Keith Melville

My recent Beacon opinion piece about Labour’s flip-flop on the so-called landlord tax break, attracted three responses in the Beacon letters on Wednesday.

Of those replies, one was carping in nature, and one a total mis-representation.

Rob Probst questions my use of words such as “ humiliating, weaponise, vilifying, taunting and hypocritical” in describing events leading to Labour leader Chris Hipkins’ surprise announcement that Labour would retain the coalition’s law reinstating interest deductibility.

Probst asks why I didn’t recognise Labour’s flip-flop (my words) as the right thing to do.

The coalition sure did the right thing to remove that heavy-handed Labour law of 2021 penalising landlords, but you can hardly give Labour plaudits for accepting the change when they spent two-and-a-half years demonising landlords for getting the so-called tax break and the Government for giving it, before announcing the big flip-flop.

Probst challenges my descriptive use of language as designed to excite reader attention.

I can live with that, but each word used was appropriate and an honest use of language in the circumstances.

Furthermore, I want to introduce Probst to another word that might cause even more excitement but would have been equally appropriate in my original letter though not used.

That word is “corruption” and I use it now because Labour corrupted the tax system against the advice of IRD by turning a typical business cost (interest paid on mortgages) into a selective taxable weapon aimed only at residential landlords.

If Probst was truly aggrieved about the misuse of language, he should have plenty to say about the misleading term – landlord tax break.

Let’s be doubly clear about what it really was. It was the removal of a tax penalty and corrupted tax rules.

Restoring the tax system to neutral was reportedly a $2.9 billion cost over four years and that brings me to the other Beacon letter writer I referred to, Dave Stewart, who has often misrepresented landlords and their so-called tax break.

He seems to think that that $2.9 billion was refunded to landlords.

He would be pleased to know that those landlords he vilifies so much were not refunded one cent.

That $2.9 billion (rounded to $3 billion in his letter) was simply an accounting cost of what was going to be lost to the tax system once the neutrality of the system was restored.

Stewart refers to a private discussion we had about a year ago when I agreed that reinstating interest deductibility and replacing it with a capital gains tax would be fair, but he conveniently forgets the qualification I added to my words and that was that the CGT itself would have to be fair.

The narrowly-focused CGT announced by Labour more than a year ago is far from fair, and if imposed as announced it will even tax losses in property values caused by inflation.

I have other CGT criticisms as well but will save them for another day.