Photo / Herald on Sunday.
The kerfuffle over cabinet ministers owning rental properties in Wellington and then renting them out to colleagues at the taxpayers expense while also claiming housing allowances is entertaining in a 'gotcha' sort of way. However, the feigned outrage from the media (how dare a cabinet minister earn so much!)
is missing the point.
I'm much more concerned about the fact our cabinet ministers and opposition leaders are all such rampant landlords. These expenses revelations have uncovered an uncomfortable truth about New Zealand's ruling classes. They're all just as cynical as the rest of us. They're using tax laws that give a massive break to rental property ownership to minimise their tax payments.
How on earth can we expect the government to rationally debate the need for a capital gains or land tax when they're just as ruthlessly exploiting the tax laws to reduce their taxes. And they're in charge of collecting taxes!
The biggest culprit is Housing Minister Phil Heatley. Think about it. He is the minister responsible for housing and he believes the path to greatness is being a landlord. We have a vastly over valued property stock because of this sort of debt-fueled, tax-driven property fetish. Why would he ever want to stop it?
You have to wonder if the government will ever be serious about reforming our tax structure to rebalance our economy away from property investment and towards exporting.
This should be no surprise. We at interest.co.nz looked at how many parliamentarians had family trusts before the 2008 election. We found here that over half of the then parliamentarians had family and other trusts.
"Both then Prime Minister Helen Clark and Opposition Leader John Key used family trusts, while Clark also owns 5 houses, including at least one investment property. Key owns commercial property directly and also has shares in a property firm. National MPs are heavier users of trusts than Labour MPs, but both are significant investors in residential property."
What's your view?
Should MPs give up being landlords before they make decisions about our tax laws?
Bernard Hickey
Photo / Herald on Sunday
