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Capital gains tax. For me, I've always felt like it's more of a when, not an if. But again it's topical and both political parties, business lea, they're speaking about it. What's your view on capital gains tax?
Yeah, I expect it will be introduced at some stage in New Zealand. It's a question of what will be the context of the debate, and if the debate for introducing it is revolving around envy and not wanting people to make a capital gain from property and a belief that, oh, if people don't invest in property, they're going to invest in other productive activities. I don't know if it gets
across the line from my point of view. To get it across the line, it has to be in the context of the country needs to generate more tax revenue in the future because of the aging population, the increased demands on the health system, for instance, just to modernize what's already sitting out there, we do need to raise raw more revenue. New Zealand has already highly depended upon income tax and GST rate is already fifteen percent. Put it in that context and I can see myself probably
voting in favor of it coming in. But as long as it is couched in terms of some people have made money and we don't think they should have made that much money, I would struggle then, I think too to go and support it. It has to be part of a broader fiscal debate. But it's going to come, but I think it's impossible to predict what parliamentary term it's going to appear.
I'll be if someone can nail that story of you know, it'll help me more growth over time and stuff. I think that would be amazing as well. So for our listeners, what should they as investors be thinking or bearing in mind over the next six to twelve months.
Yeah, expect a lot of uncertainty out there. We're at a turning point in a number of cycles. And my experience of having been in this business back in New Zealand since nineteen eighty seven is that we're volatilely kind of me. We get hit by shops all the time, domestic ones and offshore, and when cycles turn, sometimes they don't keep going in the direction that you expect. This happened a year ago the housing market was picking up
quite strongly. Prices on average in New Zealand increased zero point nine percent a month for a five month period July through to November, and then they started falling away. It was a false start. I don't think it's a false start this time around in terms of the residential
property market picking up. But there are a number of things out there that are going to occupy people's minds and so obviously keep an eye on what's happening in the Middle East and the potential for greater discord over there that may cause an impact in the oil market. It hasn't so far, but that is always a risk
that's sitting out there. We've got the American presidential election in about a month's time coming along, and if mister Trump gets back in, then we're looking at higher tariffs for the thirteen percent of New Zealand exports that go to the United States, and then other countries may be looking at putting tariffs in place as well. So that's a risk for New Zealand because we're vulnerable to these things that we need access overseas. Keep an eye on
the Chinese economy. At its peak three years ago, thirty three percent of our export receipts came from China, including Hong Kong. Now we're down to twenty seven point three percent and falling away. China's economic outlook is not particularly good, and that means still low demand for forestry products and it's going to be suppressing prices for the likes of red meat, and i'd suggest also a bit on the dairy product side as well, So keep an eye on
that one. And outside of that, it's simply the usual things. At some stage we're going to give another decent earthquake, a big earthquake. Unfortunately in New Zealand, I don't tend to buy into there's another pandemic just around the corner, one in every seventy years in terms of you know, COVID et cetera. Maybe that's so that is more my
underlying assumption with that regard. But people need to remember diversification in your portfolio and watch for over extrapolation of cycles once they start, because I can assure you from three and a half or so decades in this business there isn't a tendency to over extrapolate the up and the down. Things move in cycles, and watch out you don't get overly optimistic or pessimistic. The other way around. Investing involves the risk you might lose the money you
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