Support grows for capital gains tax

Labour Party leader Phil Goff. Photo / Geoff Bowker

The prospect of a capital gains tax is finding significant support, proving more popular than the Labour Party itself which is pushing the tax.

Labour last week revealed details of its "tax switch" package which would introduce a capital gains tax, increase the top tax rate, create a tax-free zone for income below $5000 and remove GST from fresh fruit and vegetables.

A TVNZ Colmar Brunton poll conducted before the policy launch but reported last night found 43 per cent of those asked supported a capital gains tax and 49 per cent were opposed.

In a shocker from the same poll but reported on Sunday, Labour itself slumped to a 10-year low of 27 per cent support, down from 34 per cent in May.

But leader Phil Goff brushed aside the poll's grim message.

"I'm confident that on the day we can win. I don't take this as a judgment on the capital gains tax, it's too early on in the piece."

He was confident Labour's tax package was winning support.

"When you explain it to people, whether they be focus groups or out at public meetings, and people actually understand what's in the package, it's been a very attractive package for people. They see it benefiting them overwhelmingly, they see it as fair and they see it as good for the economy, and we don't have to sell our assets."

Mr Goff said yesterday's "pretty frightening" inflation number underlined the importance of Labour's policies.

"If you look at the basic items that families depend on like food and groceries, fruit and vegetables, this is putting huge pressure on families. That's why our package, which puts money back into the pockets of low and middle income earners, is so important."

Meanwhile, Labour's finance spokesman and architect of the tax package, David Cunliffe, fared somewhat better than his party in the poll.

While more of those asked - 49 per cent - favoured Finance Minister Bill English as the more competent finance minister, Mr Cunliffe scored a respectable 29 per cent.

Yesterday, Mr Goff and Mr Cunliffe were working to bat away National's attack on the credibility of the numbers supporting Labour's package.

Associate Finance Minister Stephen Joyce said the package would cost the Crown $7.5 billion over the next 13 years rather than raise an extra $7.7 billion and would result in an extra $18.5 billion in debt through increased interest costs on borrowing that would be needed.

Mr Cunliffe said Mr Joyce had made a number of mistakes in his analysis.

He also said the growth forecasts underpinning expectations of what the capital gains tax would raise were conservative.

BACKING TESTED

Do you support a capital gains tax?

No 49%
Yes 43%

Which party is the most competent manager of the economy?

National 53%
Labour 24%
Greens 2%
Act 1%

Source: TVNZ Colmar Brunton poll of 1000 voters with a margin of error of plus or minus 3.1 per cent.