Or so Bernard Hickey would have us believe, anyway. Apparently she just didn’t know the numbers involved, and if she did, she would have done things completely differently. Actually I shouldn’t say “apparently”, that’s literally what he says, because to some people politics is about winning more than it is about serving the needs of the country.
Apparently it doesn’t occur to him that some people might want a capital gains tax because they do know the numbers.
Just have a look at table C21 in the Reserve Bank’s series of statistics on household wealth. It shows that household net wealth rose $520 billion between September 2008 and the March quarter of 2017. That was largely because of a $320 billion rise in the value of housing and land – none of which was taxed. Some of the rest were rises in the value of capital in businesses, which is untaxed.
It is the dirty little secret of New Zealand’s financial life. There is much more money to be made – tax free – by buying rental property funded by bank loans than by actually working in real jobs. The leveraged returns over the last two decades have increased household net worth from $427 billion in September 1999 to $1.38 trillion by March of 2017.
That is trillion with a ‘T’. That $1.38 trillion is 5.1 times GDP. The gains since National was elected in 2008 are equal to twice the GDP of the country. Over 60 percent of New Zealanders own property and they know their net worth in their bones. It’s no accident that homes.co.nz has become a very popular site because it allows home owners to effectively check their net worth daily as their property values rise.
Read that a few times. He’s right that these are big numbers. Really big numbers. What if someone campaigned on exactly that argument? The gains since National was elected in 2008 are equal to twice the GDP of the country. Figure out exactly how much tax your policy would create on those numbers. Put it right up next to the shortfalls National have created. Does it cover the underfunding for the DHBs that are buying tools at Mitre 10 and leaving men with prostate cancer on waiting lists until their diagnosis becomes terminal? What would it do for the amount of government money spent on emergency accommodation in hotels because there isn’t enough social housing?
Political parties and commentators sure seem to pretty much agree that voters can deal with bad news when it’s about the age of superannuation. It’s taken for granted that we can talk about raising that, when the people who most need superannuation are those who work in low income manual labour and whose life expectancy is the lowest. But apparently homeowners are so fragile we can’t possibly lay out the facts for them and point out that their tax-free gains could literally be saving lives. I guess those billions and trillions are just too big to fail, and I’m sure we all remember the last time we heard that, back in 2008.