Ryan Bridge: Hey Labour, NZ is not Australia

Author: Ryan Bridge ,
Publish Date: Mon, 17 Aug 2026, 6:19am

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Hey Labour. NZ is not Australia.

To justify their capital gains tax, they point across the ditch.

"Australia introduced a capital gains tax in 1985, and its economy and incomes have kept growing."

This is true but one does not cause the other. Two things.

1. Australia is not rich because it has a capital gains tax. Australia is rich because it has a larger economy, with greater economies of scale, and mainly, because unlike us, they extract minerals and fossil fuels from the earth for the rest of the world to burn and /or make steel.

Their top export earners are iron ore, oil and gas, coal mining, LNG, and then farming.

Guess where those young people are going when the leave motel city Rotorua? Probingly mining job Labour wouldn't left them have here.

2. This is about how the tax is applied, because Labour NZ's tax is treated very differently.

Let's say you buy a house a rental house today for $1m.

You sell it for $1.5m in ten years.

You've made $500k, right? Wrong. Once you take account of how much inflation has eroded away at the value of them money, in real terms you're worse off.

If you went to spend that $500 in ten years, it would get you fewer goods than it would today.

So, after inflation, your real profit might only be $300k in real terms, but Labour would make you pay 28% on the whole $300k.

Which is, again, what the Aussies do. They give you a 50%discount on the difference between what you bought the house for and sold it, to account for inflation.

They're going harder here, which doesn't seem fair.

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