Ryan Bridge: Hey Labour, NZ is not Australia

Hey Labour. NZ is not Australia.

To justify their capital gains tax, they point across the ditch.

"Australia introduced a capital gains tax in 1985, and its economy and incomes have kept growing."

This is true but one does not cause the other. Two things.

1. Australia is not rich because it has a capital gains tax. Australia is rich because it has a larger economy, with greater economies of scale, and mainly, because unlike us, they extract minerals and fossil fuels from the earth for the rest of the world to burn and/or make steel.

Their top export earners are iron ore, oil and gas, coal mining, LNG, and then farming.

Guess where those young people are going when they leave motel city, otherwise known as Rotorua? Probably a mining job Labour wouldn't leave them have here.

2. This is about how the tax is applied, because Labour NZ's tax is treated very differently.

Labour NZ is making no allowance for inflation. So, you'd pay the capital gains tax on a nominal profit, not a real one. 

Which very unfair. The Aussies give you a deduction to take into account inflation. 

So, Labour's NZ 's capital gains tax is, in some, senses harsher than the one across the Tasman.