A Bay of Plenty income equality campaigner says the Government's decision to reject a capital gains tax is a win for selfish, greedy, wealthy people.

Others - a property manager, an investor, a farmer and the Leader of the Opposition - say the decision will be a sigh of relief for many ordinary people.

Yesterday the Government categorically rejected the Tax Working Group's recommendation to adopt a capital gains tax.

Prime Minister Jacinda Ardern said there was no mandate and no consensus in Cabinet after much debate and discussion.


The National Party claimed a win.

Leader, Tauranga MP Simon Bridges said the party's "relentless opposition" had "embarrassed" the Government into backing down.

He said Tauranga would be breathing "a sigh of relief".

"Tauranga is middle New Zealand, it's a bunch of people who work hard, who own small businesses, who take risks and want to get ahead, and a capital gains tax would get in the way of that."

Tauranga MP and National leader Simon Bridges. Photo / File
Tauranga MP and National leader Simon Bridges. Photo / File

Bridges said it was also a win for the local economy - heavily dependent on the building and construction sector - because the tax would have been a disincentive to build, driving up rents.

Rotorua Rentals owner Richard Evans agreed rents would have gone up.

Of the 548 landlords on his books, 10 to 15 per cent told him they would sell up if the tax was applied to rental properties.

That would have reduced the number of rentals available in an already stretched market where it was not unusual to see between nine and 20 families at a viewing.

Rotorua Rentals owner Richard Evans. Photo / File
Rotorua Rentals owner Richard Evans. Photo / File

But Peter Malcolm, the Te Puna-based national secretary of Income Equality Aotearoa New Zealand's Closing the Gap project, said he was saddened by the Government's decision.

"All the arguments about why we should have a capital gains tax are about fairness and equality. It is all related to wellness, which is something this Government talked strongly about.

"All this does is give ground over to the selfish, greedy, wealthy people of New Zealand.

"They have given away the important concept of improving the wellness of all New Zealanders."

He suggested the Government might be feeling hypocritical after making so much "noise" about wellbeing.

New Zealand Prime Minister Jacinda Ardern. Photo / File
New Zealand Prime Minister Jacinda Ardern. Photo / File

The tax was the biggest thing the Government could have done to increase income equality, he said, tied only with increasing its overall tax take to build up social services run down by successive Governments.

The Tauranga Property Investors Association president, Juli Anne Tolley , said it was excellent news that what some investors were calling the "Envy Tax" had been rejected.

She said it would have had a "huge impact across the board" on ordinary people.

"They aren't the heavy investors, these are the people with a second home or who turned their first home into a rental or who are renting out their parents' house to cover the cost of their parents' care.

"They are not making huge money."

Rotorua farmer Alan Wills said farmers did not need any more tax.

"It's coming at us from all directions already with the compliance costs."

He said people going into any business, including farming, needed a clear run ahead.

"We just don't need the Government helping themselves to our success."

The Tax Working Group cost about $2 million to run.