‘Apples with oranges’: Labor brushes off Kiwi PM’s dig
Labor has laughed off the New Zealand prime minister’s criticism of capital gains tax, arguing that the two countries have very different systems.
After Kiwi leader Christopher Luxon said introducing a tax on capital gains would be disastrous for the New Zealand economy, Australian employment minister Amanda Rishworth denied it was a dig at the Albanian government’s tax change.
“I don’t think you can compare apples to oranges when you’re talking about different tax systems and different countries,” he told Sky News on Sunday.
“I think neither leader will try to interfere in domestic politics.
“I don’t think this is a direct shot. I think both leaders operate with a completely different tax system in their countries.”
Mr Luxon, who is in Noosa for a two-day annual meeting with his Australian counterpart Anthony Albanese, was asked about New Zealand Finance Minister Nicola Willis’s proposal for Australian entrepreneurs to cross the ditch to avoid the controversial capital gains tax change.
In response, Mr Albanese mentioned a NSW rugby league player who plays for the New Zealand Warriors in the NRL, known as “Wahs”.
“What’s next? Are the Wahs signing another Jackson Ford?” he joked at a news conference with Mr. Luxon on Saturday.
“We have a few Kiwis in Australia too – 638,000 of them.
“One in eight New Zealanders live here. Why? Because it’s a good place to live. Just as Australians will continue to enjoy living in New Zealand.”
“Sometimes there can be a bit of arrogance in the relationship. May this continue for a long time.”
Mr Luxon said it was important that the two countries did not comment on each other’s economic policies.
He said the stricken coalition government was campaigning against New Zealand Labor’s capital gains tax plans and Ms Willis’s comments were in the context of that debate.
“It is no secret that in the New Zealand domestic context there has been a long-running debate going back over 10 years about the merits of introducing CGT (capital gains tax),” he said.
“We think this is not appropriate for New Zealand and we feel quite strongly about that.
“We are in a recovery phase and we think introducing CGT to New Zealand now would be devastating to our economy.”
Labour’s tax reform, which scraps the current 50 per cent capital gains deduction and replaces it with an inflation indexing model, was passed by the House of Representatives on Thursday.
The bill would also eliminate adverse practices on established properties and impose a minimum 30 percent tax on capital gains, which economists say could contribute to a drop in home prices by as much as 10 percent.
However, the future of the legislation is uncertain, with the Greens yet to indicate whether they will support the measures in the upper house.
Shadow Treasurer Tim Wilson was delighted with Mr Luxon’s comments.
“In the age of artificial intelligence, I think it will be important now more than ever to support the entrepreneurial energy of the Australian people,” he told Sky News.
“Labour wants to damage entrepreneurial energy and the growth of this country.”
On comments suggesting that the 2020 capital gains tax cut was too high and was reinforcing generational inequality, Mr Wilson said his views had not changed and that the real problem was that income tax was too high.
“We have a capital gains tax deduction because we have to deal with inflation and its impact on the value of assets, so there is basically no problem with having a 50 percent deduction,” he said.
Finance Minister Jim Chalmers said the tax changes would compensate asset owners for inflation better than the current system.
“Tim Wilson appears to have reluctantly endorsed our reforms to capital gains tax relief, which is not surprising given that he has advocated for such changes,” Dr Chalmers said.
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