lower tax economy<\/a>, especially for older, wealthier people.<\/p>\nAnd that\u2019s why our economy is doing so much better than Australia\u2019s!<\/p>\n
Sorry, to be clear, that is a joke.<\/p>\n
I don\u2019t think Willis was being all that serious either when she unleashed her excellent soundbite and grabbed headlines across the Tasman.<\/p>\n
Willis made a pitch for Aussies (and Aussie-based Kiwis) to come to New Zealand to enjoy our more favourable tax settings. <\/p>\n
She even used the infamous Tourism Australia catchphrase, \u201cWhere the bloody hell are you?\u201d<\/p>\n
That\u2019s the line news radio hosts played to their listeners before bringing me on to explain why New Zealand isn\u2019t quite the Canary Islands yet.<\/p>\n
As much as I\u2019d like to be patriotic about this, there are a few flaws in the pitch.<\/p>\n
\u201cCome and invest in New Zealand. We do not have a capital gains tax. Our inflation rate is lower,\u201d Willis said.<\/p>\n
That\u2019s true. <\/p>\n
Inflation is lower, and so are our interest rates. <\/p>\n
But for ordinary workers, the fact that our unemployment rate is higher and our wages much lower might be a deterrent.<\/p>\n
Older Aussies wishing to avoid property taxes might also want to consider the respective state of our housing markets. <\/p>\n
In making its case The Australian article says: \u201cNew Zealand\u2019s property market has firmly swung in favour of buyers.\u201d<\/p>\n
Yeah, well, that\u2019s quite generous.<\/p>\n
The other way to put it is that our property market has tanked.<\/p>\n
In inflation-adjusted terms Auckland and Wellington house prices are off about 30% since they peaked in late 2021.<\/p>\n
So capital gains haven\u2019t really been much of an issue lately.<\/p>\n
Things look better further south, and perhaps there\u2019s a case for rich Aussies to move to Queenstown.<\/p>\n
That might further elevate the multimillion-dollar housing market there and create a few additional service sector jobs for the young itinerant workers sleeping in their cars.<\/p>\n
Too cynical? Sorry.<\/p>\n
Perhaps it is a good time to get in on our ailing property market, a counter-cyclical buying opportunity.<\/p>\n
Auckland\u2019s fortunes will surely turn in the coming years.<\/p>\n
And unless Labour wins the upcoming election (and doesn\u2019t have to do a deal with NZ First, which killed the CGT in their last coalition), the profits will be tax-free.<\/p>\n
In both Aussie radio interviews, the hosts were shocked by this revelation.<\/p>\n
I did explain the bright-line test, which imposes tax on profits for secondary properties on-sold within two years.<\/p>\n
But they were still incredulous.<\/p>\n
I found myself scrambling to justify New Zealand\u2019s unusual cultural dislike of capital gains tax.<\/p>\n
I\u2019ve invested plenty of column inches arguing the opposite. But when you\u2019re challenged by an Aussie, it\u2019s weird how reactionary you become.<\/p>\n
If they\u2019d had a go at Winston Peters, I\u2019d probably have had something nice to say about him too.<\/p>\n
One of the hosts said surely the lack of CGT means investment dollars are funnelled into property at the expense of more productive investments like listed companies?<\/p>\n
Ah, yeah. I always like to do New Zealand proud, but it was hard to answer that one.<\/p>\n
We don\u2019t need deeper capital markets and a strong dynamic financial industry because… the All Blacks and Sir Peter Jackson… and we invented pavlova<\/p>\n
I struggled to explain our cultural aversion to any form of CGT.<\/p>\n
If I were a conspiracy theorist, then I might have argued that residential property has historically been the primary path to financial independence for working-class New Zealanders.<\/p>\n
And that maintaining this status quo has suited the wealthiest New Zealanders just fine. <\/p>\n
So we\u2019ve ended up with a complicated hybrid opposition to a CGT that crosses traditional class barriers and makes even Labour politicians a bit wary of it.<\/p>\n
I did make it clear that CGT remains a hotly debated topic in New Zealand, at least as far as any kind of tax debate can be.<\/p>\n
I don\u2019t blame Willis for chancing her arm.<\/p>\n
The lower tax narrative doesn\u2019t hurt the Government\u2019s aim of attracting more foreign investment into New Zealand and trying to reverse the flow of Kiwis to Australia.<\/p>\n
We\u2019re already milking our \u201cbolthole from the apocalypse\u201d status in the US and Europe.<\/p>\n
Some New Zealanders will have concerns about the risks to social cohesion that an Australian influx might bring.<\/p>\n
Could it change the style of our meat pies? Are their flat whites slightly stronger? Will we see more cheating in our domestic cricket? <\/p>\n
It\u2019s a lot to absorb.<\/p>\n
But in the Anzac spirit, I reckon we should welcome the Aussie tax refugees.<\/p>\n
Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.<\/p>\n
Catch up on the debates that dominated the week by signing up to our Opinion newsletter<\/a> \u2013 a weekly round-up of our best commentary.<\/p>\n","protected":false},"excerpt":{"rendered":"Finance Minister Nicola Willis is getting a lot more media coverage on this issue than she will when…\n","protected":false},"author":2,"featured_media":442473,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[1443,2840,192,2937,85,1288,225938,40922,13988,10918,17827,27135,20409,37289,111,43,139,425,69,22213,183292,5970,8830,6122,23333,2224,7496,28355,3270,4276,80],"class_list":["post-442472","post","type-post","status-publish","format-standard","has-post-thumbnail","category-new-zealand","tag-about","tag-across","tag-are","tag-aussie","tag-australia","tag-capital","tag-cares","tag-dann","tag-gains","tag-haven","tag-highlight","tag-lack","tag-liam","tag-listers","tag-new-zealand","tag-news","tag-newzealand","tag-now","tag-nz","tag-our","tag-poach","tag-really","tag-rich","tag-rules","tag-suddenly","tag-tasman","tag-tax","tag-trying","tag-we","tag-why","tag-zealand"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/442472","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=442472"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/442472\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/442473"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=442472"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=442472"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=442472"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}