Recommended changes to New Zealand's tax system would have a "big impact on mum and dad investors and business", says 1 NEWS political editor Jessica Mutch McKay.
A comprehensive capital gains tax has been recommended by the Government's Tax Working Group, which estimates the $8 billion raised over five years could go towards changing the bottom tax rate and reducing tax on KiwiSaver for low- and middle-income earners.
"That would include investments, property, shares and business assets, but it wouldn't include things like the family home, cars or art.
Mutch McKay said the capital gains tax "would not make much money at the beginning, but after five years it would bring in up to $8 billion".
"That gives the Government a pot of money to play with. The recommendations are they adjust the lowest tax rate and that would give everyone a tax cut."
She said the aspects the Government would need to consider were that a comprehensive capital gains tax would have a "big impact on 'mum and dad' investors, on businesses and may cause people to hold back on selling their assets "because they don't want to pay tax".
Mutch McKay said Finance Minister Grant Robertson would be looking at the recommendations for consideration.
"The biggest problem is that he has to get his coalition partners NZ First on board. That's going to be tough."
The Government is set to announce its response to the report in April. "There'll be a lot of tense conversations between now and then."
Any changes will not come into force until 2021, after the election.
"That means that the Government will be judged on this capital gains tax."
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