Federated Farmers says right call made on CGT

Federated Farmers economics spokesperson Andrew Hoggard. Photo / Supplied

Farmers say the decision not to proceed with a Capital Gains Tax is heartening evidence that the coalition government is willing to put well-reasoned and practical considerations in front of ideology.

Federated Farmers economics spokesperson Andrew Hoggard said it was clear the coalition partners had listened to widespread concerns a Capital Gains Tax had too many downsides, "including massive administration costs and the potential to put the handbrake on the progress of small and medium businesses vital to our economy."

"It seems to us that New Zealand First has been pivotal in this decision, and we appreciate their pragmatism.

"The Prime Minister spoke this afternoon about new measures to tackle land banking and land speculation, an approach that has a much better chance of tackling our housing affordability issues than a CGT."

Hoggard said Federated Farmers was pleased the Government was committing to looking at the compliance cost reduction ideas mentioned in the Tax Working Group's report.

"There were a number of these that are worth looking at, including increasing various thresholds (e.g., for provisional tax) and simplifying depreciation and Fringe Benefit Tax, and removing resident withholding tax on close company-related party interest and dividend payments," said Hoggard.

"We're also pleased with the assurance that there will be no resource rental for water or fertiliser tax - at least in this term of Government."