Keith Melville

I agree with Peta Barker, Labour’s Eastern Bay branch secretary, that our tax system should pay for our collective wellbeing – for health, education, superannuation, and other essentials (Beacon, February 6).

Ms Barker was responding last Friday to my letter a few days earlier pointing out some horrific flaws in Labour’s proposed capital gains tax (CGT).

Where we totally disagree is on how that tax should be raised and spent.

Labour sees itself as the party of fairness and social justice, but whacking one small section of the community with Labour’s tax truncheon and leaving all other unscathed is hardly a fair way of achieving its lofty ideals.

That is pure hypocrisy.

Furthermore, taxing some people on equity that has already been earned and taxed on the way to becoming equity, just adds to the absolute inequity of Labour’s lopsided plan.

Ms Barker says I never offered an alternative in my criticism. I did, but in a tongue-in-cheek way. I suggested a bona fide CGT – a tax on all wealth when sold or inherited. This would apply to increases in value over time, minus the inflationary loss of value. It could include the family home, farms, all other property above a certain value.

Because that tax would be all-embracing it would not need to be anywhere near as high as the 28 percent tax Labour is planning for residential and commercial property investors.  

Perhaps the rate for my suggested wider CGT could be as low as 2 percent or a bit more.

Labour realises an all-embracing capital gains tax would be too difficult to sell to the voting public, and that is why it has taken its gutless approach.

It has selected an easy target often vilified by its supporters and those of the left – landlords.

Even though Labour says it will spend the money it raises from its CGT on health, why would anyone trust Labour with our money?

Look what happened to the billions Labour borrowed to pay for the Covid recovery. Treasury later found that much of that money was misspent, a nice way of saying it was wasted.

Saving money and spending it wisely is not Labour’s forte. For some strange reason, the left finds it anathema to cut costs by removing feather-bedding.

Look at how the Wellington bureaucracy ballooned in the previous Labour Government, and look at those hideously expensive pay equity claims for school teachers, nurses and others that Labour thinks the tax system should absorb.