Greens call for capital gains tax

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The Green Party has called for a capital gains tax to bring the New Zealand dollar under control.

Sunday, October 7th 2012, 12:00AM 1 Comment

by The Landlord

Co-leader Russel Norman said the high dollar had meant a loss of jobs in the export sector.

He said New Zealand's central bank was one of the few not taking drastic steps to control its currency.

He called for the Reserve Bank to be given a broader mandate for a lower official cash rate and new tools for managing asset bubbles, a comprehensive capital gains tax – excluding the family home, and quantitative easing.

Norman said: "A capital gains tax moves much needed capital from speculative investment in property into the productive sector. Lower demand for home mortgage borrowing, partly funded from overseas, will ease upward pressure on the exchange rate.

"A broader mandate for the Reserve Bank will empower them to use the monetary policy tools available to them to manage the economy in a smarter, more sophisticated way addressing the high exchange rate and high unemployment rate along with securing price stability."

He said the Reserve Bank would likely have lowered the official cash rate last month if it had a broader mandate than to maintain price stability. He said a lower official cash rate would reduce upwards pressure on the dollar.

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