Political parties need to bite the bullet on capital gains taxes, the National Distribution Union said today, as the new Productivity Commission gears up to review housing affordability.
Finance Minister Bill English has today announced the Productivity Commission's first two inquiries, one of which is housing affordability.
NDU General Secretary Robert Reid said the country needed a frank discussion on the implementation of a capital gains tax.
"There is something fundamentally wrong with a housing market that is structured to deliver untaxed capital gains to those who have capital, at the same time as denying the dream of home ownership to the upcoming generation," he said.
"There are many options available to make housing more affordable both for renters and home owners, including an enhanced state housing programme, greater facilitation of housing intensification and a return to a shared equity programme, not to mention lifting wages."
"But any serious discussion on housing affordability must include a debate on a capital gains tax on all properties except the family home."
"Although the impact of a capital gains tax is likely to be more in the medium to long term, as investors redirect their capital into more productive assets, the NDU still believes this move is a necessary one."
"Other countries have faced up to this problem. And despite frequent comments from politicians, introducing a capital gains tax is not always an unpopular move.
"It's time New Zealand bites this particular policy bullet as well," Robert Reid said.
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