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Inland Revenue raises capital gains tax questions

Published

2 years ago

September 26, 2024

Inland Revenue (IR) is asking questions about the future of the tax system – including whether the country needs new types of tax, such as on capital gains and land.

The issue of whether the country needs a tax on capital gains surfaced again this week, with ANZ’s chief executive Antonia Watson telling RNZ she believed it was time for such a tax.

Labour says it is looking at its tax policy and is considering capital gains, wealth or capital income taxes.

IR is consulting on the future of the tax system as part of developing its next long-term insights briefing, which it produces in its role of providing advice to the ministers of revenue and finance.

In its consultation document, it said it wanted to open discussion on the challenges the tax system faced and possible options to address that.

“There are several trends that could have significant implications for our tax system in the future. The most relevant trend is that of increased fiscal pressures from superannuation and healthcare costs.

“Future governments will have the option to respond to these pressures by either changing legislative settings, managing expenditure growth, making greater use of user-pays mechanisms or increasing the amount of tax that is raised relative to GDP. We will have greater fiscal resilience if our tax system has flexibility to adapt to changing revenue needs over time.”

It was considering the pros and cons of new tax bases.

“We will consider the pros and cons of taxes on payroll – including social security contributions, land, real property, wealth, inheritances or estates, turnover, and transactions, and what overlaps and differences there are in these bases versus our existing bases.”

It said New Zealand was unusual among OECD countries for not having a general tax on income from capital gains.

New Zealand’s income tax base was broad but the lack of a capital gains tax was a clear gap.

“Future fiscal pressures mean that alternative tax bases are likely to be contemplated…Further, there is a question as to what mix of tax bases should form the stable core structure of our tax system, which is relevant at current revenue levels.”

The lack of tax on income such as capital gains could mean it was harder for governments to increase tax revenue while still achieving equity goals, it said.

Tax expert Terry Baucher said it was notable that the department had chosen that consultation process to discuss the question of, if the country were to try to increase tax revenue, what the options would be.

He said there were a number of issues that were likely to require more tax revenue.

He expected Treasury chief economic adviser Dominick Stephens to use a Thursday speech to reiterate the position that there were likely more demands coming in future than current revenue could cover.

“The Tax Working Group in 2019 recommend a capital gains tax because it could see the coming fiscal crunch.”

As well as issues such as funding for the health system, the country needed to be able to cater for climate change costs, he said.

“We have a demographic crunch, we have superannuation costs to pay for, we have an ageing population, rising health costs all coming together.”

New Zealand’s demographic mix was changing but much of the country’s wealth was held by the older Pakeha population, he said.

“The older group will be expecting NZ Super, continued health care, and increasingly for those that have beachfront properties they’ll also be wanting support – there are going to be areas we’re going to have to abandon. That can’t all be funded by the present tax base, there are uncomfortable tensions.”

He said a capital gains tax (CGT) would be a simpler way to apply tax – at present there are a number of scenarios in which capital gains are taxed and there are different regimes applied, such as the foreign investment fund, which was a de facto wealth tax.

“People talk about the complexity of a CGT but I don’t buy that.”

Before 1949, land tax, gift duties and estate duties were 4 percent or 5 percent of the country’s tax take, he said.

NZIER chief economist Christina Leung said a broad-based GST would be sensible if it was administratively simple.

“This means there should be no exemptions from the CGT, that assets only enter the regime when it is purchased after the implementation of the scheme, and that it is taxed on a flat rate rather than the individual’s marginal income tax rate. The implementation of a CGT should also be part of rebalancing of tax away from income tax, rather than as a way to increase the overall tax take.”

Craig Renney, policy director at the Council of Trade Unions said the country should look at what revenue was needed and then determine what taxes would be required to pay for it. “What does a good housing system, look like? What does a good education system, look like?

How much will that cost? Then we can have a conversation about how we pay for it, not the other way around. If we can work out what ‘good’ looks like it becomes so much easier to say this tax might help us get there.”:

He pointed to OECD data showing New Zealanders have the second-lowest “tax wedge” – tax as a proportion of income, in the OECD. This includes the offsetting effect of Working for Families.

rnz

Latest News

Police say person who fired gun at officers still at large

Published

2 days ago

November 12, 2026

News Staff

Police say a person who fired a gun at officers in Napier is still at large.

Eastern District Commander Superintendent Joel Lamb said Police tried to stop a vehicle in the Pirimai Area at about 10pm on Tuesday.

He said someone in the back seat pointed what was presumed to be a firearm at officers pursuing the vehicle.

“Staff have then heard two distinct gunshots as the firearm was discharged.

“Fortunately, neither of our officers were injured, and the patrol vehicle did not sustain any damage.”

He said hours later, the vehicle was seen travelling north on the Waikato Expressway towards Auckland.

Police seized the vehicle at an address in Manurewa, but they had not found the alleged offender.

Lamb said people who lived at the Manurewa address were engaging with Police.

He said Eastern District and Counties Manukau Police were making enquiries.

“Presenting a firearm at a Police officer is a serious escalation that puts our staff and the wider community at risk. This behaviour is entirely unacceptable.

“We are taking this incident extremely seriously and will be pursuing all lines of enquiry to locate the offender and hold them accountable.”

Police asked anyone who witnessed the incident to contact Police on 105 or online using the reference number 261111/3764.

Information could also be provided anonymously via Crime Stoppers on 0800 555 111.

rnz

Latest News

New Zealand sides named for RLWC finals

Published

3 days ago

November 11, 2026

News Staff

The players tasked with ending Australia’s Rugby League World Cup dominance have been named.

The Kiwis and Kiwi Ferns have announced their squads for this Sunday’s World Cup finals in Brisbane.

Both sides are chasing their first titles since 2008, and both are looking to end their opponents run of three crowns in a row.

“Our Kiwi Ferns have been so dominant in years gone by, and we want to bring dominance back to this jersey, so I think it will be a case of who wants it more,” said co-captain Georgia Hale of the impending clash.

The Kiwis get a major boost for the final as they welcome back Ronaldo Mulitalo after he served a one-match ban for a high tackle against Fiji Bati.

Mulitalo replaces Charnze Nicoll-Klokstad, who moves to the six-man bench, which again includes utility Te Maire Martin, middle forwards Naufahu Whyte, Erin Clark and Xavier Willison plus fullback Keano Kini.

Loose forward Joseph Tapine will make his 30th Test appearance in a familiar pack again, including second-rowers Isaiah Papali’i and Briton Nikora, and props James Fisher-Harris and Moses Leota.

Winger Jamayne Isaako is on the cusp of claiming the New Zealand record for most Test points.

His five goals against Tonga lifted his career points tally to 225 – level with Shaun Johnson – while centre Casey McLean goes into the final with 16 tries in just eight Tests.

Fisher-Harris will again captain the team.

Fullback Ponga said the goal of the group was clear.

“We have high expectations around what we want to achieve, and obviously winning a world Cup is one of them.”

Meanwhile, Ricky Henry has selected a settled side to take on the Jillaroos, led by their lethal centre combination of Stacey Waaka and Mele Hufanga.

Veteran Apii Nicholls takes the number one jersey, Leianne Tufuga and Mackenzie Wiki on the wings.

Henry has stuck with his halves pairing of Chantay Kiria-Ratu and Raecene McGregor with Alexis Tauaneai, Georgia Hale and Otesa Pule up front.

Rounding out the starting pack is Shaniece Monschau, Kaiyah Atai, and Angelina Teakaraanga-Katoa.

“We have been building well throughout the tournament; we understand the Jillaroos side, and will give it our all to make New Zealand proud this weekend,” said Henry.

RLWC Finals:

Kiwi Ferns vs Jillaroos- 6.10pm

Kiwis vs Kangaroos – 9.35pm

Sunday November 15

Suncorp Stadium, Brisbane

Live blog updates on RNZ

Kiwi Ferns:

1. Apii Nicholls 2. Leianne Tufuga 3. Mele Hufanga 4. Stacey Waaka 5. Mackenzie Wiki 6. Chantay Kiria-Ratu 7. Raecene McGregor 8. Alexis Tauaneai 9. Georgia Hale 10. Otesa Pule 11. Shaniece Monschau 12. Kaiyah Atai 13. Angelina Teakaraanga-Katoa.

Interchange: 14. Ashleigh Quinlan 15. Annessa Biddle 16. Shannon Mato 17. Ivana Lauitiiti.

Reserves: 18. Brooke Anderson 19. Zahara Temara 20. Brianna Clark 21. Abigail Roache 22. Tenika Willison.

Kiwis:

1. Kalyn Ponga, 2. Jamayne Isaako, 3. Dane Gagai, 4. Casey McLean, 5. Ronaldo Mulitalo, 6. Kodi Nikorima, 7. Jahrome Hughes, 8. James Fisher-Harris (c), 9. Jeremy Marshall-King, 10. Moses Leota, 11. Isaiah Papali’i, 12. Briton Nikora, 13. Joseph Tapine (v/c).

Interchange: 14. Te Maire Martin, 15. Naufahu Whyte, 16. Erin Clark, 17. Xavier Willison.

Reserves: 18. Keano Kini, 19. Phoenix Crossland, 20. Charnze Nicoll-Klokstad, 21. Scott Sorensen, 22. Leo Thompson.

rnz

Latest News

Parliamentary Service working on extra chairs and offices for increased number of MPs

Published

3 days ago

November 11, 2026

News Staff

The chief executive of the Parliamentary Service is confident there will be enough room to accommodate the increased number of MPs and their staff coming into Parliament.

On current numbers, up to 131 MPs could be sitting in the Chamber following the election, brought on by a record overhang result.

Clerk of the House of Representatives Dr David Wilson told the Spinoff that currently the debating chamber had enough chairs to seat 124 MPs – including the Speaker of the House – and work was being done to accommodate more by altering the seating arrangement.

In a statement, Parliamentary Service chief executive Rafael Gonzalez-Montero said planning for a larger Parliament had been going for “some time”.

“Now that the election results have confirmed an increase to the number of members we are looking at several options.

“We are confident we will be able to accommodate all members within the Chamber.”

Chief Executive of the Parliamentary Service Rafael Gonzalez-Montero appears before select committee. — Parliamentary Service chief executive Rafael Gonzalez-Montero.

VNP / Phil Smith

Gonzalez-Montero said office accommodation for members and their staff would be “stretched” for a short time, but the new Members’ Building was only a few months away from “practical completion”.

That building – located behind Parliament – was due to be ready to occupy in April next year and had capacity to accommodate around 30 backbench MPs.

“All members should be in fit-for-purpose accommodation from that point,” Gonzalez-Montero said.

Following the 2023 election, 123 MPs sat in the Chamber – a record number at the time. That decreased to 122 following the resignation of National MP Judith Collins.

Collins held the seat of Papakura and stepped down in May and Parliament voted against holding a by-election because it was too close to the election.

The election result also meant high-ranking National Party MPs like Chris Bishop, Paul Goldsmith, Nicola Willis and Gerry Brownlee – Speaker of the House and an MP for 30 years – would likely not make it back into Parliament.

Only resigning or retiring MPs were permitted to give a valedictory speech meaning none of them would get the chance to give a valedictory statement.

Asked if their would be special allowances for valedictories, Wilson said in a statement that normally only MPs were allowed to speak in the House but the House could suspend its own rules or temporarily alter them.

“It could do so to allow former members to address the House.”

Wilson said no such arrangements could be made until the next Parliament opened and members sworn in.

rnz