A high-ranking official from the Albanese administration has recommended that New Zealand’s Prime Minister, Christopher Luxon, steer clear of weighing in on Australia’s internal tax discussions. This comes after Luxon described the capital gains tax as a “wrecking ball.”
Workplace Relations Minister Amanda Rishworth expressed this viewpoint during an appearance on Sky News on Sunday, responding to remarks made by Luxon the previous day.
Both Prime Minister Anthony Albanese and Luxon were present in Noosa, Queensland, when the New Zealand leader commented on Australia’s proposed changes to the capital gains tax (CGT). Luxon’s remarks have sparked a flurry of responses amid ongoing discussions about the tax reforms.
The Albanese government, in its recent budget, suggested scaling back CGT concessions, including rethinking the traditional 50 percent discount. These changes are part of a larger effort to boost revenue and adjust the financial system’s balance.
It is worth noting that New Zealand does not implement a comprehensive capital gains tax. Luxon’s comments seem to align with their ongoing internal debate regarding such fiscal policies.
Luxon put his position squarely within New Zealand’s prolonged internal debate.
‘It’s no secret within the New Zealand domestic context there’s been a long-running debate now for over ten years about the merits of introducing a CGT or not,’ Luxon said.
‘We haven’t ever introduced one in the country.’
Amanda Rishworth (pictured) said Luxon should not get ‘involved in domestic issues’
Luxon made clear he was not criticising Australia’s tax policy.
‘We don’t think that’s appropriate for New Zealand and we feel pretty strongly about it,’ Luxon said.
‘You know, we’ve got a recovery underway and we just think a CGT being introduced to New Zealand now would be a wrecking ball through our economy.’
Pressed by Sky News host Andrew Clennell, Rishworth rejected the comparison.
‘Well, we’ve got two different countries with two different tax systems. Let’s be really clear,’ she said.
‘New Zealand has a different tax system to our tax system. Capital gains tax has existed in our country as we’ve been discussing for a very long time.
‘I don’t think you can compare apples with oranges when we’re talking about different tax systems and different countries.’
Asked if Luxon’s remarks were a swipe at the Albanese government, Rishworth said both leaders should avoid interfering in each other’s politics.
Luxon (right) said a capital gains tax in New Zealand would be an economic ‘wrecking ball’
‘Look, I would suggest that neither leaders would seek to get involved in domestic politics,’ she said.
‘And quite frankly, it was a very warm meeting and demonstrates the strong relationship we have with New Zealand, our very close neighbour.
‘But I wouldn’t suggest it was a shot across the bow.’
Clennell argued the government’s CGT changes would increase the tax take.
‘You’re upping that tax. You’re taking the discount off,’ he said.
Rishworth rejected that description.
‘We’re not upping that tax, Andrew,’ she said.
‘What we are doing is changing the way that capital gains is calculated and looking at what is an appropriate tax rate for that. Of course, we are rebalancing the system.’
Rishworth (pictured) defended the government’s changes to the capital gains tax discount
‘Which brings in more revenue. Which is an upping of the tax, Amanda Rishworth,’ Clennell said.
But the minister stood firm, saying the additional revenue will be redirected to workers.
‘It is a rebalancing of the tax system and that extra tax that we’re getting is being redirected to workers,’ Rishworth said.
‘Workers will be better off in this country as a result of these tax changes.’
The government’s changes to the capital gains discount were passed in the House of Representatives on Thursday, and will be debated in the Senate when Parliament returns later in June.
