Unions urge speed on capital gains tax

Press, 9 October 1987, Page 22

Unions urge speed on capital gains tax

Staff reporters The Government is being urged by the trade union movement to introduce a capital gains tax as soon as possible. This follows up the publication of a discussion paper, "Taxing Capital Gains,” prepared by the combined Federation of Labour-Combined State Unions tax research project in Christchurch. The main conclusion of. the paper was endorsed by the secretary of the F.0.L., Mr Ken Douglas, and the secretary of the C.S.U., Mr Colin Clark. "If the Governriient is serious about tax reform, it must introduce a capital gains tax as soon as possible,” they said. The conclusions in this and future papers would

not necessarily reflect F.O.L. or C.S.U. policy, but unions would have a chance to contribute to projects before final repdrts were released. They said this paper made it clear that New Zealand was a virtual tax haven without such a (capital gains) tax and was lagging behind the rest of the world. For example, the United States had had a capital gains tax since 1913 and during the last year the Reagan Administration had strengthened it. “This anomaly can no longer be sustained in New Zealand, particularly since the introduction of a capital gains tax in Australia and given the harmonisation requirements of C.E.R.,” said Messrs

Douglas and Clark. The research for the paper was done by Ms Vivienne Nelson in Christchurch. She rejected suggestions that the proposals in the paper were either radical or particularly novel.. “International tax experts say this tax is inevitable,” Ms Nelson said. “We are not talking about radical tax reform; we are just talking about catching up with the rest of the world by changing an unfair situation — where companies and the wealthy can avoid tax.” Support for a capital gains tax was coming from a wide cross-section of the country; including researchers, the Reserve Bank, and members of the Business Roundtable.