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Cullen on CGT decision: No point complaining about wealth inequality now

Newstalk ZB,
Publish Date
Thursday, 18 April 2019, 8:29AM
Sir Michael Cullen. Photo / Doug Sherring

Sir Michael Cullen says there isn't much point complaining about wealth inequality in New Zealand after the Government announced they won't be implementing a Capital Gains Tax.

Yesterday, Prime Minister Jacinda Ardern said there was no mandate - and no consensus - for a Capital Gains Tax and under her leadership, the Government would never push for one. 

In doing so she has rejected a key recommendation from the Tax Working Group - which cost an estimated $2 million to run.

Former Tax Working Group chair, Sir Michael Cullen, told Mike Yardley it is disappointing that the Government didn't go ahead with the proposed Capital Gains Tax.

"I would have been very happy if we had ended up with a broad Capital Gains Tax on land, because there is absolutely no doubt that for decades we have over-invested in land and that has not helped the economy and it hasn't helped society."

He said rejecting these kinds of proposals makes it very hard to make any sort of social change.

"Given all the other taxes we don't have in New Zealand...there is not a lot of point in people complaining too much about growing inequality of wealth. These kinds of decisions to reject the very mechanisms to do something about that, that we continually seem to shy away from."

However, Cullen acknowledged that the political reality makes it hard to get something like a Capital Gains tax through.

Cullen, who was controversially paid more than $84,000 for his part-time work, has also defended his pay, saying the National Government paid him more. 

"The National Party made a big deal about how much the Government paid me, but actually the National Party paid me about 25 per cent more to do a job for them with security services in 2016. It was a cheap shot for them and as you know I only bill for the work I did so for March, that came to seven hours work."

When asked whether he was the right person for the job, he said he was the "obvious choice".

"I knew as soon as the policy was announced that I was likely to be appointed the chair. It's fairly obvious for a former Labour Minister of Finance and former Labour Minister of Revenue to lead this up.

He said he was sceptical as to how the Government would get a comprehensive Capital Gains Tax past New Zealand First and Winston Peters.

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