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Cullen says no ‘great split’ in Tax Working Group

Sir Michael Cullen has poured water on the idea there is a split within the Tax Working Group over proposed capital income taxes.

“I said early on in the piece I did not expect to come out with a single view with unanimous support. I actually think we’ve achieved a greater consensus in this area than I thought was likely,” he said. 

The group, which was formed following the election to design a future tax package, has 10 members, plus Cullen who is the chair. Cullen told Newsroom there was not “some huge great split” in the group.

The Labour Party will take some or all of the group’s recommendations to the 2020 election. Any taxes recommended by the group won’t take effect until after the election. Cullen was speaking at a conference on the Tax Working Group hosted by Victoria University in Wellington. 

He said there was a majority on the group who did support taxation on capital income. 

“A clear majority of the tax working group favours the package of proposals which are approaching finalisation within the tax working group at the present,” Cullen said. 

He said some of the division in the group could be put down to the specific types of capital income taxation being presented. 

“Of those who don’t [support the capital income tax proposals] at least one certainly supports extension of capital income taxation, but would support a somewhat different approach to that which is contained within the majority view,” Cullen said. 

He believed the group’s final report, which will be published in February, will present the range of views, including those of the dissenters. 

“What I’m hoping to do is reflect both minority and majority views within the report as a whole,” Cullen said. 

“Amongst the relatively small minority within the group there’s a difference of views,” he said. 

Finance Minister Grant Robertson has expressed a strong preference for some form of capital income tax. He released a letter with Revenue Minister Stuart Nash following the group’s interim report in September which expressed a strong desire for some form of capital taxation to be included in the group’s final report. 

Opposition finance spokesperson Amy Adams said Cullen’s remarks make it clear the group was designed to recommend a capital gains tax from the start.

“Sir Michael Cullen has clearly worked hard to convince a majority of group members to support the proposed new tax,” Adams said. 

“A minority, he says, continue to oppose such a tax. It’s now clear that this was the real purpose behind the group all along,” she said. 

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