Tit for tat in the tax battleground

9:33 am on 15 September 2017

Opinion - Cartoonist Toby Morris gives his take on Labour's shift in its approach to tax policy after concerted attacks.

Toby Morris

Photo: Toby Morris

Labour yesterday performed an about-face, saying the party - if elected to power - would now seek a mandate in 2020 before introducing any property-based taxes, including a capital gains or land tax. It had already ruled out such taxes on the family home.

The party's plan is still to form a tax working group, which would decide the best way to tackle the overheated housing market, but any recommended changes would not take effect until April 2021.

Labour leader Jacinda Ardern had previously said she wanted to be able to act quickly and bring in first-term changes.

She said yesterday that the party was responding to voters' request for clarity, and denied it was a backdown or a response to polls.

National MPs had rounded on Labour's tax proposals, with the tit-for-tat following the widely discredited $11.7 billion fiscal hole claim.

What's in and what's out of Labour's tax proposals

In

* Introduce water tax of 1 or 2c per 1000 litres for commercial users

* Introduce a regional fuel tax in Auckland at 10c per litre

* Introduce a $25 levy on international tourists visiting New Zealand

* Extend the current bright line test - which taxes sale of properties other than the family home - to five years (up from two years)

* Cancel National's tax cuts

* Remove IRD's secondary tax

* Introduce a tax credit for research and development

Out

* Changes to personal income tax

* Changes to corporate tax

* Changes to GST

* Inheritance tax

* Capital gains or land tax on the family home

Possible - but not until after 2020 election

* Capital gains tax (excluding the family home)

* Land tax (excluding the land under the family home)

Toby Morris is an Auckland-based illustrator and comic artist. He is the creator of The Pencilsword on The Wireless and also half of the Toby & Toby duo at rnz.co.nz.

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