Phil Goff is taking a week to test the waters before confirming the Labour Party's tax policy. That, in itself, speaks volumes about his trepidation over the planned centrepiece, a capital gains tax on investment properties.

Customarily, the country's politicians have perceived such a tax as electoral poison. It would, therefore, be a courageous move by Mr Goff to press ahead. A strong public backlash over the next few days could well occasion jitters and cause him to rein in the policy.

That should not happen, however. Not only would a capital gains tax be hugely beneficial to the economy but the time for its introduction is right. Mr Goff should demonstrate a resolve that recognises as much.

A capital gains tax would go a long way towards correcting the crippling imbalance of investment in the economy. Too much of people's savings is directed towards property, leaving too little available for other, more productive capital investments.

This has increased the country's demand for foreign capital, which, in turn, has kept the dollar high, making life difficult for exporters. Given that a tax system favouring investing in rental property has created this distortion, it is perfectly sensible to use it to realign investment.

Most other comparable countries have long since introduced a capital gains tax to tackle the weight of such unproductive capital at its root.

The absence of that response here has not gone unnoticed. This year, an OECD review committee numbered it among steps that would address the country's savings performance.

Also this year, the Government-appointed Savings Working Group, while instructed to stay away from a capital gains tax, made it plain that
recent attempts to discourage property investment had been inadequate.

And with the problem unsolved, another damaging housing boom is somewhere around the corner.

Opposition to a capital gains tax is founded partly on a view that it would be complex. The Prime Minister says it would be "hideously complicated" and involve people spending their lives with accountants.

Yet the likes of Australia have incorporated it into their tax systems without a huge amount of trouble. John Key's further claim that such a tax had been rejected by the Tax Working Group would be stronger if the Government had actually embraced all the group's recommendations to address overinvestment in rental property, not least a land tax, which would be equally unpalatable politically.

Other claims, such as Mr Key's comment that it would "crush everyday New Zealanders", amount to predictable politicking.

Labour is sure to tailor any policy to those who own one or more investment properties. It would not apply to the family home, would kick in only at a relatively high profit threshold, and would not apply to property forced to be sold by death.

While such strictures would be required for public acceptance, they may also mean the tax may not raise the $3.8 billion a year estimated in papers provided to the Tax Working Group.

The take would also drop if it was brought in at a time when no one was making sizeable capital gains on their investment property. That, however, represents a good reason for its introduction during a period like this.

Opposition would be dampened by the diminishing of impact. The message, however, would still get through to those who previously could not see past property investment.

Two years ago, Mr Goff offered Mr Key the opportunity of a bipartisan approach to a capital gains tax. It was rejected. The Labour leader will, therefore, have to shoulder the burden himself. This he should do in the interests of the country. It could even be that the electorate is now open to reason.