Cullen's $1000-a-day change of heart

Mon, 25 Mar, 2019

Sir Michael Cullen never once argued in favour of a capital gains tax during his time in Parliament, newly released documents show.

The documents, collated for ACT by the Parliamentary Library, show that Cullen repeatedly attacked the idea between 1987 and 2008.

“Dr Cullen is now only too happy to whack New Zealanders with a capital gains tax. That's not because he believes in the idea but because he’ll say anything for $1000 a day, says ACT Leader David Seymour.

“The Michael Cullen of the mid-2000s was absolutely right to say the arguments for a CGT are weak.

“Capital gains taxes are costly and complex to administer and will hurt the economy by reducing saving and investment in productive assets.

“The former Finance Minister also repeatedly, and rightly, argued that a CGT would not help bring down house prices.

“Cullen argued there wasn’t a theoretical argument for that position and pointed out that overseas countries with CGTs had experienced significant house price inflation.

"House prices are a supply issue, not a tax issue. We'll only solve the housing crisis when we cut red tape and allow the private sector to build more homes.

“The arguments for a CGT haven’t become stronger since Dr Cullen left office.

“In fact, Cullen himself said: ‘…the arguments in favour of such a tax, which probably 20 years ago were quite strong, become much, much less strong in the intervening period of time, for a whole host of reasons…that is actually not a very worthwhile avenue to explore.’

“ACT agrees. New Zealanders should question why Cullen has had such a significant change of heart on a capital gains tax.”