Is NZ First about to make a capital gain?

Has NZ First scored a big win out of the forthcoming Capital Gains Tax proposal?

That’s a question that hangs in the wind after a cryptic remark by Shane Jones in a TV interview over the weekend.

The exchange comes as the deadline – the end of April – for the government to release its response to the Tax Working Group report draws near.

There are multiple suggestions that the matter has already been discussed at Cabinet and presumably, a position agreed on.

But yesterday the Prime Minister was still teasing the date when the response would be delivered.

“We are sticking to our plan for the information and final decision to be released in April,” she told her weekly post-Cabinet press conference.

That release is highly unlikely this week which leaves only five working days after Easter before the end of April.

What the government must be hoping is that the momentum in support it has which was revealed in the One News Colmar Brunton poll last night will continue to negate any support backlash it gets over the Capital Gains Tax.  (Labour was up three per cent to 48% and National down two per cent to 40%) 

But it is obvious the Government is nervous about the political implications of the tax.

When appearing on Newshub’s “The Nation” on Saturday  Jones was asked about the capital gains tax.

His reply was uncharacteristically careful.

“There are various ways that I could be sacked,” he said.

“One of them that will definitely get me sacked by the end of this programme is if I offer any view whatsoever in terms of what lies exclusively in the province of my leader and Prime Minister.”

But asked whether farmers and regional businesses would not be stung by a capital gains tax he said: “Well, in the near future, all I would say is that to the folk who have dirty boots and hard-working calloused hands, watch this space.”

Federated Farmers have also raised a host of technical questions about how the tax might apply and pointed out the difficulties of defining what is a family home on a farm or lifestyle block.

And NZ First MP Mark Patterson also said NZ First wanted family farms protected from a capital gains tax.

Peters emphasised the inter-generational dimension to farm ownership.

Speaking on “The Country” in February NZ First Leader Winston Peters said, “I can’t imagine any government anywhere in the world would apply a capital gains tax to the farming community.”

Privately NZ First MPs believe that they have to be seen to be at least moderating, if not opposing, the capital gains tax if they are to maintain their fragile hold on their position in Parliament.

Last night’s One News Colmar Brunton poll had them up one per cent to four per cent after their fall to 3.3 per cent in February.

That at least puts the five per cent threshold within grasp.

A survey carried out by the Wellington Regional Chambers of Commerce, and Business Central suggests that NZ First may have identified a key pressure point in the capital gains debate.

 Businesses from New Plymouth and Gisborne in the north to Nelson in the south were asked if they supported the Tax Working Group’s capital gains tax (CGT) as proposed, if it would improve or worsen the business environment for their organisation, and if they would support the proposed tax more if it applied to residential property investments only.

The questions were part of the March quarterly business confidence survey sent to Wellington Regional Chambers of Commerce and Business Central members across central New Zealand in March.

The survey received 675 responses.

An overwhelming net 60.7 per cent opposed the CGT and just 18.6 per cent in favour.

Forty-six per cent said it worsen the environment for their business, and 5.6 per cent said it wouldn’t.

Perhaps surprisingly, 53.3 per cent opposed a CGT even if it applied only to residential property investments and just 14.8 per cent were in favour.

Chamber and Business Central Chief Executive John Milford said business in the region was clearly against the introduction of a CGT.

“The key word they used in the survey was ‘dis-incentivise’ – our members believe a CGT would dis-incentivise owners from growing their businesses, or even from starting new ventures,” he said.

Many of the provincial businesses surveyed would be precisely the type of small owner-operated enterprises that NZ First typically targets for votes.

That is why NZ First MPs believe the tax is a make or break issue for the party.