Round Two: Bridges v Ardern on CGT did not begin well

Author
Audrey Young, NZ Herald ,
Section
Opinion,
Publish Date
Wednesday, 6 March 2019, 6:48p.m.

Prime Minister Jacinda Ardern questioned the motives of National leader Simon Bridges in highlighting possible exemptions for Māori from a capital gains tax.

And Deputy Prime Minister Winston Peters questioned the extent to which Bridges considered himself Māori.

It was Round Two of the Bridges- Ardern clash in Question Time since the Tax Working Group report was released nearly two weeks ago.

It didn't begin well. Bridges asked a simple question loudly and in staccato style, asking if she stood by all her Government's statements.

She mimicked him back: "MR - SPEAKER - YES!"

Bridges targeted exemptions for Māori entities for which the Tax Working Group argued strongly – but said the Government needed to talk about it more with Māori.

He quoted the section which said Māori freehold land merited "specific treatment under an extension of the taxation of capital gains – this could take the form of an exclusion".

Ardern, after sarcastically congratulating Bridges for finally reading the report, and saying the report said the Government should think about it, she said: "I'd really like to question the member: where exactly is he trying to go with this issue – where exactly?"

Bridges: "Does she accept it is not where I'm going. It's where her Government is going on a capital gains tax and will her Government exclude Māori from any capital gains it imposes?"

Ardern: "I question the motivation behind this line of questioning."

Finance Minister Grant Robertson weighed in on the fact that Bridges was highlighting the part of the report about exemptions for Māori, rather than using the term Māori freehold land.

"What does the Prime Minister make of the fact that the questioning around this issue saying 'will Māori be exempted' rather than saying 'will Māori freehold land be exempted? Why does she think someone might make that kind of statement?"

Speaker Trevor Mallard ruled out the question on the grounds that the Prime Minister could not read other members' minds.

Then Peters, in a clear reference to Bridges' own Māori ancestry, asked whether consideration about the capital gains tax would "have regard to how much a person feels like they are a Māori or whether they discovered that somewhat the same way as Columbus discovered America – purely by accident?"

Mallard also ruled that out of order.

Bridges accused the Government of being politically selective – by treating some of the report's options as absolute recommendations, such as offsets to counter loss of KiwiSaver benefits, and others as firm recommendations such as exemptions for Māori freehold land.

The Government is due to deliver its response to the Tax Working Group report in April and given that Labour and the Greens strongly support a capital gains tax, its response will be largely shaped by Peters' party, New Zealand First.

Chaired by former Labour Finance Minister Sir Michael Cullen, it recommended a comprehensive capital gains tax, excluding the family home and personal assets such as art and jewellery.

It said some types of transactions relating to collectively owned Māori assets merited "specific treatment in light of their distinct context."

The report recommended that the Government engage further with Māori "to determine the most appropriate treatment of transactions relating to collectively owned Māori assets".

It said that with population growth, the shareholder base of such entities was perpetually diluted so any capital gains made on ownership interests were likely to be non-existent or very small.

The working group said deferral of CGT should apply to iwi transferring assets to associated hapū and marae, particularly after Treaty of Waitangi settlements when assets were dispersed.

And it said CGT could also create an impediment to a Māori organisation's ability to regain ownership over land lost as a result of historical Crown action.

 

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