Australian Minister Delivers Stern Response to New Zealand Prime Minister’s ‘Wrecking Ball’ Capital Gains Tax Comment

A high-ranking member of Anthony Albanese’s cabinet has advised New Zealand’s Prime Minister, Christopher Luxon, to refrain from getting involved in Australia’s internal taxation discussions after Luxon criticized the proposed capital gains tax, calling it a “wrecking ball.”

Speaking on Sky News this past Sunday, Workplace Relations Minister Amanda Rishworth responded to Luxon’s comments, which he made the day before.

Both Prime Minister Albanese and Luxon were in Noosa, Queensland, when Luxon expressed his views on Australia’s planned changes to the capital gains tax (CGT).

The Albanese administration’s recent budget proposal includes scaling back CGT concessions, aiming to revise the longstanding 50 percent discount. This move is part of a broader strategy to boost revenue and “rebalance” the tax system.

It’s worth noting that New Zealand does not have a comprehensive capital gains tax in place.

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.