Finance Minister Grant Robertson has suggested people shouldn't get carried away over an interim report on tax reform.

The Tax Working Group is understood to have stopped short of recommending a broad-based capital gains tax in an interim report, but Finance Minister Grant Robertson has played down the report's significance.

The working group chaired by Sir Michael Cullen was tasked with designing a capital gains tax for consideration by the Government, but is believed to have pushed back any firm recommendation until it publishes its final report in February.

Robertson confirmed the Government had received the interim report which he said would be released soon.

But he said the work was "always supposed to be a two-stage process" and commentators were "getting a bit ahead of themselves".

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The working group wanted "more feedback from the public and more feedback from the Government", he said.

National Party finance spokeswoman Amy Adams said it had been proved right that a capital gains tax made "no sense" and was not a magic bullet for housing affordability.

ABIGAIL DOUGHERTY/STUFF Sir Michael Cullen chairs a meeting of the Tax Working Group in Auckland as it finalises its interim report.

The lack of a recommendation in the interim report would not be surprising, she said.

"We have been saying all the way through that a CGT would not achieve what the Government is setting out to achieve," she said.

"It would be very interesting if the Government's own hand-picked tax advisory group was not able to deliver to the Government the one thing that the Government has been suggesting is the panacea to all ills."

It had been widely expected that the Tax Working Group (TWG) would recommend a broad-based capital gains tax on the likes of sharemarket and property investments as the centrepiece of tax reforms on which Labour would fight the next election.

However, doubts began to creep in earlier this year that the Government would ultimately back the plan, amid concerns the new tax would be unpopular and would cause rents to rise without delivering much in the way of extra revenue for at least a decade.

ROSS GIBLIN/STUFF National Party finance spokeswoman Amy Adams said the best way to address "asset inequality" was by growing the supply of houses, rather through tax.

Deferring the matter back to ministers would appear to amount to a recognition that changes to the tax system are too "political" to be outsourced to an expert group.

Paul Drum, chief executive of accounting body CPA Australia, said in a newspaper column that "a close reading of the tea leaves" suggested the "highly important and politicised" issue of the capital gains tax "is probably to be parked for further consultation and input".

Sir Michael Cullen hinted that was on the money, saying he had "not reacted strongly to that comment".

British tax expert Chris Wales, a former adviser to former British prime minister Tony Blair, forecast the TWG could continue to face difficulties making a final recommendation.

ROBERT KITCHIN/STUFF One of the concerns with a broader capital gains tax is that it would make property investment less profitable and so push up rents.

One problem was that there was "no money" in the medium term for any government from introducing a conventional capital gains tax – if it was assumed that house prices and stock markets were close to reaching a plateau.

"The only way to raise any revenues from it would be to tax unrealised gains that have accrued to date. That would be bad policy and suicidal politics."

It is expected that the model for a CGT floated for consideration by the working group would only tax assets that were bought after the new tax came in.

That would mean it would exclude gains on assets such as investment properties that people already owned and which might already have risen in value.

"Without a clear political steer, it will be difficult for the group to make a recommendation even in its final report," Wales forecast.

"It will be a political decision."

TOM PULLAR-STRECKER/STUFF Former PwC tax leader Chris Wales believes the Tax Working Group may struggle to recommend a capital gains tax even in its final report.

Adams said a CGT would be a "complicated and expensive tax" on New Zealanders' savings, investments and businesses.

"That is the last thing I would argue you should be doing when you have got an economy that is already showing signs of slowing down."

Adams appeared to indicate she did not believe there was too much inequality in New Zealand that would be best addressed through the tax system.

"Income inequality has been broadly flat for many decades. When you look at the asset picture, that is more a reflection of the fact that we are at a stage of the property cycle where New Zealanders' biggest asset – the family home – has had a period of tremendous growth fuelled by shortages of supply and low interest rates.

"The way we address that is through increasing the supply of houses," she said.

Adams denied the lack of an interim recommendation would show the TWG was independent.

"I suspect what it is more likely to show is that for now they are kicking it for touch and leaving it for the Government. We will wait and see if it still shows up in the final report."

Robertson said tax was a big discussion. The Government could "shy away from these big issues or face up to them".

TOM PULLAR-STRECKER/STUFF A broad capital gains tax would mean more tax for many "mum and dad" sharemarket investors.

Wales said the "way out for the TWG" was to be "honest and open about the revenue issue and to propose a 'least worst' approach for modernising the system".

"It should give the Government the choice between complex major reform, more limited extensions of the taxation of what would normally be treated as gains elsewhere, and doing nothing."

The TWG has also looked at new environmental taxes, possible changes to GST, and matters such as the index-linking of tax on the likes of bank interest payments.

However, it was warned off looking at specific new "green" taxes in April by officials who cautioned that could cause an overlap with other policy work, and to instead concentrate on principles or a "framework" that could apply.

The TWG is expected to have rejected the idea of adjusting taxation for inflation because of the complexities involved in applying that across the tax system, and has shown no appetite for revising GST.

"Given the constraints around their remit and the Government's expectations, the TWG has, I believe, found itself very much focused on CGT," Wales said.