Did the PM Just Mislead the Country about the Advice he received about the Wealth Tax?
Yesterday, on the back of polls showing falling support for Labour, the Prime Minister was asked again why he dumped the wealth tax which former Revenue Minister, David Parker, had supported. Radio NZ reports the PM as saying:
"It was based on the advice that we received. We looked at a wealth tax. It was very clear that a wealth tax actually contained huge economic risk for New Zealand. Wealth is ultimately very mobile. If a whole lot of the people who would have been subject to the wealth tax can remove that wealth from New Zealand, actually, our economy would have been in far worse shape. I looked at the evidence, I got the advice and I made the call that a wealth tax wasn't going to be the right way forward for New Zealand."
Is that statement true? Not according to my sources. Former Revenue Minister Parker presented the IRD High Wealth Individuals Research Project to my Law & Economics class at Auckland University the day the report was released.
In response to a student question, David stated that the introduction of a wealth or capital tax in NZ would not lead to a shift of wealth out of this country. He said the reason was that if you looked at how much Kiwis would be subject to similar such taxes abroad, then it would be very similar to what he was proposing.
Hang on. Doesn't that mean the PM's own Revenue Minister had received and given advice to Hipkins that contradicts the PM's line? David could not have been clearer on this point. So I don't believe the PM "received advice" & "looked at evidence" showing his Minister's proposed new tax would lead to a wealth exodus. My belief is based on what his own Minister told me and 97 students at the University on 27 April. By the way, I'm not in favor of these kinds of new taxes, but the truth about the nature of the debate the country has been having about them needs to be told.
Why didn't the PM tell the country the true reason he stopped Parker's proposals - namely they didn't play well with Labour's focus groups and in the party's privately commissioned polling, that Hipkins is desperate to go into the election with headlines like "GST cut on fruit and veges", instead of headlines about how new taxes were about to be introduced, and that he's desperate to carve business votes off National-ACT. The reasons have nothing to do with "evidence" or "advice" that the PM received about capital fleeing the country.