One News reports:
Labour leader David Cunliffe’s Capital Gains Tax is again under fire – this time from economists at the NZIER who say it won’t generate anywhere near enough money to cover the party’s spending promises.
Labour has over-estimated its capital gains tax numbers, according to a report by the New Zealand Institute of Economic Research. The report was commissioned by Federated Farmers, which strongly opposes the proposal.
Labour predicts a capital gains tax should raise $3.7 billion by 2026. But the Institute claims it’ll actually bring in less than half of that.
So who do we believe? The NZIEr is probably the (or one of the) most respected economics firms in New Zealand.
Labour on the other hand is the first opposition party in around two decades to decline the offer by Treasury to have a secondee in their office, who could credibly cost their policies for them.
It’s not a hard call.
And in related news, the Taxpayers Union has released a paper by Dr Michael Dunn analysing the likely fiscal impact of the Green Party wages policy. Dr Dunn is the former head of forecasting at IRD, so is an expert in forecasting.
The Greens claimed their wages policy will bring in an extra $800 million a year in tax revenue to the Government. Dr Dunn has calculated that in fact it would result in around $110 million less tax revenue every year, So that is a $2.7 billion hold in the Greens costings. We have a surplus projection of $300 million, so goodbye surplus.
The Greens and Dr Dunn agree that the direct cost of their policy on the Government will be $1.1 bllion over three years. Add on the reduced tax revenue and the total impact on the Government’s books is to leave the Government’s books $1.4 billion worse off – compared to their claim that it would be $1.5 billion better off.
These are not minor differences. These are billions of dollars. And just on one policy!!
I think it is time that we have what the US have, and a NZ version of the Congressional Budget Office which can independently cost policies proposed by parliamentary parties. NZers deserve better than to be conned by political parties that grossly mislead voters over the true costs of their policies.Tags: costings, deficit, Greens, Labour