Hosking on CGT

Mike Hosking writes:

The Capital Gains Tax train wreck is all the evidence you need this is a Government that didn’t have a plan.
Why are we here? Because they’d tried this before, got burned twice – and still didn’t learn the lesson.
Jacinda Ardern personally overrode her party and ran this policy last election to be enacted by now. But she got dragged kicking and screaming into a cupboard and was subdued to the point where she acquiesced, and promised nothing before 2020, then flick it off to a working group.

The working group was specifically tasked with finding a way to make a CGT work, they couldn’t. They told the Government they couldn’t, they were then told to go away and try harder. All the while the Government stalled, pretending they hadn’t made up their mind.
They’re still stalling, pretending they haven’t made up their mind and in that is the naivety, they’re taking their issue, and making a complete and utter hash of it. The Prime Minister, at her post-Cabinet press conference, lectured the media on how to cover this subject, and offered up an olive branch to small businesses and farmers that they’ll be at the top of her mind.

The PM claims she knows small business because she once ran a NGO, which is of course a non-profit organisation. Rather different. Also her CV doesn’t list any NGO she managed except of course when she was President of the International Union of Socialist Youth.

So her reassurance to business owners is she has them top of mind as she once ran the global socialist youth NGO. So reassuring.

If you’re taking farms and businesses out, you open the Pandora’s Box of the fast burgeoning industry that is tax avoidance. Not to mention the fact the more you exempt, the less you actually raise. And the less you raise, the more questions are asked about the cost of compliance and chasing the returns.

The compliance costs are huge. Experts in this area say it will definitely be in the billions of dollars. not just hundreds of millions.