Dunne calms waters over tax changes
New Minister of Revenue Peter Dunne is moving to allay fears about the government’s proposed changes to how investment income is taxed.
Thursday, November 3rd 2005, 6:26AM
by Rob Hosking
The government released a discussion document on the issue in June and that paper has been criticised for bringing in a capital gains tax on to all offshore investment income, and not just those investments outside the seven grey list countries.
Dunne says he is concerned at the level of alarm about the proposed changes and says he wants to calm debate down.
“I’ve been in the job, what, four working days and I’ve had 15 to 20 letters about it,” he says.
“Some will no doubt be trying the new minister out, but the number of them suggests a pretty significant level of concern.”
Dunne is opposed to a capital gains tax in New Zealand and says some aspects of the changes have that look to them.
“I’m not sure what the potential impact of this is, but I was struck even in the election campaign and earlier about the level of public feeling. Now that I’m much closer to it, it’s much more intense. Dunne has asked officials for a summary of the issues and he sees his first job as calming down that alarm.
“Once I get my own thinking clear…we’ll move to sort out some of the ambiguities and anxieties. But I’m not at this point in a position to indicate what that outcome might be.”
Dunne is – at least implicitly – critical of the way the issue has been handled so far.
“The difficulty I think is that capital gains, in New Zealand, is such an emotional term …of itself it almost makes it impossible to have a rational discussion. People see something that looks like, smells like and feels like a capital gains tax and they assume it is a capital gains tax.
“And I’d have thought, given that background, you ought to set out to try to avoid fuelling that fire,” he said.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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