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- Date published:
9:41 am, July 20th, 2025 - 39 comments
Categories: economy, Economy, greens, labour, poverty, tax -
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Cowritten with Bearded Git
With less than 18 months to go to the election, Labour doesn’t yet have a tax policy. The Greens do. Tax policy done badly will almost certainly stop Labour and the Greens changing this government. But they have to deal with it.
Labour leader Chris Hipkins said in March this year that too much investment was going into property rather than “productive businesses that create jobs,” but didn’t elaborate further.
When asked directly if the party would be campaigning on a capital gains tax, Hipkins said: “We’ll campaign on tax reform … now, the exact nature of that, it’s not just a simple issue of this one tax or that one tax.”
Hipkins’ election 2023 position was that “I’m confirming today that under a government I lead there will be no wealth or capital gains tax after the election. End of story.”
So, we are halfway through 2025 and there’s no tax position from Labour, although to be fair parties often only release tax policies until the start of the election campaign.
Thomas Piketty concluded in his book Capital in the Twenty First Century:
At the heart of every major political upheaval lies a fiscal revolution……The right solution is a progressive annual tax on capital. This will make it possible to avoid an endless inegalitarian spiral while preserving competition and incentives for new instances of primitive accumulation.”
Consistent with this approach in May this year the Green Party set out its tax position.
This is how the Greens propose to raise the money .
Wealth Tax
It will introduce new taxes that will raise on average $22 billion dollars annually-$18 billion of this comes from a 2.5% wealth tax on citizens with more than $2 million (individual) 0r $4 million (couple) in assets excluding the family home. Under the plan 3.7 million less-wealthy citizens will receive significant tax reductions.
All citizens will also get a properly funded public health service where all operations are able to be undertaken in a timely manner in public hospitals, free GP visits, free prescriptions and free dental care. Early childhood education will also be free.
There will also be an income guarantee of at least $395 a week.
This gets to the point that New Zealand’s 311 wealthiest families on average get taxed on an effective rate of 9.5%. That’s less than the lowest tax payers earning less than $14,000 who get taxed at 10.5%.
Trust Tax
Greens would tax assets held in trusts by 1.5% per year.
Inheritance Tax
There would be a 33% tax on gift and inheritances received over a person’s lifetime above $1m.
Income Tax
People earning over $120,000 would have income over that amount taxed at 39%.
People earning over 180,000 would have income over that amount taxed at 45%.
The first $10,000 of a person’s tax income would be tax free.
On income tax the Green proposal would align closely with the Australian income tax levels. Australia doesn’t tax income until you get to earning $18,000. Australia taxes 45% for income over $180,000.
Our current top tax bracket is 39% for income over $180,000 as at 2021.
Company Tax
The Greens would raise company tax would be raised to 33%
Private Jet Tax
The Greens would tax all passengers who come in by private jet at $5,000 each.
Investment Property Bright Line Test
If you sell an investment property inside 10 years of purchase, you will be taxed on the sale.
Interest rate deductibility for investment properties would go.
Capital Flight Risk
When it the above tax policy was launched Swarbrick wasn’t great on whether the above tax policy would result in capital flight out of New Zealand.
I would argue that this risk is overblown since New Zealand’s wealth is very, very sticky: most our wealth is tied up in property both residential and commercial staying here, almost all Maori iwi wealth is tied up here and can’t shift, our fisheries wealth is tied up here in ports factories and quota, our power company wealth is mostly tied up here, the rest of our entire oligopolistic system from supermarkets to utilities to retail chains are bricks-and-mortar stuck here, our farms can’t be shifted, our mines can’t go anywhere, and indeed much of our other remaining wealth such as it is can’t be moved either.
The risk of capital flight of wealth will be of course noisy for the few who do leave – and the multimillionaire houses that sell will be snapped up by fresh incoming capital from Australians and Californians and Singaporeans as they already are.
Kiwi wealth is mostly flightless.
Agreement between the two?
Of the Green list of new taxes, there ought to be agreement with Labour on taxing investment property, since that has already been Labour policy previously.
One can also imagine Green+Labour agreement in increasing the annual tax paid by trusts which hold wealth.
But the state would lose about $2 billion a year making the first $10,000 of income tax free.
Max Rashbrook has set out some of Labour’s options here, including Do Nothing.
National and Act know that the longer Labour stay silent on their policy and distance themselves from the Greens, the more likely that they can make the public anxious about Labour as “economic managers” (I know, I know) and return National to government for a second term.
Labour and the Greens could go to the elections united on tax; there’s plenty of common ground to do so. They should talk now.
Colour me Interested : )
And much to be interested in the Post !
Especially re….
Absolutely, as unfortunately, IMO this NACT1 scurvy crew (even with, and notwithstanding, the fucking dropkick loose cannons crashing through their rotten hull) might yet get to the election shoreline first.
That scenario would be, not quite the end of NZ, but well within reach….
I like the tax policy of the greens, it'll take very staunch defence and crystal clear massaging from the landslide of sludge that'll come there way from the right.
It might pay to point out that it's going to take money and time to fix our straining health system.
There remains a pathological attachment by certain Labour tops to the NZ neo liberal state and orthodoxy set in motion by Rogernomics and Ruthanasia in the 80s/90s. World Bank and IMF and many academics have long repudiated “trickle down”–it does not happen in a meaningful sense for working class people. Never mind some imagined capital flight–capital export to offshore owners as per the Australian Banks bloated profits is the real issue. Ad and ’Git make a good case about capital flight re much NZ economic activity not being easily transportable–sure ownership can change–and those entrepreneur types that want to go are welcome to piss off.
The Reserve Bank Act and State Sector Act roll over each election regardless of the new Govt. So in 2026 a compatible tax approach from Labour, Greens and TPM is most desirable as a start to finally rolling back the neo liberal NZ state.
Time waits for no one, and 2026 will see “Boomers” no longer supreme in voter numbers–can the new gens and alienated and excluded voters be tempted to participate? it will be a key factor and taxing the already well off should be a good look to attract their support.
As well as “tax the rich”, returning power generation and supply to full public ownership would be another popular policy with practical benefit to those enduring winter under blankets and hot water bottles. All this will be very scary for Chris Hipkins and Fraser House, but a circuit breaker has to be found, this country has been relentlessly vandalised since Baldrick, Vampire Peters, and Atlas Dave have been in Govt. and it cannot take much more.
Great points Tiger. I have suggested Labour set up an SOE "Kiwi Solar" that would invest in solar, both rooftop and industrial farms (both with battery storage), possibly in joint ventures. This will cause the 4 gentailers to lose control of the market.
Solar is taking off-my post the other day note we now have over 600 MW of rooftop solar and this is going up rapidly.
We need to reinvent the State idea of support dignity fairness wellbeing and collaboration to achieve goals.
State insurance
State Energy
State Housing
State Hospitals
State Schools
State Infrastructure
etc for the people by the people based on improving lives as a goal..
Fair taxes is a strong underpinning of that, otherwise you get bad actors cornering the “money making” part of the system, as in now!!
Aoteoroa Kiwi Insurance backed by the State to ensure help in disasters.
This would ensure no area was left like the red zone, unproductive and yet still a burden.
Climate change is real and we need to collaborate.
The state isn't making enough money to sustain what its got going out, with Treasury deficits forecast out beyond 2030.
We also have very little left to sell off to bring public debt down.
Agree the state needs a refreshed narrative. Not sure the country is in the mood for it. Love to be wrong.
Iwi wealth might well be tied up here but taxing it would prove very difficult.
https://www.taxpolicy.ird.govt.nz/-/media/project/ir/tp/publications/2020/2020-tax-working-group/submissions/twg-subm-3983148-waikato-tainui-pdf.pdf?sc_lang=en&modified=20200910075616&hash=021D88F77183BF805048BC7867DDAB7D
"erode the value of Waikato-Tainui’s Tiriti settlements with the Crown,
and/or risk creating new breaches of our rights under Te Tiriti, in particular
in relation to our rangatiratanga over our whenua and other taonga. As
noted above, the manner in which we hold our whenua and other taonga,
while fitting within the English law construct of charity, can also be
compared with the manner in which the Crown and tax-exempt public
authorities hold core Crown assets such as the conservation estate"
Yeah everyone wants a tax exemption because they're special.
Indeed but it does pretty much prove the point the left uniting on tax is about impossible. Loom at what happened with the Greens re the Kermadecs.
How does it prove any point? Seems more like you are white -anting…..
Not at all, given the submission I linked too what chance of TPM supporting a Tax policy that captured Iwi interests?
What chance indeed ? Considering your negativity regarding
IMO pretty much has white-ant written all over it….
Labour put out a far superior capital gains/wealth tax than the offering from The Greens.
This AI blurble has it
‘The New Zealand Labour Party has recently been revisiting its tax policy, including the possibility of a wealth tax or a capital income tax. This comes after the party previously ruled out such taxes during the 2023 election campaign. While the specifics of the proposed tax are still under discussion, past proposals included an annual levy on assets exceeding a certain threshold, such as $10 million for couples. The debate around a wealth tax is ongoing, with proponents arguing it could address wealth inequality and fund public services, while opponents raise concerns about potential economic impacts and administrative challenges.
Key Aspects of the Discussion:
This tax, as proposed by former revenue minister David Parker, would target high earners whose incomes are not effectively captured by the current tax system.
Previous proposals have suggested thresholds like $10 million for couples, with a potential annual levy of 1.5%.
Some polls suggest public support for a wealth tax, particularly if it's used to fund initiatives like free dental care or to lift families out of poverty.
Opponents raise concerns about potential negative impacts on investment, economic growth, and the potential for wealthy individuals to move assets offshore to avoid the tax.
Experts suggest exploring options like capital gains taxes and inheritance taxes as alternatives to a broad wealth tax, as these are common in other OECD countries and may have lower economic costs.
A wealth tax, particularly an annual one, could be complex to administer and could lead to unintended consequences.
Arguments for a Wealth Tax:
A wealth tax could help reduce the growing gap between the rich and the poor.
The revenue generated could be used to fund essential services like healthcare, education, and infrastructure.
Some argue that it's fairer for the wealthiest individuals to contribute more to society through taxation.
Arguments Against a Wealth Tax:
The debate over a wealth tax in New Zealand is complex, with valid arguments on both sides. The Labour Party will need to carefully weigh the potential benefits and drawbacks before deciding whether to pursue this policy further. ‘
and
https://www.rnz.co.nz/news/political/535446/labour-lays-groundwork-for-election-year-capital-gains-tax
and then this interesting paper from The Treasury
https://www.treasury.govt.nz/sites/default/files/2023-07/b23-tax-4796987.pdf
So good on The Greens for getting stuff out. We are still some time away from the election. Hopefully in that time Labour can fine tune its tax policies that incl wealth/capital gains – to me, in their form last year, they are better than The Greens offering.
The Greens had a thought of taxing so-called wealthy people as you go. Clearly they have never heard of the phrase 'asset rich, cash poor'. Many superannuitants just by the operation of valuations, length of time ie their age are in this category. On the basic superannuation and there is no more chance of paying an ongoing tax than flying to the moon.
My belief is that taxes such as on property are better, ie find more acceptance and less avoidance, if they are just part of what happens in life ie logical waypoints. What happens in life is that properties are bought and people die.
So sales tax on the value in an Agreement for Sale and purchase. We used to have stamp duty, that came out in the 'wash' as it were with the adjustments on settlement to cover pre-paid rates etc.
So estate tax. There are taxes around the admin and winding up of estates. There are benficiaries, who are at a remove. A tax on the value of the estate is fair. It also is one of those taxes, govt admin arrangements that come out in the distribtion of an estate.
For beneficiaries if you have never had it you shouldn't miss it……govt tax-wise. The same applies to the dead person…..the time to have taken advantage of any income/estate protection is well before death.
That looks like a basis for talking to the Greens Shanreagh.
I really think the country would sit up and take notice (in a positive manner) if Labour and the Greens surprised people with cooperation on this issue.
Yes I think there are good bits from both, though less keen on some of The Greens.
If a future of where the taxes might go could be painted it might be a go-er and less able to be made a choice between two left parties.
Good on you Shanreagh.
The Green limit of $4million is bracing when $4million is:
2 average houses in Queenstown, or
3 houses in Auckland, or
1 average dairy farm.
Anyway, if the publc argument is the threshold you're most of the way there already.
Not really about the threshholds or what things will buy or what things are valued at*- more about how, what and when these taxes come into play. I like the Labour one better for its nuanced approach. I also like taxes to come at logical and therefore less 'painful' waypoints etc sale and death.
* I know this is not what you are doing but I have always found that discussing the principle and how it could possibly work is better than putting a value on things. Once you start putting a value in then the politics of envy, 'greedy buggers' sort of arguments come in.
So that is why I am keen on estate taxes.
Of course it is natural to work hard, be rewarded and pass it down to your nearest and dearest. What I don't find natural is for the nearest and dearest to receive this dosh 'free, gratis and for nothing' as my Dad used to say without taxes being taken off.
But then I've just thought, some of this money accumulated will have already had tax paid on it and accumulated by dint of saving etc. Hmmmm
Yes and for small estates,we should not tax. There should be a reviewable sliding scale perhaps based on CoL increases that does not need any legislative time.
I know that The Treasury does not like the concept of tied taxes preferring that all money goes into the general pot and then is available to be allocated for the priorities of the Govt of the day, but I wonder if aspects such child dental health care, lithroscopy buses like the one in Southland DHB, agreed on as a consensus could be funded but still go into the general fund to do this.
Or being a bit radical we could have a choice for this tax to be applied to. We give people a choice about Kiwisaver schemes and a default.
We could give those taxed a choice about where to direct their tax and a default, that could be the general fund. The choices would have to be real Government agencies not Uncle Chris's bach fund or Wally's home brewing fund or Alison's fabric accumulation fund.
I need to be elected as a roaming/learning expert on this.
It says above that the Wealth Tax
"a 2.5% wealth tax on citizens with more than $2 million (individual) 0r $4 million (couple) in assets excluding the family home."
I thought the family home was included as part of the wealth tax. I was concerned that the $4m exemption is mostly fine until an aged partner passes away, Then the remaining retiree may be left with a mortgage free $2.5m – $3m family home, and possibly little in cash to pay a tax 2.5% of $500k or more.
This has been explained to you many times before. The GP policy includes deferment for asset rich, cash poor people until the property is sold.
Also to note, the $2 million threshold is for a single person, and the tax is on actual assets above that. To pay any tax at all, one would need a $2m mortgage free house.
Also worth reminding people, 'just by the operation of valuations' is why we have so much increasing poverty in NZ.
The only argument I've heard against people who've made money for nothing not being taxed like other income, is that some people don't like owing the government. Hard to see this as a good reason to delay reducing poverty in a meaningful way.
Yes the deferment. If this can be done why not build it as the policy. Why do we need to have these pay as you go arrangement/expectation? Why not caste it the other way…deferred unless a tax payer wants to pay as you go? I can see that some taxpayers might think PAYG might be a good bet if they want to leave a clean amount to beneficiaries. Let's not forget that that some of these 'terrible' so-called rich also keep the charitable sector going.
As I said I've got no problem with wealth/CGT call it what you will. Taxes that fall along the waypoints of life eg buying a house or death have a logic behind them that casting worry on many who may fall into the coverage of the Greens taxes do not.
What is the logic behind this paying as you go plus deferring ability? Will interest be charged on the deferred tax?
You say you have explained this…..perhaps you have and perhaps I find it unconvincing. Yet I don't find the Labour wealth policy to be unconvincing and it does not need constant explaining like The Greens.
The point of the tax is to get very wealthy people to pay income tax like wage earners, and to distribute that extra tax to the public good, like we do with other kinds of taxes.
Most people targeted by the wealth tax are very wealthy. The point of the tax is wealth distribution, so there is no point in allowing wealthy people who are avoiding paying income tax to defer.
The smaller number of people who would be on the edge of the tax catch (asset rich/cash poor), because of property price increases, need a way to not be unfairly penalised, hence the deferment.
Why should super wealthy people not pay tax as they go like everyone else?
Perhaps we need to stop so much of our wealth going off shore? Closing loopholes.
Perhaps we need a climate levy? To create a fund?
Deficits are a construct of a money system, just as pension funds are.
Parties who said they would create a fund designed to underpin rebuilding and replacing after a disaster would win.imo
People are shocked a Government threatens to "walk away" because "you are on your own"
That should underpin the reason to change Governments. "To work together rather than abandon'.
Yes I like these ideas.
Much better to "To work together rather than abandon', and allow for time and improvements to work through before we throw any scheme, homes or people away.
Governments have always done things they didn't campaign on after they've won the election (tax breaks to tobacco companies, anyone?).
So it's quite simple. Don't campaign on any major tax changes and keep denying there are any plans. Hell, even tell blatant lies, since all politicians lie anyway. Campaign on workers rights and tenancy rights to pull in potential voters. Then- assuming the left can form a government- go for the tax jugular.
Great post, great comments. The Greens had an online (wealth) tax calculator for the last election. National had an online tax relief calculator – oh what a relief, for the sorted!
https://www.greens.org.nz/taxcalculator
Maybe Labour/Greens/TPM could work together in good faith on a unified tax calculator for 2026. The tax revenue to attempt even a partial repair of the damage our CoC has done so far, and will continue to do, has to come from somewhere.
Not sure Aotearoa NZ society as I have benefitted from it can survive another 4+ years of tax relief for the sorted, although some believe there is no such thing as society, just the defence of division by wealth and private property rights – as Jesus intended.
https://www.stuff.co.nz/nz-news/360619026/david-seymour-says-jesus-would-have-been-act-supporter
We don't know how lucky we are – and were.
I'm going to put another perspective on the tax issue. The political right and frequently the center left of Labour often think of the govt deficit in terms of the size of the public sector. Even the most recent Labour government was projecting and planning a shrinking public sector to around 20% as a proportion of the economy in the long run. Though this is inexact it's not totally wrong, if you insist that the govt targets surplus in the long run you will be shrinking the public sector in that long run.
An effective public sector is also one of the best ways to target inequality as a lot of public sector programs meet needs across the whole population, rather than the population which can afford it. So as much as a wealth tax can be targeting inequality, so can a strengthening public sector which implementing may demand a sustained deficit spending period. The gradual effects of this are usually visible comparing Labour to National govt terms with these having either a shrinking or growing poverty statistics.
Of course, the optimistic planning around new taxation policies will be projecting collecting a lot and subsequently having a large public sector budget to put into public services. Note however it is the govt deficit which is determined to grow/shrink public sector provision, not just the overall size of govt revenue/expenditure. This has frequently lead to parties tying themselves in knots with fiscal responsibility rules, in particular UK Labour govt has done this and is implementing very damaging austerity as a result.
British Labour Government should ignore irrelevant fiscal ‘black holes’ and worry about the political hole it is digging for itself – William Mitchell – Modern Monetary Theory
Under no circumstances should the Taxation Cart be thus placed in front of the public sector deficit Horse by our left parties.
The next (and already the current) govt must be willing to run a deficit for the following reasons,
1) it wants to shift and make normal govt spending decisions being made in the countries interests (as opposed to being made in the interests of expediating a target future return to surplus date (examples, Health System spending policy, Pay equity policy).
2) with house prices diminishing in real terms the economy loses a part of GDP where spending was previously being put on credit on the house. This gives the economy a negative bias which can only be countered with a govt deficit and this factor could be potentially compounded by tax policy changes which have a broad impact. Making a govt surplus the primary goal at this point is exactly what National has done, it's become at any cost and is heading into a negative cycle where the cuts actually push out the return to surplus projections and the damage compounds (UK Labour is destroying themselves with this same dynamic).
Enough tax income for outstanding public services is what I want.
I'm no public sector size queen. But the last time Wellington flourished was in Ardern's first term when they were hosing public cash out the window.
Maybe it was by force of the pandemic but I do see the Ardern government as having been much more willing to go for a more healthy level of public spending without getting hung up on the tax policy changes supporting it.
Healthy levels of public spending are increased levels when we compare NZ to other similar economies. Most starkly for per-capita spends on public services, we are a cheap nation with a history of stingy spending.
How is that accounted? Because benefits are taxed, so essentially the government is paying itself that tax. Is that in the $2b?
$10,000 is what the dole used to be. There are models that can claw that back from the higher earners.
both parties put up and campaign on a policy of comprehensive CGT
FWIW National are desperate for Labour to share their policies.
The left should take heed
Hi MT. I might have missed some of this?
On rethink….I think I get where you are coming from . Sorry : )
Or they should write the narrative before it's written for them.
You won't win caring about National tactics.
Personally I like a financial transactions tax.
Its as simple as taxing all money that changes hands and captures a tax on any money that is sent overseas or into family trusts and vice versa.
Smaller transactions could be exempt.
Yes I like that too and I always keep forgetting to mention that…..I think a series of smaller taxes like sales tax on sales of property, estate tax and financial transcations tax is the way to go.
totally agree about a transaction tax, but not just on financial transactions, make it on all movements of money. it can be as little as 1% and amazing how much revenue it generates. then it could replace many other forms of taxation.
at present if your income tax rate is as much as 30% you can pay almost half your wages/salary in tax
Labour should have some tax policy, absolutely but it shouldn't release it till about a year from now, any policy released now will either be ignored or smeared for the next 16 months in a propaganda campaign.
the future of the healthcare system is going to be a much bigger issue than ever before, whoever can come up with an idea to fix it, fund it for the next few decades that makes it efficient and fast and actually work, has my vote.
In many countries party manifestos aren't released until a few days before the election.
Policies are great, they don't win elections though, most voters couldn't name a single policy Jacinda, John key, Helen Clark campaigned on, or internationally Albo, Starmer or Obama.
It's vibes, charisma, energy. It sucks but it really is the truth. People don't believe or care about a thing the politicians are saying it's how they say it and how they make voters feel.
Also in most countries and cases, the shorter an opposition leader is leading a party is often for the better, it gives the government less chance to frame a narrative against the new leader, and the public likes new energy.
Id raid a couple tax policies from the Greens and a couple tax from TOP and copy more of Australias tax settings.
I think Labour should do a sort of mou like in 2017 where they agree not to split the vote in key seats (I also think top consistently polling around 1-2.5% should get a seat deal but dreams are free)
Once you release policies you are no longer a blank canvas and you gotta defend and define them before the other side does, which the left sucks at doing.
I hope labour drops detailed policies they can defend in a few sentences, that are exciting but I'm voting on housing and healthcare next election
Regardless of the manifesto and the policies, the salesman has to go.
Chris hipkins couldn't sell water in the saraha, hes approved of more than Luxon but that's cos everyone hates Luxon, labour rising just a couple points despite this governments unpopularity is shocking.
People just don't vibe with Hipkins,his unlikablity is brought up in every conversation people who dislike this government have, in 23 he did worse than Cunliffe and Goff winning just 17 electorate seats.
people just shut off when the dude speaks, he's gotta go. Unfortunately a lot of the caucus does too.
I hope a lot of people retire at the end of this term of parliament and new blood is put in high list spots
Apart from Kieren I don't see a potential pm in the party, I wonder if labours next pm is even in parliament yet.
Agree Corey. A new Labour leader (McAnulty) would potentially bring in those extra 5-6% of voters that would swing the election.
Hipkins has already lost once when he might have won in 2023 if he had had sufficient policy bravery and charisma. He can remain as a solid cabinet member after the 2026 election.
Chris Hipkins will find it very hard to come back from his infamous overseas “Captains Calls”, will NZ Labour policy structures as outlined by Darien Fenton deliver? there seems an out from members views via committees or reviews attached to most of them. In the 80s the backbone club (ACT founders) drove out even Labour loyalists such as Jim Anderton and Chris Trotter, but it is 2025 now and hopefully some new gens are active in the party these days.
Hipkins did personally have a hard road in COVID–as did many of us–but he did not learn too much from the experience if he is not willing to go in a bold new direction on tax and workers rights. I do agree the opposition should not rush into announcing policy however to stymie the likely right wing onslaught that we saw over the likes of 3 Waters. The time would be well spent on developing the highest level of coordination with Greens and TPM.
Kieran McAnulty has a brain and expresses his articulacy in a non superior way from when I have heard him talk. Labour could do worse…