The release the Tax Working Group's recommendations prompted a rapid flurry of responses from interest groups railing against the proposed capital gains tax.

Business NZ, The Employers and Manufacturers Association, the Canterbury Employers Chamber of Commerce and the Property Investors Federation were just some of the organisations to fire out releases before the ink had even dried on freshly printed copies of the report.

These carefully crafted responses quickly made their way into headlines, skewing the debate sharply in favour of those opposed to a capital gains tax.


In the initial rush for angles and opinions, views in support of the capital gains tax proved difficult to find amid the roaring chorus of "no".

The lobby groups had ample time to prepare for something that had been strongly hinted at in the preceding months – and wasted no time in striking when those hints came to fruition.

Massey University public relations and crisis management specialist Dr Chris Galloway says this strategy has played an integral role in setting the tone for anything related to capital gains tax.

"The one who describes the crisis at the beginning often goes on to frame the subsequent debate," Galloway told the Herald.

"I think the Government is in danger of losing the debate, if they haven't already, because they haven't come out very clearly at the beginning to frame the debate themselves.

"They seem to have been swamped by the naysayers."

Deep wallet, big mouth

Galloway says that lobbying is a standard part of democracy, with everyone from small community groups to well-oiled corporate machines pushing causes they support.

The problem, however, is that the share of voice isn't always equal.


"A problem with public relations more generally is that the people who can afford to pay for its services tend to be the business elite," the academic says.

"Your average community group might use PR techniques but doesn't have the money to pay for expert advice. The danger of it is that the people with the deepest pockets get the most say."

As a corollary, this creates the impression that this group is far bigger than it actually might be, and that its interests are more influential than they really are.

Politicians, of course, are aware of this risk and ideally they should act with caution when offered highly partisan views from individuals with vested interests in any matter.

The idea should be that they can act with discernment, taking into account a broad range of views before making a decision. And this works to some degree. That is, until the position of a well-funded partisan group is readily adopted by a growing portion of the voting public.

Facts aren't everything

Although some of the views on capital gains tax from some lobby groups have tended towards the hyperbolic, Galloway says the combined effort has still been effective at pulling public opinion on its side. This point is important because people vote in terms of views, which don't always come from a rational place.

"We often think that reputation is built on carefully considered rational evaluations of people or organisations, but in reality it's often based on an emotional response, which we later justify with our thinking faculties," Galloway says.

"When it comes to people evaluating the Government's performance, it's not just a matter of people sitting down and considering whether Jacinda Ardern has delivered on all of her promises. It's an emotional response. And the emotion often trumps rationality.

"So you may get many people looking at this debate and going, 'what a mess'. And that 'what a mess' sentiment may well, in the end, trump people's more considered evaluations of what's going on."

That's something the lobby groups understood well, sharing numerous ways in which the capital gains tax would impact ordinary Kiwis.

National Party leader Simon Bridges is also taking advantage of this, pairing his criticism of the capital gains tax with the emotively charged line "That's not the Kiwi way".

The National Party is further capitalising on the negative sentiment, launching an online campaign calling on those who oppose the capital gains tax to join them.

"The Government needs to remind itself that it's not just a matter of giving people the facts as they see them, it's a matter of also understanding the feelings and emotions people also have," says Galloway.

Too little, too late?

Asked what the Government could do to win back favour, Galloway warns that public opinion is difficult to sway once it's been established in another camp.

"It's important that the Government acts quickly now to get a better handle on the narrative," he says when asked if it's too late to do anything.

Pointing to comments made by Finance Minister Grant Robertson earlier this week, Galloway says the Government should drive home the point that the Tax Working Group has only delivered recommendations and that nothing is set in stone.

At the very least, this could help to alleviate some of the sense of impending doom surrounding the capital gains tax.

Galloway adds that the Government should also push the concept of fairness harder whenever it can, because of the broad appeal this has in New Zealand.

"The Government seems generally concerned about greater fairness in the tax system. And fairness is something that most people would sign up to," he says.

The challenge now is digging that concept of fairness from under this giant mess.