labour’s CGT would help speculative rich pricks at the expense of long term investors!

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  58. Andronicus (219 comments) says:

    An anti Labour editorial in the Dom Post. What a surprise.

    Wonder who wrote it?

    Richard Long perhaps?

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