N W ZALAN – April 2019The Working Group thought such taxes were best levied at a local rather than a national level. ... investment properties, land and buildings, business assets,

International Property Tax Institute

IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

NEW ZEALAND – April 2019

NO CAPITAL GAINS TAX; BUT CHANGE IS CERTAIN ................................................................................................ 1

TAKING AIM AT THE LAND BANKERS ..................................................................................................................... 2

NZ GOVERNMENT SCRAPS CAPITAL GAINS TAX ..................................................................................................... 3

MĀORI LAND MUST BE EXEMPT FROM CAPITAL GAINS TAX .................................................................................. 4

CHRISTCHURCH HOMEOWNERS OWE $3M IN OVERDUE RATES ............................................................................ 5

JACINDA ARDERN SAYS COALITION GOVERNMENT UNABLE TO FORM CONSENSUS ON CAPITAL GAINS TAX, WON'T BE INTRODUCED ON HER WATCH .............................................................................................................. 6

MĀORI LAND MUST BE EXEMPT FROM CAPITAL GAINS TAX .................................................................................. 8

REGION'S PROPERTY VALUES GROWING, WHILE AUCKLAND AND WELLINGTON DIP .......................................... 10

CAPITAL GAINS TAX: NEW PUSH TO TARGET PROPERTY OWNERS ....................................................................... 10

WELLINGTON REGIONAL COUNCIL PROPOSES THREE RATES OPTIONS - ONE OF THEM IS A HIKE OF 15.2 PER CENT ............................................................................................................................................................................ 11

No capital gains tax; but change is certain OPINION: Even the strongest opponents of a capital gains tax have probably been taken aback by the Government's decision to completely rule out any new form of CGT. The lack of consensus that the Government was able to build on this issue reflects that a capital gains tax (CGT) is not a simple tax and carries with it a raft of complexity and cost. A number of commentators have recognised the risks that such a tax might pose to New Zealand's productivity and those concerns would appear to be reflected in the Government's decision not to proceed. This will be welcomed by businesses concerned at the cost and complexity that a capital tax would have introduced. So where does this leave us? The Tax Working Group (TWG) undertook a full review of the tax system, of which CGT was only one aspect. But it was the main recommendation which would have led to new tax revenue that could then have been spent on making other changes to the tax system. Still on the cards is a digital services tax (DST) targeted at multinationals operating in New Zealand. This was announced in February and we will see more detail on what is proposed in May. Such a tax is forecast to only add $30-to-$80 million to the tax take each year and like a capital gains tax could carry with it the risk of unintended consequences. With no new major sources of tax revenue imminent, that could have led to a dismissal of the other TWG recommendations. Fortunately that has not been the case, and the good work of the TWG will be continued in a number of areas.

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Forty-one of the 99 recommendations have been signed off for further work by either Inland Revenue or other agencies, with another 22 already being worked on. The balance of the 99 were more observations of the current state of the tax system which didn't require any further consideration. We will now likely see some jostling from interested parties to get their favoured tax issues prioritised up the work programme. It was particularly pleasing that the Government specifically mentioned that they would "continue to cut red tape for business", as one of the TWG recommendations was a whole host of suggestions to reduce compliance costs. Fixing up blackhole expenditure, allowing deductions for seismic strengthening costs and considering allowing depreciation deductions for some building will also be under further consideration. Forty-one of the 99 recommendations of the Tax Working Group have been signed off for further work by either Inland Revenue or other agencies. While property owners are probably rejoicing over the abandonment of a CGT, there has been a clear signal that there will be some further work done around the taxation of land. The initiative which is likely to be pursued first is the introduction of some form of tax on vacant land (like land banking). This would likely be a local body tax rather than something collected by central government. Existing land tax rules will also get a review to ensure they are not contributing to land supply issues. So, while many are likely feeling overwhelmed with surprise, relief or grief by the Government's response to the TWG's core recommendation of a CGT, especially after all the hype, at least we can all be happy that a decision has been made. Now we can get on with the business of consulting on the proposed changes rather than continuing to speculate. And for now at least, one of the most polarising political issues has been put to bed.

Taking aim at the land bankers Land bankers beware. When the Government last week killed off the proposed expansion of capital gains tax, it overshadowed another announcement: that it intends to explore options for taxing vacant land, as a high priority. As the Tax Working Group recommended, it will direct the Productivity Commission to include vacant land taxes in the inquiry it has under way into the funding and financing of local government. The Working Group thought such taxes were best levied at a local rather than a national level. Even so, as a high priority the Government will also include in its normal tax policy work programme a review of the current rules for taxing "land speculators". It will consider repealing the 10-year rule governing the taxation of gains arising from changes in land use regulation. In its interim report, the Tax Working Group noted that in last year's Budget, Australia introduced a measure to deny deductions associated with holding vacant land. While not exactly a tax on vacant land, it does provide a tax incentive to utilise the land for either residential or commercial purposes. But there is a problem with punting this issue into the Productivity Commission's well advanced inquiry into the much broader issue of how better to finance and fund local government. It is that the commission has already considered an idle land tax in an earlier inquiry in 2015. And it was not keen on the idea.

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The commission noted that such taxes were common in East Asia and parts of the developing world. But it cited research into the experience of 25 countries which concluded that such taxes were rarely effective, because of the difficulty of designing them and the administration costs.

NZ government scraps capital gains tax The New Zealand government has announced that it would not proceed with the proposal to impose a capital gains tax due to lack of public support. The Prime Minister of New Zealand, Jacinda Ardern, has ruled out the introduction of a capital gains tax (CGT) under her leadership, despite being one of the main issues she campaigned on with the view that it could make the nation’s taxation system fairer. The CGT was recommended in February by the Tax Working Group, which the government spent $2 million on to review inequities in the nation’s taxation system. The proposed capital gains tax covered assets such as residential rental homes, investment properties, land and buildings, business assets, intangible property and shares. “I genuinely believe there are inequities in our tax system that a capital gains tax in some form could have helped to resolve. That’s an argument Labour has made as a party since 2011,” Ms Ardern said. But due to no consensus being reached within the Coalition government and poor public support, the CGT proposal was abandoned. “After almost a decade campaigning on it, and after forming a government that represented the majority of New Zealanders, we have been unable to build a mandate for a capital gains tax,” the Prime Minister said last week. “While I have believed in a CGT, it’s clear many New Zealanders do not. That is why I am also ruling out a capital gains tax under my leadership in the future.” However, Ms Ardern suggested that other steps could be taken to address inequities in the tax system. “As such, the Coalition government has agreed to tighten rules around land speculation and work on ways to counter land banking,” she said. Finance Minister Grant Robertson said that while the government has canned capital gains tax, other recommendations from the Tax Working Group would be considered for inclusion in its tax policy work programme. “We intend to direct the Productivity Commission to include vacant land taxes within its inquiry into local government funding and financing,” Mr Robertson said. BusinessNZ CEO Kirk Hope welcomed the government’s decision, saying that a CGT would have adversely impacted businesses, reducing funds available for investment and job growth and adding to their compliance burden. “Our members have been very clear that they did not see the justification for an expensive new tax that would have reduced the competitiveness of the New Zealand business sector for no discernible gain,” Mr Hope said. One of the arguments against introducing a capital gains tax was that it had not worked in overseas markets. Across the Tasman, the Australian Labor Party’s proposed housing affordability plan to limit negative gearing to new housing and reduce the capital gains tax discount from 50 per cent to 25 per cent has been met with strong criticism. New modelling from the Property Investment Professionals of Australia (PIPA) found that by limiting negative gearing and reducing the CGT discount, the government would lose $32 billion in revenue over 10 years.

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PIPA chairman Peter Koulizos said that the research found that Labor’s assertion that their policy would save $32 billion over a decade was a “flight of fancy”, claiming that the reverse would be true if investors are driven out of the market. “Investors already pay almost four times in capital gains tax what they receive in negative gearing benefits over a 10-year period, so the government is already ahead financially,” Mr Koulizos said. Industry pundits have also warned that Labor’s proposal would exacerbate the fall in dwelling values, with the data from property research group CoreLogic revealing that national home prices fell by 7 per cent per cent in the year to 31 March 2019. Speaking on a panel at NAB’s annual budget breakfast on Wednesday (3 April), Jonathan Pain, economist and author of The Pain Report, observed: “I’m afraid to say that there’s only one consequence of [changes to negative gearing]. “If Labor wins and that comes in, clearly the sliding house prices are going to slide even further until we get to a new equilibrium. I’m not quite sure where that is.”

Māori land must be exempt from capital gains tax Naturally, no-one enjoys parting with their hard-earned cash – which is why the proposed capital gains tax is such a great idea. It fairly taxes cash which is not hard-earned. It taxes money you make from sitting on land and doing nothing. Money you make because you already have enough cash to invest would be taxed under this scheme. It stops double dipping, and closes a loophole which lets investors pay less tax than the rest of us. It seems very fair. At least, it's meant to be fair – but it could end up being very bad for Māori. The Tax Working Group was tasked with making a "tax-revenue neutral" system, one that was more equitable and fit for the 21st century. The capital gains tax and a raft of other taxation ideas were what the group came up with. But people really hate change. And people also hate it when people like Sir Michael Cullen tell them "all the untaxed income you're making from sitting on land should be taxed". They hate it even more when people like me come along a few months later and say, "Change the tax system now! Like most things, it's stacked in favour of a rich mainly Pākehā elite." Golly, I can feel rage boiling now. Cullen, a man who wasn't afraid of passing legislation which openly benefited Pākehā at the cost of Māori rights, has wisely identified some major issues with the idea of capital gains taxes. His working group has named a few things that should be exempt from the tax. One possibility is to exempt the "family home" from the tax – this is mostly just a crowd-pleasing idea, which will almost certainly be exploited. While business people across the nation scramble for excuses about why they shouldn't pay this very fair tax, iwi leaders have found a reason which actually stacks up: They've already had their land "taxed" numerous times. A tax that was meant to make the system fairer for all could instead be used to further disadvantage and economically exploit Māori. Cullen's group says "some types of transactions relating to collectively owned Māori assets merit specific treatment". It means Māori freehold land, the land returned to iwi during Treaty claims settlements or held since aeons ago, should not be taxed the same as land being sold by developers. The exemption of hapū and iwi held land is essential to the integrity of a capital gains tax. Unlike property developers and investors, Māori will not make a capital gain from their land. Because of Crown abuse, they have lost capital.

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By 1975, Māori had about 3 per cent of their land. The other 97 per cent certainly wasn't sold for a capital gain. When the Treaty claims settlements came along, Iwi Chairs Forum spokesman Ngahiwi Tomoana said Māori settled for about 2 per cent of the value of their claims. "We already think we have been taxed 98 per cent of our Treaty settlement," he told RNZ's Te Manu Korihi. He said it would be fair to tax new investments made by iwi-owned businesses, but Māori land should be exempt from the tax. In my opinion, Tomoana is being unnecessarily generous by saying iwi business ventures could be subject to the capital gains tax. They've surely given the Government more than enough generosity. His and Cullen's call for Māori land exemptions seems unilaterally agreed. Not so, says Simon Bridges. He and Nick Smith questioned Prime Minister Jacinda Ardern in Parliament, trying to make a fuss about the proposed exemption. "Are you going to exempt them," Smith asked. "Will her Government exclude Māori from any capital gains tax," Bridges asked, with the utmost seriousness. An exasperated Smith repeated again, "Are you going to exempt Māori?" To which Ardern duly scolded the pair. "I question the motivation behind this line of questioning," she said. When the Treaty of Waitangi was signed, Māori owned more than 66 million acres of land. By 1975, almost 97 per cent had been sold or taken. Indeed, their motives should be questioned. Desperate as ever, it appeared the National Party was willing to forgo important facts and histories to make it seem like Māori would be granted some sort of unfair advantage. They were clearly not interested in level-headed debate. In reality, this exemption is no advantage – it's a small measure to make a system fair. It's not even compensation for that 98 per cent land tax the government kept. Upon questioning, Ardern should have supported the idea then and there. It is not fair to tax Māori land twice. Instead, she held her time. Her Government is right to seek a fairer tax system for all New Zealanders. A capital gains tax is undoubtedly one of the best ways to achieve that, but the system can't be "mostly fair". It needs to be fair for everyone, which means Ardern needs to ensure that despite race-baiting arguments from the Opposition, the capital gains tax is fair to Māori.

Christchurch homeowners owe $3m in overdue rates Christchurch ratepayers owe more than $3 million in overdue rates, with the worst offender racking up $353,000 worth of debt. The Christchurch City Council is chasing unpaid rates from 1692 ratepayers, who owe an average of $1821 each. Failure to pay rates can result in court action and ultimately a forced sale of the house in order to get the rates paid. Mayor Lianne Dalziel says the council has worked hard to save people money by reducing the predicted rates increase. Figures released by the council under the Local Government Official Information and Meetings Act, show two ratepayers were taken to court in the past 12 months for failing to pay their rates.

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However, there have been no rating sales since July 2016. There were two rating sales between 2010 and 2016 – in Burnside and Phillipstown – which recovered $85,000 of owed rates. Despite continued rates increases, the total amount of overdue rates has fallen 24 per cent since 2017, when $3.8m of unpaid rates was owed. The council has yet to take court action against the ratepayer who owes the largest debt. A council spokeswoman said the chief financial officer has been in correspondence with the person "over some time" to try and achieve settlement. "It is a very complex case and all options are being considered in an attempt to finalise the matter." If those attempts failed, court action would be instigated, the spokeswoman said. Despite continued rates increases, the total amount of overdue rates has fallen 24 per cent since 2017, when $3.8m of unpaid rates was owed. The rates burden on homeowners is only expected to increase after last year's 10-year budget, the long-term plan, projected a 52.35 per cent rise in rates by 2028. The council has managed to reduce the predicted rates rise for 2019/20 from 5.5 per cent to 5 per cent, but the final figure will not be confirmed until the budget is approved at the end of June. The 5 per cent increase will mean people with a $500,000 home pay an additional $131 annually. Their rates bill would be $2766, equating to a weekly bill of $53.19. Mayor Lianne Dalziel and councillors were aware of the increasing impact rates were having on household finances. Dalziel said earlier this year, the council had worked hard to save people money by being "smarter" with way things were done and she hoped the increase could be reduced even further following consultation with the public.

Jacinda Ardern says coalition Government unable to form consensus on capital gains tax, won't be introduced on her watch The Government has this afternoon confirmed they will not introduce a capital gains tax (CGT). Prime Minister Jacinda Ardern said she was disappointed, as the introduction of a CGT was one of the main issues she campaigned on, and she believed it could have made New Zealand's taxation system "more fair". "The Tax Working Group gave the Government, and the country, an opportunity to look at the fairness of our tax system and debate options for change," she said in a statement. "All parties in the Government entered into this debate with different perspectives and, after significant discussion, we have ultimately been unable to find a consensus. "As a result, we will not be introducing a capital gains tax. "I genuinely believe there are inequities in our tax system that a capital gains tax in some form could have helped to resolve. That's an argument Labour has made as a party since 2011. "However after almost a decade campaigning on it, and after forming a government that represented the majority of New Zealanders, we have been unable to build a mandate for a capital gains tax. While I have believed in a CGT, it's clear many New Zealanders do not. "That is why I am also ruling out a capital gains tax under my leadership in the future.

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"The Tax Working Group was a valuable exercise that has delivered some useful suggestions well beyond just the debate on CGT, and I want to thank the Group for its work. "In fact the majority of recommendations will either be investigated further or have formed part of our work programme. "There are other things that can be done to improve the fairness of our tax system. As such the Coalition Government has agreed to tighten rules around land speculation and work on ways to counter land banking. "Work will also continue to cut red tape for business and crack down on multi-nationals avoiding paying their fair share of tax in New Zealand. We have already made changes to address base erosion and profit shifting, and we will shortly release a discussion document on options for introducing a digital services tax." The Tax Working Group, led by Sir Michael Cullen, reported in February, recommending a capital gains tax be introduced. The group gave advice in its report that intellectual property, business assets, shares, investment properties and land should all be put under the new CGT scheme. WINSTON PETERS SAYS TWG REPORT GOOD VALUE AT $2M New Zealand First Leaders and coalition partner Winston Peters said while a capital gains tax was not one thing to come from the Tax Working Group report, there were several other recommendations which would be followed up. "it's a very worthwhile exercise," Mr Peters said. Up to $2 million was spent on the exercise, with over 90 recommendations made to government. He said recommendations around multi-national business tax, land banking and speculation, and tax policy encouraging investment in the national interest would be among the recommendations looked into. He refused to be drawn on whether cross-party tensions were behind a CGT not going through. FINANCE AND REVENUE MINISTERS: TWG POINTS WERE NOTED Finance Minister Grant Robertson said in a statement that the Tax Working Group report found that New Zealand's tax system is working well, but that it also made a number of recommendations which will be assessed. "The final report covered all aspects of the tax system, and a number of the recommendations will now be considered for inclusion in the Government's Tax Policy Work Programme," Mr Robertson said. "That includes exploring options for targeting land speculation and land banking. "We intend to direct the Productivity Commission to include vacant land taxes within its inquiry into local government funding and financing," Mr Robertson said. Revenue Minister Stuart Nash said "officials have been directed to prioritise work on the TWG's recommendations on ways to encourage investment in significant infrastructure projects and improve the integrity of the tax system to crack down on tax dodgers." POLITICIANS AND INTEREST GROUPS REACT Reacting to the news, Opposition Leader Simon Bridges, who had strongly lobbied against the introduction of a CGT, was quick to claim victory, writing on Twitter that "National's relentless opposition to the CGT forced this result". "The CGT debate wasted millions of taxpayer dollars and over 18 months weakened our economy by scaring businesses owners, investors and mum & dads out of getting ahead," Mr Bridges wrote. "Jacinda Ardern still says a Capital Gains Tax would make a difference & the tax system is unfair. Ambiguous reforms are still coming. New Zealanders can't trust Labour on tax."

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New Zealand First leader Winston Peters welcomed the decision. “There is already an effective capital gains tax through the Bright Line test brought in by the last National Government and New Zealand First’s view is that there is neither a compelling rationale nor mandate to institute a comprehensive capital gains tax regime,” said Mr Peters. Green Party Co-Leader James Shaw released a statement saying his party is disappointed with the decision, especially "that the Tax Working Group’s unanimous recommendation to implement a capital gains tax on investment properties isn’t going ahead. "Taxing income from capital the same way we tax income from work would reduce the wealth gap, fix the housing crisis and build a more productive, high-wage economy" Mr Shaw said. "The Green Party will continue to work with Labour on ways to make the tax system fairer, more progressive, and to advance other proposals in the Tax Working Group report such as pollution pricing." Business industry group Business Central welcomed the announcement, saying "businesses and employers are breathing a sigh of relief they will not face this stifling and costly new tax. "A capital gains tax would have worsened the business environment, dis-incentivised owners from growing their businesses, and greatly increased compliance costs. "Our members across the region are glad that common sense has finally prevailed." Federated Farmers economics spokesperson Andrew Hoggard also backed the decision to not introduce a CGT. "It's clear the coalition partners have listened to widespread concerns that a Capital Gains Tax has too many downsides, including massive administration costs and the potential to put the handbrake on the progress of small and medium businesses vital to our economy," he said. "The Prime Minister spoke this afternoon about new measures to tackle land banking and land speculation, an approach that has a much better chance of tackling our housing affordability issues than a CGT." Former United Future party leader Peter Dunne tweeted that it was the "right call" to not introduce a CGT.

Māori land must be exempt from capital gains tax

Naturally, no-one enjoys parting with their hard-earned cash – which is why the proposed capital gains tax is such a great idea. It fairly taxes cash which is not hard-earned. It taxes money you make from sitting on land and doing nothing. Money you make because you already have enough cash to invest would be taxed under this scheme. It stops double dipping, and closes a loophole which lets investors pay less tax than the rest of us. It seems very fair. At least, it's meant to be fair – but it could end up being very bad for Māori. The Tax Working Group was tasked with making a "tax-revenue neutral" system, one that was more equitable and fit for the 21st century. The capital gains tax and a raft of other taxation ideas were what the group came up with. But people really hate change.

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And people also hate it when people like Sir Michael Cullen tell them "all the untaxed income you're making from sitting on land should be taxed". They hate it even more when people like me come along a few months later and say, "Change the tax system now! Like most things, it's stacked in favour of a rich mainly Pākehā elite." Golly, I can feel rage boiling now. Cullen, a man who wasn't afraid of passing legislation which openly benefited Pākehā at the cost of Māori rights, has wisely identified some major issues with the idea of capital gains taxes. His working group has named a few things that should be exempt from the tax. One possibility is to exempt the "family home" from the tax – this is mostly just a crowd-pleasing idea, which will almost certainly be exploited. While business people across the nation scramble for excuses about why they shouldn't pay this very fair tax, iwi leaders have found a reason which actually stacks up: They've already had their land "taxed" numerous times. A tax that was meant to make the system fairer for all could instead be used to further disadvantage and economically exploit Māori. Cullen's group says "some types of transactions relating to collectively owned Māori assets merit specific treatment". It means Māori freehold land, the land returned to iwi during Treaty claims settlements or held since aeons ago, should not be taxed the same as land being sold by developers. The exemption of hapū and iwi held land is essential to the integrity of a capital gains tax. Unlike property developers and investors, Māori will not make a capital gain from their land. Because of Crown abuse, they have lost capital. By 1975, Māori had about 3 per cent of their land. The other 97 per cent certainly wasn't sold for a capital gain. When the Treaty claims settlements came along, Iwi Chairs Forum spokesman Ngahiwi Tomoana said Māori settled for about 2 per cent of the value of their claims. "We already think we have been taxed 98 per cent of our Treaty settlement," he told RNZ's Te Manu Korihi. He said it would be fair to tax new investments made by iwi-owned businesses, but Māori land should be exempt from the tax. In my opinion, Tomoana is being unnecessarily generous by saying iwi business ventures could be subject to the capital gains tax. They've surely given the Government more than enough generosity. His and Cullen's call for Māori land exemptions seems unilaterally agreed. Not so, says Simon Bridges. He and Nick Smith questioned Prime Minister Jacinda Ardern in Parliament, trying to make a fuss about the proposed exemption. "Are you going to exempt them," Smith asked. "Will her Government exclude Māori from any capital gains tax," Bridges asked, with the utmost seriousness. An exasperated Smith repeated again, "Are you going to exempt Māori?" To which Ardern duly scolded the pair. "I question the motivation behind this line of questioning," she said. When the Treaty of Waitangi was signed, Māori owned more than 66 million acres of land. By 1975, almost 97 per cent had been sold or taken. Indeed, their motives should be questioned. Desperate as ever, it appeared the National Party was willing to forgo important facts and histories to make it seem like Māori would be granted some sort of unfair advantage.

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They were clearly not interested in level-headed debate. In reality, this exemption is no advantage – it's a small measure to make a system fair. It's not even compensation for that 98 per cent land tax the government kept. Upon questioning, Ardern should have supported the idea then and there. It is not fair to tax Māori land twice. Instead, she held her time. Her Government is right to seek a fairer tax system for all New Zealanders. A capital gains tax is undoubtedly one of the best ways to achieve that, but the system can't be "mostly fair". It needs to be fair for everyone, which means Ardern needs to ensure that despite race-baiting arguments from the Opposition, the capital gains tax is fair to Māori.

Region's property values growing, while Auckland and Wellington dip Rotorua and Hawke's Bay are seeing significant property value growth, while Auckland and Wellington are slowing, the latest QV house price index shows. General manager David Nagel says value growth in Rotorua is up seven percent in the last three months. "The average value there [is], $472,000 so perhaps benefiting from that ripple effect of the very high values that we're seeing in Tauranga and Hamilton cities." There's been a lot of growth in Dunedin too, but prices there still pale in comparison to the cost of property in Auckland. "The average value in the city is $451,000, that's still pretty affordable when you're comparing say Auckland which has got an average value in excess of a million dollars." Wellington saw values rise by 1.9 percent, while Bay saw growth of 5.7 percent. Nagel said low interest rates and steady migration are still a factor in the market. He expects the growth to slow. "As we see the regions travel down their growth cycle I think we'll see that monthly growth, quarterly growth we've been seeing over the last six months actually peter out to very little growth at all." Nationwide property values increased by 0.5 percent in the three months to March, while Auckland's growth decreased by 0.8 percent.

Capital Gains Tax: New push to target property owners The Government is still assessing the proposal, put forward by Sir Michael Cullen's Tax Working Group, and will respond by the end of the month. A nationwide campaign pushing for a capital gains tax is being launched today by Tax Justice Aotearoa NZ. The campaign, which is officially launched at Parliament at 10am, is backed by advertising in major newspapers across the country, and on billboards and in bus shelters in Wellington. "The campaign will add balance to the current tax debate and give voice to the many people and organisations who believe it's time for a capital gains tax to help reduce inequality in Aotearoa," the group said in a statement. As well as a capital gains tax, the campaign calls for tax cuts for low to middle income-earners and hikes for the highest paid.

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It also suggests reducing GST, pressuring multinationals to pay more tax in New Zealand and taking stronger tax action against polluters. Campaign supporters include the Public Health Association, New Zealand Council of Christian Social Services, Council of Trade Unions, Public Service Association, Hui E! Community Aotearoa, Equality Network, Closing the Gap, Poverty Action Waikato, and UCAN (United Community Action Network). An advertisement in today's New Zealand Herald from the group said tax reform was good for the public good. "Tax Justice Aotearoa welcomes tax reform. It's well known we have a stubborn gap between rich and poor and we don't have enough money to sustain and grow decent public services." Tax Justice Aotearoa, which is part of a global network that launched here last August, has also begun a petition - Tell Jacinda we want a capital gains tax. It's time to join the modern world. By yesterday afternoon, 157 people had signed it. The Government is still assessing the proposal, put forward by Sir Michael Cullen's Tax Working Group, and will respond by the end of the month. It has said it is not bound by any of the recommendations of the group and any tax regime changes, including a capital gains tax, would be put to voters as policy in the 2020 election campaign before being introduced. MYOB's annual business monitor released last week showed small and medium-sized businesses strongly opposed a Capital Gains Tax. The research said 67 per cent of the 1000 small businesses surveyed were against the proposal. Around 48 per cent of those surveyed said they were strongly against the proposed introduction of a tax on profits made from the sale of assets including land, shares, investment property, business and intellectual property. An additional 19 per cent said they were against the proposal. National leader Simon Bridges said the Government had ignored small businesses. "Small businesses make up 97 per cent of all businesses but the Government is ignoring them and the damage it would inflict. No wonder the economy is weakening, business confidence is near record lows and the Reserve Bank is considering rate cuts," he said in a statement. "It may surprise the Government that small businesses are unhappy because it isn't listening. The Tax Working Group didn't even count small businesses when it tried to estimate how much extra revenue the Government would take from a Capital Gains Tax. "The Tax Working Group report says elements of the tax base including shares in private companies and intangible property such as goodwill 'are not known and so are not costed'. That means it didn't count small businesses or the value of their owners' hard slog. "A Capital Gains Tax would hit kitchen-table start-ups, those wanting to raise capital and it would clobber business owners who want to sell up and retire. Before then they'd be hit with increased costs such as having to get their business valued," Bridges said.

Wellington Regional Council proposes three rates options - one of them is a hike of 15.2 per cent Wellington City home owners face a regional rates hike of up to 15.2 per cent, largely driven by rising property values. Greater Wellington Regional Council has proposed three options for the coming financial year's rates rise split, with residential home owners in Wellington City set to be hit hardest.

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It comes after the council recently scrapped a proposal to hike rates in the city by 16.1 per cent, with councillors asking officers to go back to the drawing board. The worst case scenario would now see the city's residential ratepayers pay 15.2 per cent ($79) more in 2019-20. A second option would see a 12.7 per cent ($66) increase, while a third would result in a 7.9 per cent ($41) rise. The document, which will be discussed by councillors on Tuesday as part of its Annual Plan deliberations, says the proposed rates rises have been largely driven by a 44 per cent increase in property capital values in the past three years. That was significantly higher than in other parts of the region. There was also now a higher share of residential properties in the city compared with CBD and business properties, partly because of the demolition of, or damage to, commercial buildings following the 2016 Kaikōura earthquake. However, the capital's bus problems had also contributed to the proposed increase. A further $3.7 million would be needed to add extra services required to improve the network, with $1.8m to come from ratepayers. A $760,000 increase in insurance premiums, and another $419,000 to cover an insurance cost increase at KiwiRail, were also included in the calculations. To lower the city's rates rise to 12.7 per cent, the council would need to reduce the targeted rate people paid for public transport in 2019-20. That would result in higher than average rates increases across most of the region. To reduce the number to 7.9 per cent, the council would need to amend its Revenue and Financing Policy.That would require public consultation, and would see higher than average rates increases in Upper Hutt, Kāpiti (excluding Ōtaki), Masterton, and Carterton. In any case, the proposed average rates rise across the region would be 5.9 per cent. The owners of 10 rural properties in the Tararua District faced a massive rates increase of 59.8 per cent, driven by a 68 per cent increase in property capital values.

Documents

N W ZALAN – April 2019The Working Group thought such taxes were best levied at a local rather than a national level. ... investment properties, land and buildings, business assets,