The appointment of former Labour finance minister Sir Michael Cullen as chairman of the Government's tax working group means a preordained outcome on the introduction of a capital gains tax.
Dr Cullen was Labour's previous finance minister and one of the key coalition negotiators for Labour after the election.
Tax experts spoken to by the Otago Daily Times claimed the Government was being disingenuous in its approach to property speculation when it claimed tax was not being paid already on property sales.
Finance Minister Grant Robertson said yesterday the Government wanted to address the issue where property speculators had not paid tax on their income from selling houses at a profit, when salary and wage earners' incomes were captured.
However, if a person buys a property with the specific aim of selling it for profit, tax will be paid.
If a non-occupier owner buys the house with a long-term period in mind, and they sell within three years, they have to convince Inland Revenue circumstances have genuinely changed.
People buying a house purely to capture gains in a rising market pay tax on the profit.
The excuse for the introduction of a capital gains tax to counter property speculation has much wider implications for farmers and business owners.
Farmers building up a $10millon asset and wanting to pass it on to their children will be caught by a CGT. And business owners building up their business with a view to selling it for retirement will find they have less to retire on once the CGT is applied.
National Party finance spokesman Steven Joyce said the working group announcement looked like an 18-month long rubber-stamp exercise for CGT.
''Its terms of reference is written so it will propose one significant thing at the end of it - a capital gains tax.''
Nothing would come out of the group Mr Robertson did not want and all he wanted was a CGT, Mr Joyce said.
Mr Robertson and Revenue Minister Stuart Nash announced the terms of reference for the group yesterday.
The group will come up with recommendations by February 2019 which the Government will then use to set its policy direction for the next election.
Mr Robertson said he was not making a grab for cash.
Reforms could be fiscally neutral and he had an open mind on if a CGT would be necessary.
Trade unions had mixed reactions to the announcement.
The PSA said the narrow scope of the working group was a disappointment to unions and working people.
The Council of Trade Unions welcomed the opportunity to engage with the Government.
CTU president Richard Wagstaff said the announcement would start talks on whether those who had benefited from the hard work of New Zealanders were doing their fair share.
Working people were the biggest contributors to public services like schools, hospitals and public transport.
''It's vital the Government actively seeks their views on whether New Zealand's current taxation arrangements are fit for the purpose of providing quality, sustainable public services.''
Prime Minister Jacinda Ardern ruled out the introduction of a CGT during the election campaign but Labour intended extending the bright-line test from two years to five.
The test makes gains on the sale of residential property sold by non-owner occupier within two years of purchase taxable.
The working group is expected to be made up of eight people, including Sir Michael.
There will be tax experts and Mr Robertson also wants input from business, working people and Maori enterprise.
The rest of the group will be announced before Christmas.
Things the group has been told not to look at include increasing income tax rates or the rate of GST, inheritance tax, a tax on the family home, or the adequacy of the personal tax system and its interaction with the transfer system.
It has been directed to look at technical matters already under review such as international tax reform targeting multinational profit shifting.
